The Northern Sea Route and Russian Economic Integration

Andrew Revkin, the DotEarth blogger over at the New York Times, posted a lengthy entry on September 4 about the Northern Sea Route, which is finally nearing completion. The two German heavy-lift ships navigating the route are being led by a Russian nuclear icebreaker and have Russian pilots on board to supervise the transit. There’s a link to this helpful map so you can chart the progress of the ships.

But do shipping companies really just need a little more ice to melt in order to ply the NSR, or are there other challenges?

Revkin quotes Lawrence Brigham, a retired sea captain and Arctic shipping expert, who observed that “it is Russian bureaucracy more than sea ice or icebergs that is impeding international use of the Arctic route along its coast, which has in theory been open to such transit since 1987.”

Thus, it is the labyrinthine bureaucracy, in combination with a lack of facilities, which together present the greatest obstacles to the commercialization of the NSR. Russia has been trying to update its ports, customs facilities, and marine checkpoints for a while now, but whether its bureaucracy can be streamlined is an entirely different question.

Caitlyn Antrym, the executive director of the Rule of Law Committee for the Oceans, commented on the blog entry that Russia’s commercialization of the NSR would facilitate the country’s integration into the global market.

However, it seems as of there are several contrary forces at work in Russia over whether or not the country should further globalize its economy. Joining the WTO has been a goal of Russia’s for sixteen years, following its first attempt to join the GATT in 1993. In 2000, President Vladimir Putin made Russian membership in the WTO one of his primary goals. But nearly ten years later, Russia still hasn’t acceded into the organization. The rise of the price of oil, whose sale is not governed by WTO rules, reduced the importance of membership for economic growth. And last year, Russia rescinded its single-country application in order to apply as a bloc with Belarus and Kazahkstan. This move will likely further complicate Russian membership in the WTO, but increase Russia’s economic and political ties with the former Soviet states, which was probably the intended goal. It appears then that achieving WTO membership and global economic integration are now second to strengthening ties with nearby neighbors.

So why would Russia want to open up its waters to international shipping?

The Northern Sea Route is a transportation corridor Russia which can develop on its own terms. It will not have to increase transparency or the rule of law in order for it to carry out its plans, unlike with the WTO. Russia has the upper hand here, and it can charge levies and board ships at will if they are travelling in Russian waters. So for Russia, developing the NSR wouldn’t entail harmonizing with global standards of marine transportation and turning itself into a hub for international trade, but rather the rest of the world submitting to Russian rules in the cold waters of the Arctic.