ABSTRACT
This chapter demonstrates why economic factors are not likely to cause Russia to relinquish control over the four islands. It interrogates the claim that economic incentives will eventually drive the Russian side into territorial concessions and that Japan must therefore resolutely maintain its uncompromising stance and await economic logic to take inevitable effect. The core of the economic case is the claim that Russia badly needs major inflows of foreign direct investment to revive its dilapidated economy. The arguments put forward by individuals such as Kimura Hiroshi and Hakamada Shigeki are based on an excessively optimistic view of Japan's contemporary economic position. Overall, the predominant Russian view of the economic situation is summarised by Vsevolod Ovchinnikov, a Russian journalist specialising in Asia. Further evidence that the Southern Kurils/Northern Territories dispute has become a steadily less important obstacle to Japanese economic dealings with Russia is the progressive growth in volumes of trade and investment between the two countries.
