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Russia’s Arctic may work as economic growth engine, if population stays

January 15, 2015, 20:48 UTC+3 Alexandrova Lyudmila
© ITAR-TASS/Press Service of Geological Institute, Russian Academy of Sciences

MOSCOW, January 15. /TASS/. Russia’s Arctic regions have the richest natural resources and they may well serve as an economic growth engine during the crisis years. For this, though, the government must take care of the local population to ensure those who have to exist in rigorous climatic conditions for years can keep their homes warm at far more friendly costs than those charged elsewhere in Russia, and enjoy good transport infrastructures. Otherwise, the local people may just pack their bags and go. This is the gist of what was said at Thursday’s discussion Russia’s Government Policy for Arctic Development: New Priorities. The meeting was held on the sidelines of the 2015 Gaidar Economic forum, arranged for the by Russian Academy of the National Economy and Public Administration (RENAPA).

The Arctic theme has remained high on the agenda of Russia’s socio-economic development for the past few years. Firstly because the northern areas boast the richest natural resources and breathtaking infrastructural prospects (suffice it to recall the Northern Sea Route). The Arctic sea shelf contains 90% of nickel, cobalt and platinum group metals, 60% of copper, and practically all of Russia’s explored reserves of titanium, tin, and barite. Also, according to various estimates, the Arctic’s subsoil may prove to be a repository of 70% to 90% of Russian reserves of gold, diamonds, lead, bauxites, apatite and many other mineral resources.

In May last year Russian President Vladimir Putin signed a decree to determine the land territories of Russia’s Arctic zone, which now incorporates the Murmansk Region, the Nenets, Chukot and Yamal-Nenets autonomous districts, as well as the municipality of the urban district Vorkuta (the Komi Republic). Also, the Arctic zone has incorporated the urban district of Norilsk and some territories in the Arkhangelsk Region.

“The Arctic is not to be conquered. It is to be made a home,” the governor of the richest and most well-off Arctic areas — the Yamal-Nenets autonomous district, Dmitry Kobylkin, said. The district’s entire territory lies in the Arctic zone, and half of it, inside the Arctic Circle. The Yamal peninsula is exceptionally rich in natural resources — it provides up to 85% of Russia’s gas output and 12% of crude oil.

“We are now working on a very complex project — a 707-kilometer-long northern equivalent of the Trans-Siberian railway. We are building an automobile road between Nadym and Salekhard, Kobylkin said. A total of four trillion rubles has been invested in the infrastructure projects in Yamal over the past five years.

Kobylkin identified such priority tasks as preservation of the indigenous Arctic people’s traditional economic pursuits, a balance of the fuel and energy complex and the local population’s interests, and measures to maintain ecological security.

“In the North, just living an ordinary everyday life is quite an accomplishment, let alone doing a good job,” said the Murmansk Region’s Governor Marina Kovtun. After the shock therapy of the 1990s northern territories have gone “uncompetitive and unlivable” and an exodus of the population began. In the 1990s the Murmansk Region had a population of about one million. Now there are 770,000 residents left. “The North may get completely depopulated very soon, if it has no new ambitious challenges or new super-tasks of national scale,” Kovtun warned.

She pins the hope for saving the region on the production of hydrocarbons. Under the Arctic Zone Development Strategy most of Russia’s hydrocarbons are to be produced in the Arctic. “All major projects that we count on so much are related with that strategy. I am referring to the Murmansk transport hub, the Northern Sea Route and the Arctic shelf.”

It is the government’s duty to compensate for the higher costs of heating homes, instead of making local people pay the heating bills at the same high rates that are charged in the central and southern regions of Russia, said the governor of the Arkhangelsk Region, Igor Orlov. “We need government support. We will be unable to manage on our own,” he warned.

And the government of Chukotka, Roman Kopin, emphasized the problem of logistics and transport availability, which would also require government subsidies. As an example he recalled the prices of tomatoes and other fresh vegetables and fruit that could not but soar on the way to Chukotka, where the average air temperature is fourteen degrees below freezing and the population density, Russia’s lowest.

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