Georgia warns Japan Russia risky for trade

August 23, 2008

, TOKYO, August 23  – Georgia\’s ambassador to Japan warned it was risky to do business with Russia, as his government seeks foreign pressure on Moscow to pull troops from the former Soviet state.

Japan, the world\’s second largest economy, has in recent years stepped up investment in Russia, although the amount remains relatively small after years of rocky relations between Tokyo and Moscow.

"Russia is an important economic partner for a lot of countries. But it\’s also a very unstable partner," Ambassador Ivane Matchavariani told a news conference at the Foreign Correspondents\’ Club of Japan.

"If you look at what they are doing with a lot of foreign companies, I think it makes Japanese companies think twice whether they want to commit large-scale investment to Russia," he said.

The ambassador has been actively speaking to the press in Japan in a bid to drum up support for his country in the conflict. Russia sent troops into its pro-Western neighbour to respond to a Georgian offencive on August 7 seeking to reassert control over South Ossetia.

Japan has been critical of Russia\’s attacks on Georgian soil and last week summoned a senior Russian diplomat.

Russia has attracted growing investment from international firms trying to benefit from the expanding market, including leading Japanese automaker Toyota Motor Corp., which opened its first assembly plant there last year.

But Japan and other wealthy nations have been concerned about the business climate, particularly in the energy sector.

Two Japanese companies in 2006 sold about half their stakes in Russia\’s giant Sakhalin-2 gas project under pressure, and Russian President Dmitry Medvedev admitted in July that the state must stop "terrifying" businesses.

Tokyo has had turbulent relations with Moscow. Japan claims four Russian-controlled islands just off its northern coast that Soviet troops seized days after Tokyo surrendered in World War II.

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