Arctic Sessions of the St. Petersburg International Economic Forum (SPIEF-2024)

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The main event of the 27th St. Petersburg International Economic Forum was the plenary session, where the President of Russia V.V. Putin made a speech. In his speech and in answering numerous questions, the Head of state gave a deep analysis of the international situation, the development of the Russian economy, and highlighted problems, including those related to the resolution of the Ukrainian crisis. As for the Arctic, the President announced the formation of a commission in the State Council of the Russian Federation for the development of the Arctic regions of Russia and the Northern Sea Route (NSR). He noted, “The Northern Sea Route is becoming an indemand global artery. Last year, 36 million tons of cargo passed through it, and in the future, the traffic may exceed 150 million tons. For this purpose, we will continue to develop the infrastructure of the Northern Sea Route, build transport approaches to Arctic ports. A special role in this work is assigned to the leaders of our northern constituent entities of the Federation. In this re-

^∗ © Zhuravel V.P., 2024

Sever [Arctic and North], 2024, no. 57, pp. 254–266. DOI:

This work is licensed under a CC BY-SA License gard, we will form a commission within the State Council for the development of the Arctic regions and the Northern Sea Route.” 1

According to A.A. Kobyakov, Advisor to the President of the Russian Federation, Executive Secretary of the SPIEF Organizing Committee, 21.3 thousand delegates and guests from 139 countries, 3.5 thousand Russian and foreign companies took part in the forum events. Foreign delegations from 95 countries came to the forum, including 63 heads of diplomatic corps and 48 ministers. Over the four days, 982 agreements totaling 6.43 trillion rubles were signed at the forum, excluding agreements constituting a commercial secret 2. SPIEF-2024 was held under the slogan “The basis of multipolarity is the formation of new growth centers”.

The main results of the work of previous forums on Arctic issues were directly discussed in the journal “Arctic and North” in the articles by V.P. Zhuravel [1; 2] and D.S. Timoshenko [3]. It should be noted that in 2022–2023, Arctic issues were discussed at numerous events of the business program “Arctic: Territory of Dialogue”, organized by the Russian Ministry for the Development of the Far East and the Arctic. This was largely due to Russia’s chairmanship of the Arctic Council. In 2024, the Arctic theme was modestly represented at the Forum in terms of the number of events. Specifically, the issues of the Northern Sea Route and international problems of Arctic development were considered. This article is devoted to their analysis.

Northern Sea Route: expanding Arctic horizons

The Northern Sea Route has received special attention at all St. Petersburg International Economic Forums. On June 6, 2024, the session “Northern Sea Route: expanding Arctic horizons” focused on the medium- and long-term prospects of the Northern Sea Route and their impact on the development of Russian Arctic regions. Opening the session, its moderator Mikhail Bazhenov, partner and head of the infrastructure and project financing practice at Trust Technologies, invited the participants to assess the significance of the NSR as an international transport corridor alternative to the route through the Suez Canal.

The participants of the event were interested in the speech of the Advisor to the President of the Russian Federation, Special Representative of the President of the Russian Federation for International Cooperation in Transport I.E. Levitin, who outlined the need and principles for forming an international transport corridor on the basis of the NSR and strengthening its railway component. He expressed his opinion as follows: “The prospects for this transport corridor are very serious. The problem we have is that the only railway exits are in Murmansk, Arkhangelsk and Vladivostok. We need an exit to the Northern Sea Route somewhere in the Urals or Siberia. At least one or two [additional] railway exits to the Northern Sea Route, then it will be competitive.” 3 Justifying this thesis, he drew attention to the need to increase container transportation along this route. At the same time, he noted that “the volume between Asia and Europe is very significant, and the Trans-Siberian Railway, the Eastern Polygon will not be able to provide these volumes, going through South Africa is also unprofitable. Without the NSR, there will be no global logistics, in one form or another. Breakthrough technologies are expected from Russia in the development of this international transport corridor.” 4 This statement of the question is, in our opinion, fundamentally important, it implies, if not a change in the approach to the further development of the Northern Sea Route in the near future, then its significant adjustment due to the strengthening of the mainland of the Russian Federation in its interests.

