Gorbachev Raises Hopes in Japan

ONLY 25 miles of water separate the two nations. But next week, when Mikhail Gorbachev becomes the first head of state from Moscow ever to visit Japan, he will be traveling across decades. Close as they are in geography, Japan and the Soviet Union are far apart in settling differences that linger from World War II and an antagonism that goes back even further.

Nearly a two-year buildup to the April 16-19 visit by Mr. Gorbachev has raised high expectations among the Japanese that he will be bringing a ``breakthrough'' on the dispute over four small islands occupied by the Soviets since 1945.

But don't expect much, warn Moscow officials who have visited Tokyo in recent months. Rather, the only breakthrough will be a willingness merely to talk about the islands issue.

``For a long time we refused to acknowledge that a problem existed,'' said Soviet Foreign Minister Alexander Bessmertnykh in Tokyo last month. ``We were like an ostrich with our head stuck in the sand.''

Island claims tangled

Japan refers to the four disputed islands as the Northern Territories, while Moscow considers them part of the Kuril chain. A tangle of legal and historical claims to the islands has led to the point where both sides acknowledge the need for a political solution.

When the trip was planned in 1989, Gorbachev looked more secure in his ability to strike deals, such as allowing East and West Germany to reunite in return for some $15 billion in aid from Bonn. But domestic turmoil and a revival of conservative voices in Moscow may have cost Japan its opportunity to strike a bargain with the weakened Soviet leader.

``The situation in the Soviet Union now is different to what it was in 1989,'' says Sovietologist Angela Stent of Georgetown University.

And Japan's big lure for a deal - Japanese investment - is fading as well. Until the early 1980s, many Japanese companies had their eyes on the vast untapped resources of Siberia for their heavy industries. But most have since moved on to high-technology and service businesses.

``Interest in Siberian resources has dropped drastically,'' says Kazuo Ogawa, deputy director of the Japan Association for Trade with the Soviet Union and East European Countries.

Soviet economic chaos is scaring off Japanese investors and any hopes of credit or loan guarantees from the government.

``We are extremely cautious,'' Finance Minister Ryutaro Hashimoto told parliament. ``Without a program of economic reforms in place, such money would not be effectively used.''

The last official credit from Japan was a $1 billion forestry project, granted in 1980 just before Soviet troops invaded Afghanistan. Trade between the two countries peaked in 1982, and then declined to $5.9 billion last year. Trade with the Soviet Union is only 1.1 percent of Japan's total trade, although Japan is the Soviet Union's third-largest trading partner (after Germany and Finland).

``Japanese corporations are not in a position to disregard government policy on the Northern Territories,'' says Mr. Ogawa. ``If a compromise could be found on the territorial issue, our trade with the Soviet Union could double.'' But even at that level, he says, total bilateral trade would would still be small in Japanese eyes.

Still, Japanese officials are preparing for an increase in economic aid, in case Gorbachev makes a partial offer on the islands.

A high Foreign Ministry official says there will be a ``some warming up'' in the economic area if the Soviet offer to return two islands.

``There would be an improvement, a step forward,'' he says.

Talks are under way, for instance, on a $1.2 billion forestry project in Siberia, which would export lumber to Japan.

And Japan is also considering whether to improve Siberia's rail system with 300 of its used train carriages.

In recent months, the Soviet government presented Japanese companies with a list of industrial projects that Moscow would like Japanese companies to join. Of the 13 projects presented, 11 were rejected without discussion. The Siberian forest project and a pulpmaking project on Sakhalin Island have been taken seriously enough perhaps to be finalized during the Gorbachev visit. Japan companies account for less than 2 percent by number and value of all foreign investment in the Soviet Union.

POW issue acknowledged

An encouraging sign for Japan has been Gorbachev's willingness to acknowledge and account for some 40,000 Japanese prisoners of war who died in Siberia during and after the war.

``We have to put a final period on this question,'' says the Foreign Ministry official.

Gorbachev may stop off at Khabarovsk in the Soviet Far East on his way to Japan to visit the graves of the former POWs. The gesture is expected to ease some of the long-held emotional resentment felt by many Japanese toward the Soviet Union.

Japanese officials worry that Gorbachev might use the visit to simply launch a ``charm offensive'' to soften Japanese opinion about the islands claim. One stopover for Gorbachev, for instance, is likely to be the Japanese city of Nagasaki, for the official reason of visiting 19th century Russian grave sites. But the stopover would also allow him to play up to a Japanese belief that they were unjust victims of atomic bombing by the United States.

But officials in Tokyo say that any tactic to divide the Japanese over the islands issue will fail and that Gorbachev must first acknowledge Japanese sovereignty over the islands before bilateral ties can improve.

Japanese officials are closely studying how West German officials delicately negotiated a ``land for money'' deal with the Soviets to obtain the former East Germany.