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| The Russian Navy’s lone aircraft carrier, Admiral Flota Sovetskogo Soyuza Kuznetsov, is towed to a shipyard for maintenance and repair work in Murmansk, Russia on May 20, 2022. Murmansk, with 325,000 residents, is the largest city north of the Arctic Circle. |
Russia is a formidable Arctic power due to its fortunate location.The length of its coast along the Cold Sea is 22,600 kilometers, just about 60% of the world's Icy coast.Due to the harsh climate, the entire four million square kilometers of the Arctic are sparsely populated.Russia is home to the three largest cities in the Arctic:Norilsk (with 205,000 people), Vorkuta (with 85,000 people), and Murmansk (325,000 people).Tromso, a city in Norway with a population of 62,000, is the fourth largest city.The Russian Arctic is home to just 2.4 million people, of which 300,000 are members of 47 indigenous ethnic groups.The remaining individuals are migrants and their kin from Russia and the former Soviet Union's more southern regions.
Twenty years of slavery
People came to the Arctic territories in the 1930s to mine huge deposits of discovered nickel, copper, and gold.The Northern Sea Route, which connects the Atlantic and Pacific oceans when navigable in the summer and fall, was chosen by the Soviets as the shortest shipping lane between the northern European region of the Soviet Union and the Far East.
These regions saw the beginning of the widespread utilization of gulag labor.For instance, hundreds of thousands of prisoners contributed to the construction of the Norilsk Mining and Metallurgical Combine, which is now known as Nornickel. Many of these prisoners perished from diseases, malnutrition, and the harsh climate.Some of the worst conditions were endured by prisoners who mined gold in the Kolyma River region.
The gulags were destroyed after Soviet dictator Joseph Stalin's death in 1953.Higher wages and the chance to retire early enticed a voluntary workforce to work on the Arctic's development.Incentives like these are still used to lure workers to the Arctic today.
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| The eight Arctic nations are Canada, Denmark, Finland, Iceland, Norway, Sweden, Russia and the United States. |
a lot of gas and oil deposits
After large oil and gas fields were discovered in the Arctic, which served as the basis for Soviet and Russian exports, the next phase of Arctic exploration began.Despite the fact that less than 2% of Russia's 145 million inhabitants reside in the Arctic, the region accounts for almost 10% of the country's economic output.There was production of 80% of Russian combustible natural gas (including gas liquids) and 17% of its oil by 2020.
Over 85.1 trillion cubic meters of natural gas and 17.3 billion tons of oil can be found on the continental shelf.These resources are designated as a "strategic reserve for the development of the mineral resource base of the Russian Federation," according to the Strategy for the Development of the Arctic Zone of the Russian Federation and Ensuring National Security until 2035, which President Vladimir Putin approved in 2020.
There is no investment
The success of the Arctic economy is largely dependent on the construction of the Northern Sea Route.The following actions will be taken by the Russian government in order to accomplish this goal:
- From the Barents to the Chukchi, development of the infrastructure for seaports and shipping lanes in the northern seas.
- Creation of a naval operations headquarters on the entire water area of the Northern Sea Route.
- Using a digital platform made for paperless multimodal passenger and cargo transportation registration, the Northern Sea Route's transportation and logistics services are integrated.
- Construction of at least eight nuclear icebreakers for year-round navigation
Additionally, significant investments were anticipated for the expansion of the Arctic region's economy and, particularly, the extractive sector.
Economic development targets for the Arctic zone in Russia by 2030
The prospects for Russian Arctic development have been further complicated by the sanctions imposed on Russia following its invasion of Ukraine in February 2022.Russia's oil and gas purchases are gradually being blocked.Additionally, using the Northern Sea Route for international cargo transit is likely to be rejected by potential trading partners.The Russian Arctic's capacity to produce goods and services will be severely constrained by this possibility.
This is especially true for natural gas, whose export transportation and production have already begun to slow down.Russia's natural gas production decreased by nearly 7% in the first half of 2022 when compared to the same period in 2021.Russia produced slightly more than 39 billion cubic meters of gas in June, which was 23% less than in the same month a year earlier.
Additionally, oil production has begun to decrease, and the European oil embargo that will begin in December will only amplify this trend.At just under 11 million barrels per day, output fell for the first time since April, a decrease of 170,000 barrels per day.To $17.7 billion, revenues from Russian oil exports decreased by $1.2 billion in August.Even though exports increased by 220,000 barrels per day to 7.6 million barrels per day, that did not stop them.
Scenarios
It can be assumed that no new major economic projects will happen in the Russian Arctic or the rest of the country in the foreseeable future. In the absence of investment funds, there will be a gradual degradation of these territories. The only exception is the Norilsk Industrial District, where 44 percent of the world’s palladium and 22 percent of high-grade nickel are mined. Apparently, the Norilsk Nickel Corporation is not under European and American sanctions because of its global importance.
A decrease in economic activity in the Russian Arctic has benefits. The pressure on the fragile environment will subside, making it easier to clear this territory from the accumulated waste over the past decades.