The Northern Sea Route: the potential of expectations and the real functioning problems

Actualization of national and international interest in the Northern Sea Route exists due to geopolitical processes (constant tendency to divide the Arctic) and the development needs of the Arctic zone of the Russian Federation and all of Russia. External impulse was given by the appeal of the Soviet President Mikhail Gorbachev (Murmansk, 1987), who spoke about the international cooperation in the Arctic, opening of international shipping along the NSR. Exploration and economic development of large hydrocarbon deposits in the Arctic, “warmed” the commercial interests of the development of the International North Sea Route Program (INSROP, 1993), exacerbated the need for establishment of the management mechanism of the route, support the decision making on the key issues related to the NSR and dialog between different countries, ship owners and international institutions.

Now every region of the Russian Federation with a facade which rests on the Arctic ice field seeks to put itself as the subject of the “Fundamentals of Russian state policy in the Arctic up to 2020” (2008) and “Strategy of development of the Arctic zone of the Russian Federation and the national security for the period till 2020” (2013) 1. The ideological underlying reason of such a public declaration of intent is the eighth paragraph of the Strategy that states to think through binding measures for an integrated approach to social and economic development of the Arctic region and for international cooperation.

And, of course, centers of regional policy cannot exist without an accent on the issue of identification of the area and discussions on the role of the Northern Sea Route with its length of 5 600 km for the corresponding Arctic territory. The objective interdependence and interrelation of internal and external aspects of the NSR political and economic status leads the author’s scientific analysis towards defining the degree of Russian Arctic regional centers involvement in the implementation of the development and management strategies of the NSR — a maritime route from the Kara Strait to the Providence Bay.

The subsequent isolation of the nature and forms of regional positioning on the territory within the geographical coordinates of the NSR takes into account: a) the existence of the NSR Administration and its headquarters in Moscow and the initiative to move it to Archangelsk 2, area of the NSR waters limited by the 12 miles of territorial waters and 200 miles of exclusive economic zone with the possibility of free shipping, including foreign vessels; b) potentially necessary modernization of the NSR, and all the surrounding infra-structure to ensure the maritime industry.

Consequently, it is fundamentally important to be informed about the change of socioeconomic parameters of the Arctic regions for the regions themselves. Differentiation of the interval (5—60 years) for the creation and reproduction of the positive factors of economic activity [1,332] — is an important institutional condition for the perception of the NSR as a national transport communication and a key factor in the dynamic economic recovery of each of the Arctic regions. These regions of the Russian Federation are recog-nized as a strategic reserve of the country. They will be used effectively if the region acquires a rational use of technology to open the gates to the Arctic.

Theoretical allocation of circumstances impeding a realistic look at the solution of this problem is the subject of the author's attention to the complex technical and economic conditions and the nuances of political economy of the NSR in the long-term perspective.

Arkhangelsk and Murmansk — what town is the main gate to the Arctic?

Two clauses are important for the answer to this question. First, present and future involvement in the Arctic towns (ports) to the NSR activities is projected by prior history of their economic specialization and the possibility of its continuity in market conditions. Se-cond, the macroeconomic role of the individual components of the Arctic route are not determined by regional and municipal officials, but it is determined by the presence of strategic investment programs (federal, regional and corporate) aimed at modernization of existing facilities to make those towns a base for the economic development of the Russian Arctic. And, naturally, we are impressed by the desire of the Arkhangelsk Region to play an important role in the development of the Arctic and cooperation with neighboring regions and international community [2]. Such a desire is based on the historical advantages of the region, supported by the presence of the Arkhangelsk sea port and existing infrastructure there.

In this context, let us have a look at the Arkhangelsk and Murmansk — two seaports with very different geographical conditions and the dynamics of historical and economic destiny. We are going to associate political expectations of regional elites on two criteria: self-identity of the regional centers and the involvement of communities in the organization of the NSR, the economic development of the Arctic. Murmansk and Arkhangelsk are reflecting their previous history and currently are declaring themselves the outposts of the Russian naval power [3].

Both towns have a right to such self-determination, as well as calling themselves “the gateway to the Arctic”. Nevertheless it is possible to feel the rise of new Arctic political stars. At the European Far North it is the Nenets Autonomous District (NAD), which is a part of Arkhangelsk Region. The NAD is seeing itself not only a supporting outpost, but the most important link in the infrastructure development of the Arctic, a key region of the country for economic activities in the Arctic. A tug of war between the regional centers of the Russian Federation in the Arctic reveals with an interesting palette of self-assessments and opportunities.

