Russia's Arctic Development
By Vlad M. Kaczynski
The author in Petropavlovsk-Kamchatskyi, Kamchatka, 2006.
Arctic development has become increasingly important to the Russian Federation in recent years. Off-shore oil and gas exploitation, shipping, fisheries, relations with indigenous populations, oceanographic research and the Law of the Sea have all become significant domestic and international issues since the collapse of the Soviet Union in 1991. Over the past two decades, the Kremlin has placed increased emphasis on Arctic development and its policy regarding the region is highly centralized. State policy has set the following priorities until at least 20201:
- International recognition of its rights to the continental shelf. The seabed areas extending past Russia’s Arctic maritime borders contain valuable natural resources.
- Sustainable use of natural reserves, taking into account environmental impacts, local population rights and national security concerns.
- Development of the Northern Sea Route.
- Creating a military force specifically to protect Russia’s Arctic borders.
- Developing infrastructure and a regional information/telecommunication system.
- Enhancing national security through further development of the Northern Fleet at its main base in Murmansk.
In its plans to develop the region, the Kremlin has cast aside the wellbeing and economic development of local Arctic populations. Inhabitants of the Far East suffer from limited health care and education services, decreasing life expectancies, increasing corruption, crime, and deteriorating infrastructure. At the same time, the government reaps most of the economic benefits of projects in the region, such as extracted energy and fish resources and revenues from investments and taxes. The Arctic region is one of the main engines of growth of the Russian economy. It contributes 11% to the Russian GDP through energy, minerals, timber and fish and newly discovered gas fields constitute up to 80 % of Russia’s reserves, crucial for the future of the Russian economy.2
Russian system of export gas lines including the Shtokman and Yamal fields in the Arctic.
The government’s heavy hand in Arctic affairs is nothing new in Russia. There have been a few elements of continuity in official strategic imperatives from Soviet times to the present. Current efforts to develop natural resources in the Arctic, secure access to waterways for the navy and merchant fleet, conduct research and expand the icebreaker fleet started under the Soviet Union. With respect to the Arctic, the Kremlin is involved in commercial activities such as the development of energy resources and exports. The Kremlin also exercises legal power to run its own business enterprises such as Gazprom, Sevmorneftegaz, Murmansk Shipping Company and Natural Resources Company and also to establish an enforcement system.
In contrast to Soviet times, the Russian Federation today invites foreign transnational corporations and attracts international investors to support new technologies and fund into newly discovered oil and gas fields, a transportation system and marketing activity. Whereas the Soviet Union prided itself on its technological and industrial capabilities, the new Russia concedes that it does not have the capability to exploit its Arctic resources on its own. Thus, the Kremlin prefers to sign servicing contracts with foreign off-shore oil and gas companies and aims to increase its acquisition of Western technology. Without foreign partnership, Russia would likely face serious financial challenges in developing off-shore resource fields, particularly during the kind of downturns to which its natural resource-based economy is prone.
Sea border dispute between Russia and Norway: The Svalbard Archipelago controversy and Grey Zone Agreement. Source: Churchill, 1992
Russia’s push to strengthen its presence in the Arctic is causing friction with some of its northern neighbors and other countries further afield. One strategically important dispute is the Svalbard Treaty controversy with Norway. This agreement, signed by Norway in 1920 and the USSR in 1935, gave Norway sovereignty over the Svalbard Archipelago in the Barents Sea, with other signatories given equal rights to engage in commercial activity there. The Svalbard Treaty does not grant Russia the right to maintain a military presence, but the Kremlin has economic and military interests in the whole Arctic Ocean, including the area around Svalbard.3 Recently, Norway refused to allow Russian security installations in the Svalbard Archipelago that would facilitate the passage of Russian navy ships from their port at Kola into the open Atlantic. In turn, the Kremlin has opposed Norway's attempt to establish a 200-mile Exclusive Economic Zone around its territories that would force states wanting to exploit Svalbard fish and offshore oil/gas resources to obtain Norway's permission. The Kremlin believes that Norway’s stance is aimed at driving Russia away from the archipelago entirely.4 Russia is aware that Norway is a member of NATO and believes Norway’s current management of Svalbard is paving the way for future NATO exploitation of the archipelago and control of the whole Arctic.5
A few countries not bordering the Arctic, including China, India, South Korea, Japan and members of the European Union have also taken issue with Russia over its development of the Arctic. These actors want to preserve the Arctic as the common heritage of mankind. They claim that the future of the Arctic should be a concern of all nations because the environmental health of our planet as a whole is dependent on the environmental health of the Arctic. However, Russian leaders have consistently rejected increasing pressure from these states to establish the Arctic as an internationally governed area. They are afraid international involvement in managing the Arctic would hamper their efforts to control their own part of the region, which would result in the loss of the freedoms they need to further exploit the region’s resources. The Kremlin is more concerned with immediate economic returns from investment in the region than with sustainability and a healthy environment. At present, there is a high degree of chemical contamination of rivers feeding into coastal zones, oil pollution in several seas and evidence of nuclear waste deposited in the Arctic seas.6
In response to these disputes, Russia plans to create a military force, including ground troops and a coast guard, to protect areas of the Arctic where it does have sovereignty. Furthermore, the Kremlin has intensified oceanographic research to justify claims to the bottom of the continental shelf in the Arctic Ocean. Areas such as Losomonov Ridge might contain important oil, gas and mineral resources that could be economically important to Russia in the near future.
