Moscow Seeks Foreign Investment in Kuriles

RESIDENTS of this remote island gathered on Sept. 3 under leaden skies to mark the anniversary of the Soviet ``liberation'' of the Southern Kuriles from Japan in the closing days of World War II. Medal-laden veterans and schoolchildren carrying flowers stood in front of a red stone monument as officials eulogized fallen Soviet soldiers.

For years, the Soviet authorities had sealed off these islands. Dispute over their sovereignty remains the single reason Japan and the Soviet Union have not signed a peace treaty in the 44 years since the end of the war and the major obstacle to the warming of what remain relatively chilly relations.

While observing their annual ritual, island officials are also eagerly seeking a return of the Japanese - and the vast trade and investment they could bring to this isolated area. The Soviets have recently opened the islands to foreign visitors, including to this tour by a group of Tokyo-based Western reporters.

``We want our islands to be developed,'' local official Leonid Stashkevich explains to the guests.

The rich lands of Japan are tantalizingly visible across the narrow channel which separates this island from the northern Japanese island of Hokkaido. Island residents avidly follow sumo wrestling and late-night ``sexy television'' on the six channels of Japanese television they receive.

The Japanese government, however, remains determined that its citizens not walk through the newly opened Soviet door. Japan claims the islands - Kunashir, Iturup, Shikotan, and the Habomai group - are historically its territory and were seized without justification in 1945.

The Japanese government insists that return of the islands is the price Moscow must pay for the Japanese investment it seeks to develop the vast resources of the Soviet Far East.

``What we are saying to Japanese business and even sometimes to Soviets,'' a Japanese government official says, ``is you can't have the economic side moving ahead and leaving the territorial question behind.''

Government pressure blocked a Hokkaido native's plan for a joint fishing venture and last week halted the visit of a Cabinet minister who planned to accompany Japanese visiting the graves of their relatives. According to the editor of a major Japanese daily, the government's heavy hand even blocked Japanese newsmen from joining the recent tour.

For Tokyo such contacts would be tantamount to recognizing Soviet sovereignty over the islands, which Japan refers to as its ``Northern Territories.''

The government only approves the visits of former Japanese residents to the graves of their relatives, which since last year, after a 19-year gap, the Soviets permit to take place without visas or passports.

Japanese government propaganda depicts the ``Northern Territories'' as an armed camp on its shores, emphasizing the presence of Soviet military forces on the islands. According to Japanese defense officials, about a division of Army troops are on the islands, along with 40 Soviet MIG-23 jets based on Iturup.

In allowing visitors onto these fog-shrouded isles, Moscow is clearly eager to dispel that image. The Soviets want visitors to see islands populated by hardy fishermen, now into a fourth generation of islanders, who are here in the Southern Kuriles to stay.

The Tokyo-based group arrived in a 48-seat propeller aircraft from nearby Sakhalin, the large island which is the capital of the entire region. After one failed attempt to penetrate the low clouds, the plane landed at an airport on a runway surfaced with corrugated metal sheets, surrounded by military radar sites.

A packed-earth road curves through forested hills down to a black sand shoreline and a gray sea. It leads into Yuzhno-Kurilsk (South Kuriles), a dreary town of 7,000, mostly fishermen and their families. The town acts as the main port and administrative center for Kunashir, Shikotan, and the uninhabited Habomai group.

The military is everpresent. Young troops wearing the badges of a tank unit sit in trucks by a wooden pier, waiting to be ferried to a freighter for transfer back to Sakhalin.

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