The Russian Minister for the Development of the Far East and the Arctic A.O. Chekunkov noted that the active development of the Northern Sea Route is possible only with the integrated development of the Arctic regions of Russia. “The NSR will not happen without the residents of the Far North. This route is impossible without creating comfortable living and working conditions for all residents. There are 2.5 million people living in the Russian Arctic.” 5 He did not substantiate this statement, but he is referring to the idea recently put forward by the ministry to create 16 agglomerations in the Arctic Zone of the Russian Federation. In this direction, the ministry and the regions are carrying out significant organizational and analytical work to prepare master plans for key settlements. Some of them were initially presented during the SPIEF-2024. A.O. Chekunkov noted that the ministry is forming a register of the best domestic and world practices of work in the north in order to create an international standard. The minister’s statements about best practices attracted considerable interest from the forum participants, but then it became clear that this was a prospect in the ministry’s activities. Speaking about the growth of cargo traffic along the Northern Sea Route, he noted that the “36.2 million tons transported in 2023 is a record, which recently was still scary to think about, since in 2012 the cargo turnover was 1 million tons. In order to increase volumes, it is necessary to transport cargo within Russia along the NSR.” This task is partially solved by subsidized cabotage voyages. Until recently, the nuclear-powered lighter carrier Sevmorput was used for this purpose, but now other vessels are being engaged for these purposes on a competitive basis. In 2022, there were 8 ship calls, in 2023 — 16 ones, in 2024, according to A.O. Chekunov, 18 calls are planned. All this is being done in order to “roll out” the route, to show shippers that the NSR is not scary. It is predictable and, importantly, the same cost as the railway.” 6 As always, the minister’s speeches were full of figures, he noted that “in the next 11 years,

REVIEWS AND REPORTS

Valery P. Zhuravel. Arctic Sessions of the St. Petersburg International Economic Forum … transportation via the NSR will reach 1.8 billion tons of cargo with a total value of 111 trillion rubles. It will also generate 20 trillion rubles of tax revenues.” ⁷

Special Representative of the Rosatom State Corporation for Arctic Development V.A. Panov tried to justify the threats to global maritime logistics. These include piracy along the coast of Africa, the incident in the Suez Canal with the container ship Evergreen, the recent shallowing of the Panama Canal, the military conflict in the Red Sea, and the events in Ukraine. In his opinion, these are “black swans” that affect the directions of cargo flows and the formation of new trade ties. The Suez Canal reached a record in terms of transportation volume in the last reporting year, before the events in the Red Sea — 1.5 billion tons. A huge figure! But after the events in the Red Sea, cargo traffic has fallen by two-thirds. At the same time, shipping around Africa has grown by about 75%. The most expensive container cargo goes around Africa, and all LNG tankers, including Russian ones, have gone there. It is expensive, time-consuming, but safe. The loss of an expensive tanker can cost much more 8. According to V.A. Panov, sea transportation along the NSR today is limited to the period of summer-autumn ice-free navigation. For the transition to year-round transportations, it is necessary to build Arctic container ships of the Arc7 ice class 9. He noted that 10 icebreakers are currently operating, of which 7 are nuclear-powered, and another 5 nuclear-powered icebreakers are under construction. Four more non-nuclear icebreakers with a capacity of at least 40 megawatts are in the preparation stage for contracting. And we plan to order them this year 10. In his speech, he also noted that in 2024, record transit cargo traffic through the NSR is expected to reach 3 million tons, as well as another record for cargo traffic on the NSR. We are talking about 40 million tons. He named this figure later, on August 8, 2024, speaking at the plenary session of the “Arctic — Regions” forum, which was held in Arkhangelsk. In his speech at the forum, he announced the first meeting of the Russian-Chinese subcommittee on the development of the Northern Sea Route for October 2024. At the forum, the Russian and Chinese parties signed an agreement of intent to organize a year-round container line between Russia and China using the waters of the Northern Sea Route. It should be noted that in 2023, the Chinese company entered the Northern Sea Route for the first time and carried out 7 voyages between the ports of China and Russia; in 2024, it plans to carry out 12 voyages.

