Lose Some, Win Some

Boris Yeltsin would have liked nothing more than to return from his state visit to Tokyo with Japanese promises of aid for his country's wrecked economy. But the price of Japan's help proved too high for the Russian President, who abruptly canceled the long-planned trip just four days before he was to depart. The reason: months of tense negotiations failed to resolve a 47-year-old territorial dispute over a group of islands in the Kurile chain north of Japan.

Tokyo has long refused to join other industrialized democracies in providing direct economic aid to Russia until Moscow handed back sovereignty over the thinly populated islands, which the Soviet Union seized in the waning days of World War II. But Yeltsin had little bargaining room; nationalist opposition groups in Moscow threaten to call for the President's impeachment if he caves in to Japanese demands. Rather than return from Japan empty-handed, Yeltsin simply reneged. In Tokyo one newspaper blamed the cancellation on the Japanese government, saying it was the result of "poor diplomacy by third-class politicians."

While relations with one Asian nation faltered, Yeltsin was expanding ties with an old nemesis in the region -- Taiwan. In deference to Beijing, the former Soviet government had refused any contact with Taipei. But the risk of Beijing's wrath did not stop Russia and Taipei from announcing plans to establish unofficial relations, the same level of ties Taiwan maintains with many other countries. Yeltsin hopes for the result that he failed to achieve with Japan: increased investment in Russia. (See related story on page 43.)