Kuriles row tarnishes Japan's world image: Boris Yeltsin's decision to cancel his visit comes at a bad time for the Japanese, writes Terry McCarthy from Tokyo

PRESIDENT Boris Yeltsin's abrupt cancellation of his planned visit to Tokyo at the end of this week shocked the Japanese government and has left both sides even more apart in their emotional stand-off. But while Russia is the immediate loser, in that it will continue to be denied Japanese aid, Japan also has suffered a serious setback in the realm of international diplomacy.

The reason for Mr Yeltsin calling off his trip is clear: Japan is demanding the return of the Kurile Islands, which Russia invaded at the end of the Second World War, before it will grant Moscow any substantial economic aid. Mr Yeltsin has come under intense pressure from conservative hardliners in Moscow to make no territorial concessions to Japan, and finally he decided to cancel his visit, rather than suffer the humiliation of returning to Moscow empty-handed, as his predecessor Mikhail Gorbachev was forced to do last year.

Japanese diplomats would like to pin all the blame on Russian intransigence, but it is clear that the lack of any sign of compromise from Tokyo in the past weeks contributed to backing Mr Yeltsin into a corner.

'Tokyo's insistence on playing hardball with an emerging Russian democracy, while far less palatable leadership waits in the shadows, is at best foolhardy, if not irresponsible,' said Paul Summerville, chief economist for Jardine Fleming in Tokyo.

Japan's partners in the developed world may not judge it so harshly - most are resigned to Tokyo's hardline stance. But the danger for Japan is that the dispute with Russia over four windswept islands in the Pacific may overshadow its attempts in other parts of the world to play a more responsible diplomatic role.

This year was to have seen the beginning of a new international image for Japan, as it struggles to free itself from war guilt in Asia and a world-wide view that it can only engage in chequebook diplomacy. After an acrimonious debate, it has finally decided to send troops to Cambodia to take part in United Nations peace-keeping operations next month, and Emperor Akihito is to make the first visit by a Japanese emperor to China, in an attempt to build bridges between Asia's two most powerful nations.

In the longer term, Japan is lobbying to become a permanent member of the UN Security Council, as well as a special observer to the Conference on Security and Co-operation in Europe (CSCE). Most embarrassingly, Tokyo is to host an international conference on providing aid to the former members of the Soviet Union in October.

So why jeopardise the diplomatic goodwill from all these other enterprises? The main reason is domestic politics. A large swath of the political establishment and the general population is still deeply hostile to Russia, and a compromise with Moscow would be bitterly resisted by conservative groups. Ultimately, Russian and Japanese intransigence look remarkably similar.

(Photograph omitted)