State Secretary Deputy Minister of Industry and Trade of the Russian Federation V.L. Yev-tukhov, in turn, noted that to realize the potential of the NSR, a large-tonnage ice-class fleet is needed, capable of ensuring year-round transportation of goods. According to the plans of the ministry, 14 icebreakers will operate on the NSR by 2035. The completion of the ultra-modern ice- breaker Lider at the Zvezda shipyard is scheduled for late 2029 — early 2030. A vessel of this class will be able to cope with the ice in the Laptev Sea, which even 60-megawatt icebreakers cannot handle. According to the ministry’s plans, 15 rescue vessels are planned to be built by 2026, and there will be 40 units in total [4, Aleksushin G.V.]. The Volga shipyard has begun building the first of 3 hydrographic vessels for the NSR. In his speech, he noted that the key task is to build domestic gas carriers for the transportation of liquefied natural gas, equipped with Russian and Chinese technologies. According to V.L. Yevtukhov, another challenge for Russian shipbuilders is the need to create their own low-speed engine with a capacity of more than 8 MW for large ships. He noted that such units are manufactured abroad at three plants: Vartsila, Man and under license in China, in Russia the Volgograd plant “Krasny Oktyabr” is ready to undertake this project. He informed that shipbuilders are working on the idea of developing the construction of large vessels on turbine units; the Russian Federation has such potential. He reported that until recently the shipyard was working in a technological partnership with colleagues from the Republic of Korea, who unilaterally, violating the terms, withdrew from the project.

Foreign participants spoke constructively. Sultan Ahmed Bin Sulayem, Chairman of the Board and CEO of DP World, a leading businessman of the United Arab Emirates, noted that there is no regular and high-quality service on the NSR yet, i.e. it is too early to talk about the Northern Sea Route as an alternative route, but, according to the speaker, there will be fewer of them when logistics hubs are built in Vladivostok and Murmansk. He noted that due to geopolitics, supply chains are changing, shippers are no longer looking at the cost of transport, they are now interested in delivery times or even the possibility of delivering cargo. Earlier in 2023, speaking at the SPIEF-2023 session “Northern Sea Route: new challenges”, he noted that over the past 60 years, no new routes have appeared, with the exception of the Northern Sea Route 11.

Ke Jin, CEO of China Freight Forwarding Company, was pleased to report that in 2023 his company completed the first eight container voyages from China to St. Petersburg, Kaliningrad and Arkhangelsk, particularly highlighting transportation between China and Russia via the port of Arkhangelsk, which reduces the transit time for cargo delivery during the navigation period. In his opinion, Arkhangelsk has an ideal (close) location to Moscow (only 1.1 thousand km) for the transshipment of imported goods from China [5, Zaikov K.S., Spiridonov A.A., Fadeev A.M.].

The Governor of the Murmansk Oblast A.V. Chibis noted that the Northern Sea Route is a powerful growth point for the Murmansk Oblast [6, Zhuravel V.P.]. He emphasized: “Murmansk is the base port of the NSR. Cargo turnover at the end of 2023 amounted to 58 million tons. An increase of almost 3% compared to the previous year. The Murmansk port is deep-water and ice-free, and is one of the five largest in Russia. We are working together with the Russian government and companies on the task set by Russian President V.V. Putin to increase the capacity of the

Murmansk port to 110 million tons per year.” 12 He also emphasized that “one of the key projects of the region is the Murmansk transport hub, which includes the construction of a port and almost 50 km of railway line. The port of Lavna is the first new port in the Murmansk Oblast since the Soviet Union times, which will operate on the western shore of the Kola Bay, where the new railway goes. This is 18 million tons; we plan that it will start operating this year.” 13 He was also pleased to tell the forum participants about the establishment of the Center for the Construction of Large-Tongue Marine Structures in the village of Belokamenka, which has no analogues in the world and is a key facility for the LNG equipment manufacturing industry being created in Russia. Currently, the construction of the first liquefaction line for the Arctic LNG 2 project has been successfully completed, and work to create the second line is underway. This project is being implemented by PAO NOVATEK.

