Comparatively it was not ‘business as usual’ during the 26th annual St. Petersburg International Economic Forum (SPIEF) organized in St. Petersburg as attendence was at its lowest due to the sleeping changes between Russia and Ukraine, and between Russia and the United States and Europe. But one important session held here on ‘Prospects for the Development of the Northern Sea Route’ offered insights into steps being taken to explore and utilize natural resources by Russia.
First things first, it necessary to understand the mere mention of sustainable development of the Northern Sea Route. What this really means and what it entails as well as the future prospects. We have to understand that Arctic region has untapped resources. Then also to be reminded that Russia held the Chairmanship of the Arctic Council in 2021–2023. Some other foreign countries such Sweden, Norway Canada et cetera, are also connected to the Arctic region.
Special Representative for the Development of the Arctic at State Atomic Energy Corporation Rosatom Vladimir Panov, at the session, attempted to lay out the basic geography and part of its location to the audience and participants. “The Northern Sea Route is, first and foremost, a route to Asian markets, and a part of global logistics. It is 7000 miles from Murmansk to Shanghai, and 12,500 miles from Shanghai to Murmansk via Gibraltar and the Suez Canal,” he said.
And Russia’s partners are increasingly becoming aware of the importance of ensuring the safety, performance and sustainability of the Northern Sea Route. This is a new route for global logistics and a transport corridor of the future. But it also has its drawbacks – ice and the time it takes to navigate the route. Panov, however, explained that it is necessary to learn “how to maneuver through the ice safely and efficiently.”
According to Panov, experts are working with all shipping companies and have managed to improve the forecasting of ice conditions – all shipments are meticulously planned out and implemented with ice-breaking support. However, he stressed that the most important tasks right now are to provide the necessary cadres and commission new icebreakers.
First Deputy Minister of the Russian Federation for the Development of the Far East and the Arctic, Gadzhimagomed Guseynov, also noted during the discussion, that changes are taking place in the organization of global logistics, and that it would be impossible to have all freight between Asia and Europe travel through traditional logistics routes. He mentioned that 75% of Russia’s combustible gas reserves are located in the Arctic, and the Northern Sea Route is a transport artery that will allow goods to be exported from the territories of the Russian Far North.
“What we need is to create and develop the necessary infrastructure, including on the Arctic coast, which, along with the development of the territories of Siberia and the Russian Far East, will allow us to use shipping lanes on the Northern Sea Route. We are talking inland waterways, port infrastructure and fleet here. We have already placed an order for a large number of ships, which will undoubtedly have a positive impact on the industry. And our work continues,” Gadzhimagomed Guseynov noted.
Sakiko Hataya, a Research Fellow at the Sasakawa Peace Foundation’s Ocean Policy Research Institute, contributing to the discussion in the hall, emphasized the importance of developing the Northern Sea Route following the 2021 container ship accident in the Suez Canal, which rendered the route temporarily inaccessible for use.
“It will likely be possible to use the Northern Sea Route year-round, the technology is available. This is why more and more countries are considering this route as an alternative for shipping their goods. Hokkaido in Japan could serve as a traffic terminal. The Northern Sea Route represents an opportunity for diversification. An economic assessment of the route is needed, as are further research and new regulatory measures from the international community in order for the route to operate more stably,” Sakiko Hataya stated.
The Northern Sea Route is essential to Russia’s economy is one aspect that needed a bit clarification. Aide to the President of the Russian Federation; Secretary, State Council of the Russian Federation, Igor Levitin, says “the Northern Sea Route is an icy Trans-Siberian Railway. Despite our best efforts, the Transsib does have a limit, and that’s around 220 million tonnes.”
The development of the Northern Sea Route is a huge factor in the development of the Russian economy. This transport corridor needs to be used to connect territories and not only as a window for export, something especially important in these difficult times of external political, economic, and logistical pressure, according to Alexey Likhachev, Director General, State Atomic Energy Corporation ROSATOM.
The Northern Sea Route as an alternative to traditional maritime routes between Europe and Asia, Alexey Chekunkov, Minister of the Russian Federation for the Development of the Far East and the Arctic, explained that this corridor is extremely important to the world because of the current international situation.
“The traditional sea lanes between East Asia and Europe are becoming increasingly tense. In certain scenarios, the routes could experience dramatic disruptions. We are talking about huge amounts of cargo, supplying three billion people with imports, primarily food, and exporting all the goods produced in East and South Asia. That’s why the NSR is such an important alternative,” he underlined.
Development must take into account the harsh environment along the Northern Sea Route. Although the Northern Sea Route is short, the environment is not to be taken lightly. Many serious efforts are required to sail 5–6 times with greater intensity. The Russian government has taken two decisions that will make a great difference – that is to revive the Northern Sea Route Authority and centralize these functions and to adopt the Northern Sea Route Unified Development Strategy, according to Alexey Chekunkov, Minister of the Russian Federation for the Development of the Far East and the Arctic.
The session further paid some attention to training programme needed for SME development. So many competent people are needed for these projects to be implemented. Resolving the task by attracting personnel is no easy task. The main task is to educate and train people in the Arctic itself. In order to do this, serious investment in education is therefore needed. Far East subsidy programme has been extended to include the Arctic zone. These are the views of Andrey Chibis, Governor of Murmansk Region.
International transport regulations need to be worked, suggested Igor Levitin, Aide to the President of the Russian Federation; Secretary, State Council of the Russian Federation. “We have established rules for companies extracting minerals but not for international transit. We need to establish rules for ships under foreign jurisdiction transiting through the Northern Sea Route, and we need to do it quickly. If we hold up the flow, we will lose out on new opportunities,” warned Igor Levitin.
The state needs to assume some of the risk. It’s not easy doing business in the Arctic. It requires that the state assume some of the risk. And the state is taking some on – even in spite of a difficult budgetary situation, investment continues in infrastructure, communications systems and the construction of icebreakers.
Other participants in the discussion included Vice President for Federal and Regional Programs at Norilsk Nickel Andrey Grachev, Deputy Chairman of the NOVATEK Management Board Eduard Gudkov, Director of the Arctic and Antarctic Research Institute Alexander Makarov, Chairman of the Management Board and Chief Executive Officer of Sovcomflot Igor Tonkovidov, and General Director of GDK Baimskaya Georgy Fotin.
The “Northern Sea Route: Outcomes and Plans” session was held at the Ministry for the Development of the Russian Far East and Arctic’s “Arctic: Territory of Dialogue” stand, one of approximately 15 events on its business programme, some of which are included in the plan for Russia’s Chairmanship of the Arctic Council. Among these are the discussions “Protecting and Monitoring Arctic Biodiversity,” and “The Russian Arctic – Focal Point. Protected areas in the 21st Century,” and “Filmmaking in the Arctic: A Dialogue Between Nature and Technology.”