Historically Arkhangelsk was a very important center of maritime traffic, even in the European part of Russia. It is the birthplace of the domestic shipbuilding industry and the Navy, base of the Northern Shipping Company [4] that owns 34 vessels and 18 vessels of the transport fleet. Its universal dry-cargo vessels with a tonnage of 2.500—14.000 tons transport many kinds of dry cargo, including radioactive and dangerous ones. The company retains the status of yearround carrier's to the port of Arkhangelsk, ports of Scandinavia and the Gulf of Finland and is actively using the NSR. JSC “NSC” traditionally provides marine transportation by the Arctic iceclass vessels A1 and intensified ice-class vessels for shipping in bad weather and technical conditions. For several years the NSC’s vessels have been delivering coated pipes to the “MRTS-Defender” in Baidaratsky Bay of the Kara Sea, contributing to the arrangement of the main gas pipeline “Bovanenkovo-Ukhta” (the "Yamal" project of the “Gazprom” company).

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In 2011—2014, the NSC increased the transportation of goods along the Northern Sea Route. Let us remind some of the cases. It was the delivery of a bulky cargo with a weight of 407 tons — manifold for the project “Sakhalin-3” from Norway to Sakhalin by m/v “Pioneer of Moldavia”. In 2012, the m/v “Johann Mahmastal” delivered cargoes for the mining companies in the Anabar in Yakutia, and ships “Pavel Korchagin” and “Ivan Ryabov” carried the first cargo of the arctic scrap metal from the Franz Josef Land. This year the NSC ships started to carry goods to the port of Sabetta. Annually tow icebreaker “Nord” makes towing of various marine objects from Arkhangelsk to Svalbard. In 2013, the ship “Engineer Trubin” was a member of the experimental expedition Tyumen — Sabetta — China — New Port. It was a historic first voyage from the new port of Sabetta (Yamal). In 2014 volume of cabotage grew up three times of the level of 2013. For JSC “NSC” it meant the involvement in the supply chain for a large infrastructure in the Arctic established for the Ministry of Defense of Russia (ships “Johann Mahmastal” and “Ingener Veshnyakov”). For the first time in the history of the NSC helicopters were tested for unloading the ship "Ingener Trubin”.

In other words, Arkhangelsk is not losing its position and seeks to meet the challen-ges of economic development of the Arctic. It is the leitmotif of the arguments presented by the Arkhangelsk regional administration for the State Commission on the Development of the Arctic in

April 2015. Nevertheless the brand of Arkhangelsk as a “gateway to the Arctic” should not lead to a leveling of other ports along the Northern Sea Route. In Russia there are four marine shipping companies with their corporate activities in the Arctic. These activities include no less than 70 major ports and settlements, like the largest ports of Dickson, Dudin-ka, Tiksi, Pevek and Provideniya. Attempts to belittle the importance of Murmansk as a new outpost are absolutely groundless. OJSC “Murmansk sea trading port” (MSCO) has 20 berths with a total length of 3460 meters3, with turnover of 17.13 mln tons (2013). Here, too, favorable engineering preconditions for integration into the scheme of the Arctic logistics exist. Hydrology of berths gives the Murmansk port an opportunity to accommodate vessels longer than 265 m with a draft up to 15.5 m.

It is not a secret that the relevant regional institutions generate political rhetoric on the strengthening of the strategic status of the regional centers with seaports related to the implementation of geo-economic objectives of the federal arctic policy. It is a sign of excitement among foreign investors and carriers of general cargo and other long-term commercial interest. The measures taken to widen the transport services and intensify the use of the NSR are of interest of all northern areas.

All the options of integration of the regional ports in the economic development of the Arctic, of course, are essential links for prevention of depressive mood and keeping the optimism and encouragement of business, civic engagement of business and the local population, and also preventing the cult of “dead-end” or unpromising territories. The example of the Murmansk Governor M.V. Kovtun is interesting. She presented the project “Integrated development of the Murmansk transport hub” and also tries to prove (referring to “Gazprom”, “Rosneft” and “Novatek”) that the prospect of the Murmansk Region is to create coastal supply bases of materials and offshore equipment, deployment of production capacities for the construction and maintenance of offshore platforms aimed at support of offshore projects in the western Arctic 4.

