When Russia assumed the two-year rotating chair of the Arctic Council, it also took over chairing the Arctic Economic Council, a parallel but independent organization that seeks to promote business opportunities, trade and investment in the region.
Those familiar with the Russian chairmanship suggest the importance that Moscow places on development of the region mean it can be expected to make greater use of the council to promote its interests than previous chairs have done.
The economic development of the Russian Arctic is a key issue for the Kremlin. Russian activities there, primarily in the form of gas production, account for some 20 percent of the country’s exports and 10 percent of its total economic activity.
With gas production expected to expand in the coming decades, and with shipping volumes on the Northern Sea Route (the shipping route that passes along the country’s northern coast) set to increase, President Vladimir Putin has said that “Russia will grow with the Arctic and northern territories.”
A wide range of foreign firms are already involved in development of the Russian Arctic. But further investment will be necessary for it and the rest of the region to live up to their potential, according to Evgeniy Ambrosov, an executive with gas producer Novatek who will head the council during the Russian chairmanship.
The Arctic Economic Council, especially under Russian leadership, could help drive some of the investment, Russian officials hope.
“We see the Arctic Economic Council being a center for the Arctic cooperation between operators, business communities and economic development institutes. It will give impetus to the development of small and medium-sized enterprises and Indigenous communities,” said Nikolay Korchunov, a Russian diplomat who will head the Arctic Council’s group of senior Arctic officials during the Russian chairmanship.
Among other priorities, the country hopes its time helming the group will lead to the adoption of marine transport technologies that will determine the direction of development of shipping in the region for the next three decades.
“This is something that involves many stakeholders, not just Russian stakeholders,” said Ambrosov. “When it comes to navigation, this is where we need the greatest degree of coordination and adoption of cutting-edge shipbuilding technologies. Involvement here is a priority for us.”
Russian officials admit that the need for increased shipping will, to a large degree, be driven by growth in mining and oil and gas exploration, but Korchunov reckons that the two councils can also work together to identify sustainable development opportunities.
“It is crucial to understand the importance of the ecological efficiency of the economic activities. Ecological capital will be one of the most important advantages in the future competition and development of the global economy,” Korchunov said.
The other goals of the Russian chairmanship include promoting sustainable development, formulating business development principles together with the region’s Indigenous groups and improving telecommunications infrastructure.
Watch a discussion of Russia’s Arctic Economic Council Chairmanship during the St. Petersburg International Economic Forum on June 3.
Below: Sergey Lavrov, the Russian foreign minister, makes a statement in supporting of closer relations between the Arctic Council and Arctic Economic Council.