Japan, Russia appear to be making headway in island dispute

CEO Alexei Chekunkov's remarks suggest that joint Russo-Japan development in the area could be desirable in moving toward a resolution over the dispute.

MOSCOW -- Russia's Far East Development Fund will refrain from backing projects involving China and South Korea in the Kuril Islands, including disputed islets known in Japan as the Northern Territories, the fund's chief said.

"There are no investment projects [in which third countries would take part] in the Kuril Islands under consideration," Chekunkov told The Nikkei. "More importantly, we want to promote development on the islands with Japanese businesses."

In the past, Prime Minister Dmitry Medvedev and other high-ranking Russian officials have expressed an intention to welcome investment from China and South Korea in developing the Northern Territories. That raised the specter of Russia's effective control of the islets.

The dispute has strained relations between Japan and Russia since the end of World War II.

Now, however, Moscow is warming up to Japanese Prime Minister Shinzo Abe's stance that gives weight to stronger economic ties between the two countries. Russia has apparently altered its policy to give more consideration to Japan's position regarding the territorial matter.

As for those stronger economic ties, Chekunkov said the government-run fund has made a proposal to the Japan Aerospace Exploration Agency regarding Japanese companies' cooperation at Russia's new Vostochny Cosmodrome spaceport in the far-eastern Amur region.