Russia is interested in multiplier effect of resource cooperation of the country and its regions, so it is useful to see the inter-regional competition of the Russian ports — key actors using the Arctic communications. The author proceeds from the fact that the location of each seaport (town) in the implementation of federal priorities in the Arctic are adorned not only by populist self identity but finding the best combination of local patriotism and pragmatic solutions for socioeconomic development issues. Without this it is impossible to synthesize current geopolitical problems and turn them in the socio-economic success of Russia in the Arctic.

Such economic and investment philosophy is relevant for the Arkhangelsk region. Its administration is lobbying the implementation of three projects — the Northern Sea Route, “Belkomur” and construction of a deep-water port in Arkhangelsk. It is done with the hope for changes in the traffic flows and increase of the value of Arkhangelsk sea port in the eco-nomic development of the Arctic [5, 220]. Realistic expectations are supported by the 3.4 km length of the birch line of the port of Ekonomiya and its capacity to receive vessels up to 190 m long with a draft up to 9.5 m and a displacement up to 30 tons. This port is the only exis-ting container terminal in the North of Russia, traditionally focused on servicing the NSR. The port of Arkhangelsk is a hub for cargoes aimed at supporting the development of hydro-carbons on Yamal.

We will not duplicate the historical and economic specifics of the Arkhangelsk and Murmansk commercial port demonstrating, according to one author, the existence of a subjective competition between them on the basis of political lobbying [6, 37]. Now, it is possible to speak about the influence of the federal budget deficit of 2—1.5% of GDP and sanctions complicating macroeconomic positions of Russia in the Arctic. The new conditions will determine federal attention to the region and its greatest strategic importance for the development of the Russian Arctic.

Regions could be more accurate (objective) when defining their mission in the implementation of the RFAZ development strategy. There is no need to create the illusion of exclusivity of a regional center or the seaport. Every town could be called "the capital of the Russian North", but this obscures the purely economic development technology of the Arctic. Conditions of optimal management — clear separation of management functions in each region, for pulling the “blanket” complicates the comparison of the investment effectiveness and profitability of economic activities in the Arctic. For example, Arkhangelsk with its well organized functional framework of general cargo can be managerial focal point of the economic development and scientific study of the Arctic, mainly within the Barents and Kara Seas. In that and other roles Arkhangelsk can be an effective player on the Arctic stage, especially if the “Belkomur” — a railway from Arkhangelsk through Karpogory to Perm will be modernized. Commissioning of this railroad will increase the transport and transit potential of the region and revenues.

Unfortunately, it often happens that the existing possibilities for optimizing the economy are not available at the right moment and therefore cannot serve a factor of successful development policy. Many years of “unclearity” of this project, which benefit had been proven a long time ago, means reducing shipping shoulder compared to Murmansk and Ust-Luga for almost one thousand and five hundred kilometers. This fact is a significant argument. It turns out that

Russia does not have enough money for sustainable economic future. On the other hand, if “Belkomur” enacted in 2012—2014 without a deep-sea port in Arkhangelsk, the commercial attractiveness of Arkhangelsk might had been reduced.

“Belkomur” means a transit of goods with an estimated volume of 35—55 mln tons (coal, potash, container, forestry products and pulp and paper) that supposed to be trans-ported by sea as well. Processing of cargos would be difficult without new specialized automated port terminals. Finally, the construction of a new port area of 180 hectares is now included in the transport strategy of the Russian Federation until 2030 and its preliminary investment is 35 bln rubles. Therefore, “Belkomur” and Arkhangelsk deep-water port able to receive vessels with deadweight of 60 000 tons, together with the development of port infrastructure and innovative technologies of processing can be regarded as factors of “switching” commercial carriers of other countries and Russian enterprises to Arkhangelsk.

Will the volume of transit grow? Positive response to anticipate pattern: the region will surely strengthen integration with the world market and be an active in using the Eurasian part of the NSR. Then it is possible to reduce the attempts to exclude Arkhangelsk from the list of strategic support centers of economic activities in the Arctic and to project depressed expectations among its residents. Such views are not based on the empty space.

