May 1, 2008｜Russia
Regional Coordinator & Advisor for the CIS, Regional Strategy & Coordination Department, Mitsubishi Corporation
Reflecting the strong situation in recent Japan–Russia economic relations, there have been an extremely large number of reports raising Russian issues from a variety of angles. When I stop by a bookshop, there are no end of books on Russia, and it can be discerned that the interest in Russia of ordinary people is high.
Meanwhile, when I hold lectures and seminars on Russia, an unprecedentedly large number of people take part. Included among them are also many businesspeople investigating future business with Russia.
As the backdrop to this there is the fact that Japan–Russia trade has expanded rapidly.
According to the Russian customs clearance statistics for 2007, the total of imports and exports between Japan and Russia for the first time ever reached US$20 billion (US$21.2 billion in the Japanese customs clearance statistics). This was an increase of 64.1% on the previous year, and in terms of growth rate it ranked top. When one considers that in second place for growth rate was China at 40.5%, and in third Turkey at 32.1%, it can be seen than the Japanese growth rates have shot up. Further, in the ranking by country of external trade in Russia, Japan went from fifteenth in 2006 to eighth in 2007, and for Russia Japan has become an important partner. For the exports from Japan, automobiles were going strong as always, and increased 65% on the US$5.2 billion of the previous year to reach US$8.0 billion, and made up 75% of the Japanese exports. What is most attracting attention is that in Japanese imports crude oil has increased dramatically by a factor of 5.3 from US$0.7 billion in the previous year to US$3.7 billion, constituting 35.4% of the imports from Russia, and has taken the number one position, replacing non-ferrous metals. This illustrates that Sakhalin crude oil has steadily been establishing itself in the Japanese market.
The second factor for Japan and Russia having become important partners in Japan–Russia economic relations is probably that the project investment into Russia by Japanese firms has increased rapidly. Toyota Motor Corporation chose Saint Petersburg as a production hub within Russia, and while they promised a completion two years after holding the groundbreaking ceremony in June 2005, they subsequently announced its completion, despite myriad problems, in December 2007, continuing by declaring the construction of a second plant on adjacent land. President Putin praised highly the diligent Japanese and their entrepreneurial spirit.
For more than a decade Japanese investment has been over-cautious, and although Japan has been criticized for being behind neighboring countries such as China and the ROK, now such things have come not to be heard, and in the future Russia will eye the cooperation of Japanese firms as indispensible in getting innovative projects in manufacturing industry into full swing.
It is said that at the Japan–Russia summit which is planned for the occasion of the July Toyako summit, the realization of the “nitiative to strengthen the Japan–Russia cooperation in the Russian Far East and Eastern Siberia,” which Prime Minister Abe proposed at the same time as the summit last year, will be an issue for consideration. For Japan–Russia economic cooperation the stepping up toward a still higher level is anticipated.