BUS604: Innovation and Sustainability

The Russian Federation is pursuing a comprehensive grand strategy for the Arctic region, economically, politically, and militarily. With the widest northern border, covering more than 50 percent of the Arctic coastline and around 60 percent of Arctic land, Russia has the biggest exclusive economic zones and continental shelf claims. Natural geography gives Russia the largest slice of the Arctic pie in accordance with international law and custom. The Russians therefore have no incentive to make a fuss over minor boundary disputes. 

Where Russia may behave recklessly in other parts of the world, she is in fact very cautious in the Arctic region. When the 2007 flag-planting stunt beneath the North Pole caused uproar among other Arctic nations, the government quickly disowned the incident as a private act by an eccentric billionaire. Russia knows her interests are best secured through cooperation, even if at times there is a measure of double communication between international conciliation and outbursts of nationalist rhetoric for domestic consumption.

In 2008, the Russian government published an Arctic strategy that stresses the economic and strategic importance of the region, and the means to protect these interests.  The document elaborately asserts sovereign rights over territories and maritime claims in accordance with Russian and international law, and goes on to specify national interests of the Arctic zone as a strategic resource for Russia's wealth and global competitiveness. The Northern Sea Route is described in terms of "national integrated transport communications".  The document outlines a methodical strategy for control, detailing investment, formalization of boundaries and claims, and logistical development to consolidate the Arctic zone as a leading strategic resource base.

Military security is emphasized for the "protection of state borders"; it is a priority to "ensure favorable operating conditions in the Arctic zone of the Russian Federation, including maintaining the necessary combat capabilities of troops (forces) of the general purpose of the Armed Forces of the Russian Federation, other troops, military formations and bodies in the region". With the Siloviki (security services) firmly in control, the document notes the central role of the Federal Security Services (FSB) for protecting national interests. Unlike other countries, the Russian Coast Guard is a well-armed paramilitary force that is a part of the Federal Border Guard, which in turn is part of the FSB.

With dwindling output from Siberian oil and gas fields, President Putin has noted that "offshore fields, especially in the Arctic, are without any exaggeration our strategic reserve for the twenty-first century".  To develop these resources, Russia desperately needs new capital and technology. The Russians needed the maritime boundary agreement with Norway, because they intended to use it and share risk. In a three-week period after it was signed in April and May 2012, the Russian oil giant Rosneft signed deals with ExxonMobil, Eni, and Statoil.  

After the invasion of Iraq, the US sought alternatives to the Gulf and started importing oil from Russia. After several hundred tanker shipments a year, this demand has diminished significantly with American discoveries of oil in their own seas and West Africa, and the breakthrough of the shale gas revolution. The US is now exporting its gas to Europe, which has shocked Gazprom. In response, Russia updated its 2010 Energy Strategy of Russia for the period up to 2030 in November 2012, with an emphasis on exports to Asian markets.

Russia needs access to new markets for its oil and gas, and is looking to build the infrastructure on its northern shore for transit shipping and for energy exports that can equally move east and west. To manage a broad spectrum of economic activity, the Russians are investing more than any other state to develop northern infrastructure. Dutch firms are dredging harbor areas and cutting a deep channel in the Kara Strait to make room for oil tanker traffic. New nuclear icebreakers are being built, search-and-rescue stations are being installed across the northern seabed, and polar orbiting satellites have been launched. There were never satellites over the Arctic during the Cold War, and all these investments are part of the preparation to exercise control over a strategic hub for transit, energy, and exports.

For Russia's military strategy, the Far North has been a function of five different factors since the Cold War: it is the home port of the advanced Northern Fleet; it is a transit area for Russian strategic bombers, and the only way to fly out from Russia and into the Western hemisphere; it is an important test area for new air and sea-launched weapons; it is the home port and base of the Russian nuclear retaliation capability; and finally, it is the most important air defence area for northern Russia, representing both the trajectory for strategic bombing and intercontinental missiles.  Today, new investments are being made to expand naval and aerial military capabilities, but these are not a reflection of a new militarisation of the region. Russian military activity in the Far North today is only a shadow of what it was during the Cold War. Rather, current and planned military activities are part of the securitisation of economic activity.

Despite its behavior domestically and elsewhere in the world, Russia understands very well that its interests in the Arctic can only be secured within international norms and in cooperation with other states to attract foreign investors. Russia has a comprehensive and far-sighted security strategy in the Arctic in preparation for natural, strategic, and economic breakthroughs.