January 25, 2016 / 12:29 PM / 2 years ago

Russia invites Japan to fish around disputed islands

Russian Deputy Prime Minister and Presidential Envoy to Russia's far east Yuri Trutnev attends the annual meeting of the World Economic Forum (WEF) in Davos, Switzerland January 22, 2016.Ruben Sprich

DAVOS, Switzerland (Reuters) - Russia is inviting foreign partners to help it develop fisheries around Pacific islands where Moscow and Tokyo have rival territorial claims and says it will give Tokyo priority; but if it doesn't jump at the chance, other investors will.

President Vladimir Putin's special envoy for Russia's Far Eastern region Yuri Trutnev said the offer was part of a broader plan to develop a huge territory rich in resources but poorly developed and lacking infrastructure from roads and labor to communications. A farming project with China was also proposed.

Disputes over the islands known as the Kuriles in Russia and the Northern Territories in Japan have strained relations between the two countries since World War Two, when Soviet forces occupied four of them at the southern end of the chain.

Moscow has angered Tokyo in recent years by having state officials visit the islands, situated seven time zones from the Russian capital, and stepping up military activities there. Japan says the islands are part of its territory, lying at their southernmost reach less than 20 Km (12 miles) from Hokkaido.

"We want to develop the Kuriles at a brisk pace," Russian Deputy Prime Minister Trutnev told Reuters on the sidelines of the World Economic Forum in Davos.

"The conditions are ideal there for fishing and fish farming. So we are inviting Japanese companies, and are ready to give them priority in joint ventures ..."

"But if they turn it down - we will find others who are willing to work with us. And I know that it can be of great interest to other foreign investors," he said.

Japan has shown no interest in such offers in the past, eschewing any action that would imply Russian sovereignty.

Trutnev said Russia, the world's biggest country by territory with one of the world's longest coastlines, is responsible for only 2 percent of global fish farming and should boost this industry by several times.

FARMING WITH CHINA

Trutnev is overseeing some 80 new projects in the Far East as part of Putin's plan to develop the territory.

Inside Russia, a project that is making waves is a plan for a $10 billion agricultural joint venture with China, which would help farm new territories.

Many Russians disapprove of any encroachment by China, with its appetite for natural resources, on a Russian Far East rich in reserves from timber and water to gas and minerals. Some fear the territories could in the course of time be lost to Moscow's control.

Trutnev says he understands the project is facing some opposition in Russia: "But to live in harmony you need to cooperate. The lack of cooperation only leads to higher risks."

"We need to put together very concrete terms - how much land can be farmed, the quality of soil, what will be planted ..."

He said Chinese investors would be obliged to hire an 80 percent Russian workforce and many top managers should also be Russians.

China would benefit by boosting its food security while Russia would develop new territories and create new jobs. A recent steep rouble devaluation as a result of low oil prices has made many projects cheaper for foreign investors, Trutnev said.

"There is no other place on the planet with such a huge and sparsely populated territory ... China has significant water supply problems while we possess 37 percent of water resources of the Asia-Pacific region," he said.

Reporting by Dmitry Zhdannikov; editing by Ralph Boulton

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