The Northern Sea Route (Russia) vs. The Northwest Passage (Canada)- the two waterways in the Arctic that could be used for trade, research and transportation of natural resources and people.
Russia’s relations with other nations over Arctic policy are not characterized solely by disagreement. The Kremlin is currently seeking international partners to revive commercial navigation along the icy Northern Sea Route. The NSR stretches 5,000 kilometers, from Novaya Zemlya Island in the west to the Bering Strait in the east, joining the Atlantic and Pacific Oceans together. Its major attraction to foreign governments and shipping companies is the 34% reduction in distance between Rotterdam and Yokohama. The Kremlin’s major goals for the NSR are to secure shipping and naval transfers between the two oceans and to bring industrial development and human settlement to the far northern areas of Russia. To make the NSR commercially navigable, Russia has built an expensive large icebreaker fleet. By developing a sea transportation system along the Russian Arctic coasts, the Kremlin will be able to control international trade, collect substantial transit fees, increase revenues from icebreaker services for foreign vessels and attract investment in coastal infrastructures to secure necessary services for vessel traffic. The high cost nuclear ice-breakers that Russia has built are also serving another pecuniary purpose: generating tourist dollars by opening a navigable route to the North Pole.
Russia’s deeply conservative position on the Arctic owes itself to a combination of huge energy resource potential and the country’s limited access to warm southern seas. This situation explains why Russia feels obliged to counter the demands of actors from outside the Arctic region. Russia’s economy remains heavily dependent on its natural resources and the Arctic’s huge potential for resource exploitation means that the region will be important to the Kremlin for the foreseeable future. Most of the world’s more politically powerful countries have prioritized a healthy environment in their plans to collectively manage the Arctic, putting them at odds with the Kremlin over its push to commercially develop the region. While the Northern Sea Route presents an opportunity for multilateral cooperation, discord between Russia and other nations is more likely to characterize international relations in the Arctic over the coming years. As long as power is highly centralized with the Kremlin, it will continue to exploit the Arctic for short-term economic gain. In the meantime, the old ideological battle of the Cold War has given way to conflicts between Russia and new nations such as Norway, Japan, China, South Korea and India.
Vlad M. Kaczynski is Associate Professor at the School of Marine Affairs and Adjunct Associate Professor at the Jackson School of International Studies at UW. He is also Affiliate Professor at Nelson Mandela Metropolitan University in Port Elizabeth, Republic of South Africa. Professor Kaczynski has worked as a consultant and team leader for missions and analytical work sponsored by the World Bank, the United Nations, the Inter-American Development Bank, USAID, the US Department of Defense, and numerousprivate corporations from Korea, the US, Australia and Russia.
In 2009, the School of Marine Affairs researched Russian Arctic Development for the Korean Maritime Institute in Seoul. The aim of the research was to provide information to the South Korean government to help it shape its own Arctic policy. The paper addressed five major factors: environmental concerns, natural resources, sovereignty and border disputes, Arctic policy declaration, and shipping and icebreaking. The research determined three main reasons for the South Korean government to join the group of non-Arctic countries interested in shaping the future of the Arctic: protecting and preserving the Arctic’s natural environment, promoting the sustainable use of resources and enhancing multilateral governance of the region. All source citations are available in the master study.