The Governor of the Arkhangelsk Oblast A.V. Tsybulskiy, continuing the discussion, noted: “It is important that the coastal infrastructure, the most important part of the overall NSR system, is ready to perform new large-scale tasks.” He then listed the advantages of the Arkhangelsk transport hub: year-round navigation (with icebreaker assistance) with access to the World Ocean without crossing the territorial waters of other states; modern “digital port” system that makes it possible to obtain detailed data and process it in real time; readiness to double the volume of cargo transshipment; regular transport links with other regions — rail and road; expertise in shipbuilding and ship repair; full-fledged base for training personnel for the industry 14. It should be noted that in September 2023, the Comprehensive Plan for the Development of the Arkhangelsk Transport Hub until 2035 was approved 15. The plan provides for the development of the deepwater area, the expansion of shipping routes on the Dvina and Pechora rivers and water approaches to enterprises, railways and roads, the renovation and creation of new scientific centers and professional educational institutions. It also provides for the construction of a sea terminal for the shipment of lead-zinc concentrate on the Novaya Zemlya archipelago. The commissioning of the new terminal and the deep-water area of the Arkhangelsk seaport is scheduled for 2031. It is planned that the estimated capacity of the new terminal by 2040 will be 25 million tons per year.

The Governor of Chukotka V.G. Kuznetsov began his speech by noting that the Northern Sea Route is one of the most important elements of the economy of the Chukotka Autonomous

Okrug. More than 80% of all cargo is delivered via the NSR for the needs of the Okrug 16. He also emphasized that the regional government, together with the Rosatom State Corporation and the Ministry for the Development of the Russian Far East, is working to launch a single sea operator for northern delivery in 2025 17 as part of a pilot project based on the Chukotka Autonomous Okrug. At the forum, this proposal was enshrined in a tripartite agreement, the implementation of which should help improve cargo transportation to the Okrug. Chukotka was chosen because it is fully provided with northern delivery. Cargo can only be delivered there by air or by sea. It is better to do this by sea.

Director of the Department of Educational, Scientific and Technical Activities of the Russian Emergencies Ministry A.I. Bondar reported that on June 4, 2024, an Arctic-integrated emergency rescue center was opened in Russia’s northernmost city, Pevek (Chukotka Autonomous Okrug). He noted that for the first time, the Emergencies Ministry’s rescue unit, employees of the Federal Medical and Biological Agency, and the Federal State Budgetary Institution “Morspasluzhba” are jointly located, which significantly reduces the project’s funding and increases the efficiency and coherence of employees’ actions in emergency situations. The center will employ 50 specialists equipped with modern emergency rescue vehicles, all-terrain vehicles, airboats, and boats. In the future, the department plans to create similar centers in other settlements along the Northern Sea Route: Sabetta, Dikson, and Tiksi [7, Shenshin V.M., Nazarova I.S., Utkin N.I.].

Rector of Bauman Moscow State Technical University M.V. Gordin drew attention to the importance of training engineering personnel for the domestic industry and stimulating the motivation of young people to obtain an engineering profession. In this regard, it is important to reformat the main approaches to training personnel in order to meet modern challenges and achieve technological sovereignty, including in Arctic technologies. In this regard, a significant event was the signing of an agreement on scientific and educational cooperation with the Rector of the Far Eastern State Transport University V.V. Burovtsev.

The results of the session show that interest in the NSR is constantly growing. Unlike friendly countries, unfriendly states are trying to slow down the development of its infrastructure and limit its logistical capabilities. The western part of the Northern Sea Route is developing and being exploited better.

International problems of the Arctic

The next day, a session entitled “Arctic plan. International aspect” was held. Representatives of China, Japan, and Norway spoke at it. The Russian side was represented by officials from the Ministry for the Development of the Russian Far East, the Arkhangelsk Oblast, the Rosatom

In terms of content, it was a continuation of the discussion on the problems of the Northern Sea Route, the development and exploration of the Arctic, with an emphasis on some international problems of the Arctic [8, Marchenkov M.L.; 9, Palilov D.E.].

