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Looking north: the re-emergence of the Arctic as a geopolitical hotspot

Looking north: the re-emergence of the Arctic as a geopolitical hotspot
02 Mar
2020
In the first of a two-part series, Angus Parker considers Russia’s new Arctic strategy and the implications for the rest of the northern world

With the eyes of the world concentrated on events in the Middle East, an announcement by Russia launching its latest Arctic strategy at the turn of the year evaded significant media attention. The Northern Sea Route Development Plan (Plan NSP), approved at the end of December by Russian prime minister Dmitry Medvedev, outlines a comprehensive vision of the ways in which the nation aims to benefit from the Arctic region, principally focussed upon the development of the Northern Sea Route.

This 15-year blueprint sets out 84 strategies which incorporate, among other proposals, the construction of 40 new Arctic vessels and eight nuclear icebreakers, the improvement of four regional airports, the development of infrastructure in the ‘high North’ including extensive rail networks and the completion of seaports such as the Murmansk Transport Hub. 

It is an ambitious, bold and extensive proposal. It is surprising that it has not received more international press coverage or attention from other Arctic states. That said, Arctic policies are not new. Russia adopted a comprehensive Arctic policy twelve years ago and the past decade has seen a proliferation of papers outlining national strategies from both Arctic and non-Arctic states. Nevertheless, this latest plan demonstrates that the Russian government views the next 15 years as crucial when it comes to gaining a geopolitical advantage in the region.

Russia’s latest plan is distinct in the way that it explicitly sets targets regarding infrastructure development. It clearly pursues the goal of making commercial shipping and resource extraction more viable. With sea ice retreating at 12.85 per cent per decade, today’s ice will soon become tomorrow’s water. Russia’s plan indicates the tip of a much larger geopolitical iceberg of policies and strategies to be released over the coming decade as this change continues.

Laying claim

The notion that the Arctic region could become a crucible for geopolitical tension is not without precedent. During the Cold War, it held a prominent place in the strategic plans of both the USA and USSR. This changed following Mikhail Gorbachev’s 1987 ‘Arctic Zone of Peace’ speech in Murmansk and ever since, the land has been characterised more by cooperation than conflict. There is now concern however about the sustainability of this stability. Over the past 30 years, the Arctic has warmed faster than any other region on Earth with September sea-ice cover reduced by more than 40 per cent since 1979. These biophysical changes have precipitated visions of the Arctic as a resource hinterland which could deliver economic and energy security. In recent decades, this has produced displays of nationalism, as well as investment in scientific-political initiatives by littoral Arctic states, with the aim of laying claim to maritime space.

In 2007 a Russian-supported scientific submersible planted a flag on the seabed of the North Pole. In response, the Geological Survey of Denmark and Greenland launched a Danish Continental Shelf Project to examine geological positioning of the contested Lomonosov Ridge. These endeavours are just two examples of Arctic coastal states looking to lay claim to maritime space and to do so with scientific backing. Where exactly a country’s continental shelf ends is significant due to provisions of the UN Convention on the Law of the Sea (UNCLOS). Sub-clauses within article 76 of UNCLOS provide ways through which Arctic states could extend their claims to the ocean, depending on the position and condition of their undersea land, but there are strict conditions as to what exactly counts. In order to launch a case to extend sovereign rights, a country needs accurate knowledge of the seabed – hence the escalation in scientific projects by Arctic coastal states.

Oil, gas, money

The reason for all this excitement comes down to resources. The United States Geological Survey estimates that the Arctic could harbour 90 billion barrels of oil, 1,669 trillion cubic feet of natural gas and 44 billion barrels of natural gas liquids. These are estimates only but the implication is clear – as sea ice melts, the Arctic could emerge as a new energy frontier, precipitating a contemporary ‘scramble’ for resources.

Russia’s Northern Sea Route development plan has been accompanied by another Arctic policy aimed at natural resource development with a series of tax incentives, including a tax rate of just five per cent on the first 15 years of oil production as well as a 50 per cent tax deduction on shelf exploration. These incentives are projected to produce approximately $230 billion of new investments in the Russian Arctic over the next five years.

Short cut

The equally noteworthy effect of melting sea ice is the emergence of trade routes through the North West Passage and the Northern Sea Route – both of which could have significant impacts on the dynamics and costs of global trade. These new shipping routes can cut shipping transport times by 40 per cent compared to previous routes via the Suez Canal, with distances between Asia and Europe reduced by up to 5,000 miles. Russia’s plan is principally aimed at utilising the opportunities this presents. Sensing the geopolitical tensions that remain around shipping chokepoints and channels including the Malacca Straits and the South China Sea, there are clear advantages to developing alternative shipping lanes such as the Northern Sea Route.

In 2019, 26 million tons of cargo passed along the Northern Sea Route but the NSP outlines ambitions to raise this to 90 million tons by 2030. Shipping companies working in the region will also be exempt from VAT on exported goods and the companies that construct seaports will benefit from financial exemptions, including zero per cent income tax for the first ten years.

Increasing nerves

Unlike during the Cold War, there are multiple actors now competing for influence in the region. A plethora of near-Arctic states have released Arctic-specific policies and the admittance of South Korea, China, India, Japan and Singapore as observer states to the Arctic Council in 2013 demonstrated that the Arctic has become a space of transnational concern. China has not only signed up to resource-related projects with both Russia and Greenland but also harbours ambitions to incorporate a ‘Polar Silk Road’ as part of its One Belt, One Road initiative.

Subsequently, the littoral states of the region have become anxious to assert their claims to sovereignty. In recent years, the construction of manned bases along the Russian Arctic coast, the development of nuclear ice breakers as well as a heightened naval presence, have aroused concerns and exacerbated existing tensions between Russia and other Arctic states, principally the USA.

In 2018, a report commissioned by the UK Government concluded that ‘the prospect of Russia projecting power from the High North has returned,’ and NATO responded by enlarging operations in the Arctic region.

Despite this, alarmist concerns of an imminent ‘scramble’ for resources are perhaps premature – all Arctic states are still ostensibly committed to upholding peace. Nevertheless, the ambiguous legal environment as regards territory, coupled with the frailty of existing governing institutions, presents risks for the stability of the Arctic region. A key question for the coming years is whether the Arctic Council – the current forum for cooperation – should be replaced or adapted to incorporate a legally binding treaty akin to that established for Antarctica in 1961.

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