VLADIVOSTOK, Russia -- Russian President Vladimir Putin says private businesses, including Japanese firms, operating on the disputed Kurile Islands will receive tax breaks in an effort to boost the local economy.

Speaking at the Eastern Economic Forum in the Far Eastern city of Vladivostok on September 3, Putin said private companies registered and physically present on the Kurile Islands will receive income and property tax breaks for 10 years.

"We have to create competitive conditions for our [Japanese] partners. It means the existing parameters of the tax burden, loan prices, the speed and quality of the state services for businesses here must be globally competitive," Putin said.

The sparsely populated islands have suffered economically since the collapse of the Soviet Union in 1991 as investment dropped and people left for better living standards on mainland Russia.

The Soviet Union seized the Kurile islands in the final days of World War II from Japan, which continues to assert territorial rights to the islands that it calls the Northern Territories. The dispute has kept Russia and Japan from signing a peace treaty formally ending the war.

Decades of diplomatic efforts to negotiate a settlement have failed to produce a solution to the issue.

"We think that the absence of the [peace treaty formally ending the World War II) in our bilateral relations is nonsense.... We have never refused from the dialogue on the peace treaty.... However, we must consider the realities, one of which is the necessity to secure a peaceful future and therefore to guarantee that there will be no U.S. armed forces, especially missile-assault systems near our borders," Putin said at the forum, adding that Moscow is awaiting Tokyo's response on that.

The three-day Eastern Economic Forum started in Vladivostok on September 2.

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Putin Says Private Businesses, Japanese Firms On Disputed Kurile Islands To Receive Tax Breaks - Radio Free Europe / Radio Liberty