Chekunkov A.O., Minister of the Russian Federation for the Development of the Far East and the Arctic, noted the importance of the Arctic for the development of the world economy. The Arctic is “mineral resources — fertilizers, nickel, cobalt, platinum, copper; hydrocarbons — oil, gas; pulp and paper production and products of the forest industry complex, diamonds. And shipbuilding” 18, and also outlined the growth in the volume of transportation along the Northern Sea Route: “The dynamics of the NSR development are obvious to everyone: growth over 12 years is 36 times, from 1 million tons to 36 million tons. Plans already invested by companies to produce goods that will need to be exported along the NSR are 2 billion tons over the next 12 years. This is a whole layer of the economy, which is worth more than 100 trillion rubles in today’s prices, which alone should generate 20 trillion rubles in tax revenues in Russia.” 19 These figures are impressive but require significant efforts by the state, Arctic regions, commercial structures, financial resources and the direct work of northerners.

• V.A. Panov, special representative of the Rosatom state corporation for Arctic development, drew attention to the complex nature of the Arctic region’s development: “The Arctic will develop through an ecosystem that will consist of four balanced elements. The first is, of course, the mineral resource base. The second is energy, the third is logistics, or transport, and the fourth is international cooperation, because almost all of our projects in the Arctic are export-oriented in one way or another.” ²⁰ In our opinion, this formulation of the question is an attempt to justify the scientific nature of work in the Arctic, although in reality these processes are largely independent, and it is unclear what the “ecosystem” has to do with it. Although we agree with the expert that environmental issues are becoming increasingly important in the Arctic region.

A.V. Tsybulskiy, Governor of the Arkhangelsk Oblast, noted that all tasks related to the development of the Arctic and the NSR should be addressed at an accelerated pace 21. All speakers agreed with this idea.

M. Khomich, Chief Executive Officer, Chief Strategist of VEB.RF, Director of Special Projects of the Agency for Strategic Initiatives for the Promotion of New Projects, pointed out that the Russian Government has set very ambitious goals related to the development of the Arctic zone, and they cannot be achieved without international cooperation.

Fotin G.V., General Director of the mining company GDK Baimskaya, noted that the Baimskiy project will not only strengthen Russia’s position in the international market, but will also radically transform life in the eastern Arctic territories of the country. The company holds a license for metal mining within the Baimskaya area, which includes the Peschanka copper-porphyry ore deposit in the Chukotka Autonomous Okrug. Ore processing, copper and gold production will require significant amounts of electricity.

Director of the Arctic and Antarctic Research Institute A.S. Makarov dedicated his speech to discussing the global climate agenda and drew attention to the importance of scientific research in the region [9, Savinova V.A.].

Ms. Fan Yuxin, Chairman of the Chinese logistics company NewNew Shipping Line, pointed out that the development of the Arctic is the mission of the era. At the same time, she called the Northern Sea Route and the developed Arkhangelsk—Shanghai route “Arctic Express No. 1”. In her opinion, the Northern Sea Route creates welfare and prosperity for the whole world.

Hide Sakaguchi, President of the Ocean Policy Research Institute of Japan, Executive Director of the Sasakawa Peace Foundation, noted that the Arctic region has enormous economic potential due to its mineral resources, strategic location and tourism opportunities. According to her assessment, the Russian Arctic contains significant hydrogen reserves, and technologies for their use can have a considerable effect on the regional and global economy.

Mads Quist Frederiksen, Executive Director of the Arctic Economic Council (speaking online), said that Norway’s chairmanship of the Arctic Council is gaining momentum; its six working groups have resumed their activities, and the attitude towards Russia, which is a full member, has become friendlier. He noted that “we have global goals, and we are confident that cooperation will develop and intensify in the future.” Given the problems in the activities of the Arctic Council and Norway’s chairmanship, the Russian Federation needs to analyze the developing Arctic situation more deeply [11, Nevskaya N.A.].

Conclusion

For more than a quarter of a century, the Forum has become a global platform for establishing cooperation ties, an authoritative and representative world-class event that took place against the backdrop of a special operation in Ukraine, large-scale sanctions and the departure of a significant number of foreign companies from Russia.

The sessions contributed to a comprehensive understanding of the real situation in the Arctic, made it possible to develop specific steps and effective solutions to fulfill the tasks set by the Russian leadership to ensure balanced sustainable development of the Arctic region. The

REVIEWS AND REPORTS

Valery P. Zhuravel. Arctic Sessions of the St. Petersburg International Economic Forum … country’s leadership and the heads of the subjects of the Arctic Zone of the Russian Federation understand that this region is an important and promising territory of Russia. In the foreseeable future, according to experts, economic projects, including with Asian countries, will become the main ones. Unfortunately, it is increasingly rare to hear at forums about the problems that hinder the development of the Arctic. This is largely due to the fact that the same experts speak every year.

