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The Russian Arctic: The Logic and Paradoxes of Change

  • ECONOMIC POLICY
  • Published:
Studies on Russian Economic Development Aims and scope

Abstract—

Large-scale transformation processes in the territory of the Arctic zone of the Russian Federation (AZRF), which the authors identify as Arctic “redevelopment,” are analyzed. These processes combine the use of the huge “Soviet legacy” and the creation of principally new economic, social, and infrastructural facilities. It is proved that redevelopment is the main content of transformation processes in the entire Russian territory and that the AZRF can serve as their most adequate pattern at the level of the country, as well as its regions and municipalities. The genesis and essence of Arctic problems are shown to systemically depend on the realities of transformation processes under way in the entire country due to the policies and reforms of recent decades. It is substantiated that the success of Arctic redevelopment will decisively depend on the early revision of the basic provisions of the current nationwide industrial, energy, transport, demographic, ethnic, educational, and personnel policies. The concept of a macroregion as a target object of state control, formed to implement specific state interests, is used to prove the advisability of detaching the AZRF as an independent object of state policy. Paradoxes of the demographic situation in the AZRF are considered, and directions for organizing Arctic health care are justified in terms of (a) the specifics of urbanized and rural territories in the western and eastern (Transural) parts of the AZRF and (b) the specific needs for medical services among miners, metallurgists, military personnel, sailors, rotational employees, and representatives of indigenous ethnic minorities of the North. Specific interrelations between the state and large corporations in the Arctic, including those aimed at mitigating climate risks during development, are revealed, and the state regulations concerning greenhouse gas emissions, proposed by the Russian Ministry of Economic Development, are assessed critically in this respect. In conclusion, the consistency of recent changes in managing AZRF development by a special federal body for Arctic affairs is substantiated.

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Notes

  1. Small fragments of our papers are included in the text of the article without refence to the sources.

  2. Thus, some geographers still stress that the AZRF within its established borders is not the entire Arctic, whose boundaries should go further south. Several economists fear that AZRF will turn into a territory of interest for investors who will only take the cream off the Arctic natural resources. Moreover, the rationality of expenditures on Arctic infrastructure development is doubted in the conditions of the obvious insufficiency of funds to maintain it in the country’s densely populated regions. Pacifists, who still believe that “Russia has no enemies,” consider the revival of the Arctic defense belt provocative, and so on.

  3. Thus, in 2018, 7456 births and 8467 deaths were recorded in Murmansk oblast (the odds are –13.5%) with a birth-rate downward trend (as in most regions of the country). At the same time, the birth rate stably exceeds the death rate in several municipalities of the same oblast, e.g., in territories uncomfortable for living: Pechengsky district and four closed administrative-territorial units: Aleksandrovsk, Vidyaevo, Zaozersk, and Severomorsk (the latter resulting from the state policy of improving the living conditions in permanent deployment sites of the Northern Fleet).

  4. The Head of the Federal Service for Supervision over Consumer Rights Protection and Human Welfare, Professor A.Yu. Popova, Dr. Sci. (Med.), coined the most general definition of this position: “The Arctic is characterized by various cold-preconditioned pathologies; therefore, circulation, heart, respiratory, nervous, and digestive diseases run severely and unusually there; infectious and parasitic diseases, as well as hypovitaminoses, develop. The integrated and lasting effect of low air temperatures, low humidity, ever-changing wind patterns, frequent changes in atmospheric pressures, insufficient solar radiation, light patterns—all these overstrain protective human mechanisms and trigger diseases and premature death…. The state mechanisms of health care for the working population and occupational, infectious, and mass noncommunicable diseases.… in the extreme conditions of the North are inefficient” [17, p. 7].

  5. This is evidenced, for example, by the fact that the Boston Consulting Group (BCG) ranked Nornickel among the world’s top 10 in the industry in value creation for the shareholders, and Nornickel became the world’s leader in shareholder value growth. BCG makes annual ratings (by the 2017 results, 2425 companies were analyzed across the world), based on total shareholder returns over five years (2013 through 2017). This indicator is considered the ultimate performance indicator of shareholder value creation. Nornickel’s indicator was 8.2%, and the company allocated $2.09 bln on dividends in 2017.

  6. From 10 to 12 salaries plus relocation reimbursement. About ₽4 bln were allocated to social needs.

  7. Among Chukotka’s largest gold-mining companies are OAO Chukotka Mining and Geological Co. (owned by Canadian Kinross Gold), which develops the Kupol and Dvoinoe fields and which has been the leader in Chukotka’s gold mining in recent years; OOO Karal’veem Mine, a subsidiary of the Leviev Group within the Auramine Resources group of companies (Golden Projects Management Co.), which controls gold ore assets in Russia. Moreover, OOO Valunistyi Mine (owned by R. Abramovich’s Millhouse Group) and OOO Gold Ore Company Maiskoe (the only Russia-owned company of the above companies, the parent company of the Polymetal International PLC, incorporated on Jersey Island) develops one of Russia’s richest gold ore fields.

  8. In the first place, this relates to facilities on piled foundations using permafrost soils as the base. Back in 1992, warming damaged 10% of buildings in Noril’sk, 22% in Tiksi, 35% in Dudinka, 50% in Pevek and Amderm, and 80% in Vorkuta. In the last decade of the 20th century, compared to the previous one, the number of warming-damaged structures in Noril’sk increased by 40%.

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ACKNOWLEDGMENTS

The authors are grateful to their young colleagues at the RAS Institute of Economic Forecasting, N.E. Terent’ev, Cand Sci. (Econ.), and Yu.V. Zinchenko, for assistance in preparing the manuscript for publication.

Funding

This work was supported by the 2013–2020 Basic Research Program for State Academies. Focus Area 167. Topic “Government Control over Complex Development of Russia’s Arctic Macroregion.”

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Authors and Affiliations

  1. Federal Research Center Computer Science and Control, Russian Academy of Sciences, Moscow, Russia

    V. N. Leksin

  2. Institute of Economic Forecasting, Russian Academy of Sciences, Moscow, Russia

    B. N. Porfiriev

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  1. V. N. Leksin
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  2. B. N. Porfiriev
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Correspondence to B. N. Porfiriev.

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Translated by B. Alekseev

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Leksin, V.N., Porfiriev, B.N. The Russian Arctic: The Logic and Paradoxes of Change. Stud. Russ. Econ. Dev. 30, 594–605 (2019). https://doi.org/10.1134/S1075700719060108

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