Summary of Working Paper No. 16-1995
III.02.1: The Northern Sea Route and Possible Regional Consequences
By Sverre Høifødt, Acta Consult as, Tromsø, Norway
The aim of this study (carried out by Vigdis Nygaard, FINNUT, Margrethe
Aanesen, NORUT Social Science Research and Sverre Høifødt, ACTA Consult) has been to
analyse the mutual dependece between the transport activity along the Northern
Sea Route (NSR) and the regional activity in the NSR hinterland. The region
that has been studied covers the western parts of the route, from the Taimyr
peninsula to the Norwegian Sea.
This is indeed a large region, extremely rich on natural resources, but
sparsely populated and partly without a widespread basic infrastructure like rails
and roads. The Russian isolation during the Soviet Union period tended to slow
down the internal economic progress, and left the Russian North with worn-out
industries and major environmental problems. However, with the Russian reentry to
the global economic system the northern region now appears as an important
future supplier of raw materials to the world markets.
The rich natural resources attract potentional investors from all over the
world. However, Russian authorities are still searching for optimal economic
policies in the north, including policies towards foreign investors. So far, this
has partly prevented foreign capital from being invested, and thereby postponed a
significant potential stimulus to regional economic growth.
During the past few years industrial activity and output in the Russian North
have in fact declined dramatically. Transport volumes are correspondingly
reduced. The reason for this development is of course complex, but may in general be
attached to the fundamental transition of the Russian economy and society.
However, according to our analysis, the future growth potential of this region is
quite significant. To release this potential, economic cooperation and
integration between the Russian and the Nordic part of the region should be stimulated.
In a future growth situation, transport will be a key factor. Huge areas,
scarcely developed infrastructure, and remote markets will call for new and
flexible transport systems. Both for transporting the products of the economic base
activities out to the world markets, and for bringing industrial equipment and
consumer goods into the region, efficient and reliable transport will be needed.
The relationship between supply of transport services and regional economic
development can be regarded as being of mutual dependence. On the one hand, the
existence of appropriate and efficient supply of transportation makes export
industries more competitive. On the other hand, competitive industries demand
advanced transportation, and will thereby form the basis for new transport
services. Our analyses shows that the latter correlation probably is the most relevant.
Today trains and ships are the main means of cargo transport in the region,
with respect to transport of cargo. However, the main transport routes head
South, producing limited NSR activity. To investigate how NSR activity might be
affected by regional development in the years to come, we have studied the four
most important base industries. These industries are:
On the basis of these industry analysis we discuss the consequences for the
transport directed towards the NSR. In a short to medium time perspective
exploration and production of oil and gas probably represent the most promising sector
with respect to new NSR activity. Moving north and offshore the companies face
new logistic challenges, making seaborne transportation a more competitive
alternative.
The NSR activity generated from forestry and timber processing has recently
declined, and there is reason to believe that the volumes will stay low for the
next few years. In mining, metal and mineral processing the situation is fairly
parallel. In the longer run, however, these sectors could contribute
significantly to the development of the NSR. The importance of the fishery sector to the
NSR has been limited in the past, and so it will remain in the future unless
the export of fish and fish based products along the NSR to the Far East is
developed. This issue is discussed in more detail in the 1995-program.
The research work carried out under Project III.02.1 is now prolonged under
Project III.02.3. In 1995 the work is concentrated to four selected issues:
A final report, encompassing analyses from all four topics dealt with under
Project III.02.3, will be finished by the end of this year.
Forestry and timber processing
Fishing and fish processing
Mining, metal and mineral processing
Oil and gas exploration
The transport of fish and fish products from Norway to Japan and the rest of
the Far East, and the competitiveness of the NSR as an alternative
transportation route. (Author: Margrethe Aanesen, NORUT Social Science Research)
The development of the oil and gas fields in the Russian autonomeous "okrugs"
Nenets and Yamal, and the possibilities of using the NSR both for bringing in
equipment and cargo related to the field development, and for transporting the
final products out to the markets. (Author: Vigdis Nygaard, FINNUT)
The use of the Russian rivers running north to the NSR, related to export of
timber and timber based products from the Russian inland. (Author: Sverre
Høifødt, ACTA Consult)
The transformation of the Russian economic system and consequences for the
Northern areas. (Author: Alexander Granberg, the Russian Academy of Sciences).