The dynamic development of the Northern Sea Route and its transformation into a yearround international transport corridor directly depends on both the growth of transit traffic and the development of Russian Arctic territories. Its development opens up serious economic and logistical prospects for the Arctic regions, and gives a powerful impetus to improving the quality of life and creating highly paid jobs in various fields. It was stated that in order to fully realize the potential of the NSR, it is necessary to have a year-round transport system.

The Arctic has enormous economic potential and is a key area for global development and economic integration. At the same time, restored international cooperation should play a significant role in the development of this territory. Under these conditions, the Northern Sea Route will open up new opportunities for international trade and export of Arctic resources.

Russian experts in their speeches avoided assessing the state and prospects of international cooperation in the Arctic, with the exception of V.L. Evtukhov, who noted that the Republic of Korea refused to sign an agreement on the construction of icebreakers and is not returning funds under the contract, and A.A. Makarov, who expressed hope for achieving breakthrough results in Arctic science based on restored international cooperation.

For some speakers of the Arctic sessions, participation in the SPIEF-2024 had its own working and personnel continuation. The Governor of the Murmansk Oblast A.V. Chibis was the first among the leaders of the Arctic regions to receive approval from the President of the Russian Federation V.V. Putin on August 6, 2024 for master plans for the development of the supporting settlements of the Murmansk Oblast 22, and was elected Governor of the Murmansk Oblast for the second time. On June 12, 2024, V.L. Evtukhov was appointed Head of the Presidential Administration for State Policy in the Sphere of the Defense Industrial Complex 23, and the Rector of Bauman Moscow State Technical University M.V. Gordin was included in the Council under the President of the Russian Federation for Science and Education on August 19, 2024 24. Now they have an additional opportunity to pay more attention to Arctic problems in their activities.

Unfortunately, at these two sessions, the forum participants did not recall the contribution of the recently deceased (June 1, 2024) Hero of the Soviet Union, Hero of the Russian Federation, State Duma deputy, special representative of the President of the Russian Federation for international cooperation in the Arctic and Antarctica, Artur Nikolaevich Chilingarov to the study and development of the polar regions.

The delegation of the Institute of Europe of the Russian Academy of Sciences, represented by its leading research fellows V.P. Zhuravel, N.A. Nevskaya and M.V. Vedernikov, took an active part in the work of the 27th St. Petersburg International Economic Forum. V.P. Zhuravel is the head of the Center for Arctic Studies, the author of more than 100 scientific papers on the problems of development of the Arctic; N.A. Nevskaya is the head of the Center for Macroeconomic Research, the author of more than 90 works, including the author’s textbook of federal significance “Macroeconomic Planning and Forecasting”, which has gone through three reprints; M.V. Vedernikov is the deputy editor-in-chief of the journal “Scientific and Analytical Bulletin of the Institute of Europe of the Russian Academy of Sciences”, the author of more than 90 scientific papers, and a native of the Arkhangelsk Oblast.

The organizer of the 27th St. Petersburg International Economic Forum was the Roscon-gress Foundation, a socially oriented non-financial development institution and a major organizer of all-Russian, international, congress, exhibition, business, public, youth, sporting and cultural events. It was created in accordance with the decision of the President of the Russian Federation in 2007 with the aim of promoting economic development and national interests of Russia within strengthening its image. Following the results of SPIEF-24, on July 22, 2024, the Head of state approved a special list (Pr-1381), consisting of 21 instructions. In instruction 6, the Roscongress Foundation is tasked with ensuring the analysis and summarization of the final materials of the forum by October 1, 2024. In this regard, the question naturally arises about how the agreements signed at previous forums are being implemented. Thus, following SPIEF-2022, 695 agreements were signed for a total of 5 trillion 670 billion rubles 25, while at SPIEF-2023, more than 900 agreements were signed for a total of 3 trillion 860 billion rubles 26. These are agreements, the amount of which is not a commercial secret.