The actual position of Arkhangelsk is largely determined by macroeconomic decisions on inter-regional labour division (internal federal specialization) and the economic development of the Arctic. Objectively, Murmansk has more advantageous geographic location to redirect the transit of general cargos than Arkhangelsk. Unfortunately (or perhaps fortunately), it is better to look for new technological niches that allow re-export the glory and authority of the first seaport of Russia in one of the many Arctic logistics centers, in a historically new face in the Arctic region. For example, the leading center for shipbuilding in Severodvinsk — a part of the Arkhangelsk-Severodvinsk conglomerate is an important outpost of the northern folk culture and at the same it serves the needs for preserving and strengthening the role of the commercial sea port and railway hub as a tactical base of economic transshipment in the Arctic.

In my opinion, an attractiveness and optimism of life on the shores of the White Sea is not based on brand of Arkhangelsk, but on the quality of life in the municipality. If the quality of life is high nobody will speak about “anguish, cod and board”. Innovative upgrade of the local economy will contribute the identifying the territory of residence as a historically favorable, promising and stable by local people.

This is one of the origins for the transformation of the Arkhangelsk region and the reason for the planned growth of the GDP by the year 2030. The dynamics of transformation can be strengthened by Severodvinsk shipbuilding complex, if it will actively respond to the needs of civil and trawl fleet supply and meet the needs of other members of the economic development of the Arctic. Especially when choosing a constructive policy of import substi-tution for the production of equipment for maintenance of various Arctic fisheries or con-struction of oil and gas offshore platforms.

One more exclusive point of regional competition exists. A dockside specific of regions is combined with the humanitarian component. Official statements of the various scientific conferences held in Arkhangelsk contain ideas about its leadership in fundamental and applied research in the Arctic. Establishment of the Tiksi Federal Arctic Research Centre will also increase the competition between scientific and educational centers in Arkhangelsk, Murmansk and Syktyvkar for federal financial support. Sometimes there was a feeling that the volume of support would be smaller if there were mechanisms to exclude the presentation of scientific results that added nothing to knowledge about the socio-cultural development of the Arctic. It would be good to have a glossary of innovation for research reports that provide a fair presentation of scientific achievements of each grantee. Then, the theoretical trajectory of the regional studies would look more realistic.

Mainland transport infrastructure — requiredobject of macro-political development of the Northern Sea Route

It seems to be necessary to focus on the fact that “modernization and development of the Arctic infrastructure, transport system and fishery complex of the RFAZ are a priority of the state policy of the Russian Federation in the Arctic up to 2020 and beyond 5. However, the northern sea routes are only a part of the geo-economic problems of Russia. And they are not fundamental. In my opinion, we should not forget that the northern regions are outsiders when it comes to transport security and development. Problems of the transport and logistics units, integrating the commercial needs of road, rail, air and river transport, identified by some researchers [7], do not receive adequate attention.

Future of the comprehensive modernization of the transport and logistics network of the Arctic regions is rather unclear. That is why whole transport hub should be considered as macroeconomic imperative to optimize the conditions of the internal development of the Arctic region. The population of coastal arctic municipalities has, unfortunately, conceptual doubts about the accessibility of villages, improving the everyday communication with the mainland and positive results of modernization of the regional infrastructure.

It is possible and necessary to reverse these depressive expectations. The federal government should consider the transport infrastructure of the mainland of the North (Arctic) a geopolitical factor important for the state security and a reliable bridge of cooperation with Asian countries. It is time to implement a policy of inter-regional solidarity Arctic and use the institutionalization model of management for the development of continental communications. For example, it could be done on the basis of the project of eight railway lines that form the framework of land transport [8, 268]. Components of the framework — Transpolar railroad connected with Arctic ports, Western Ural railroad — shortest way of delivery for consumers in Asia and America, as well as Indikomur — the cheapest way of communication with Europe.

The unfavorable ratio of geopolitical security issues in the Arctic and economy of the northern regions could not be changed without concerted management, supported by public and private investments. Then the Arctic transit — maritime and mainland — could be brought to the criteria of modern transport and logistics communications. It was an issue that accompanied a discussion on the scientific and practical conference “The Arctic — perspectives of sustainable development” (Yakutsk, 2014) [9, p. 148-169].

Transition to modern transport hubs in order to increase traffic by the NSC in both directions — to the west and to the east with all of its financial and economic-importance, is not a good idea and motivation. The core of the national management of the NSC should be based on the principle of most-favored-sustainable socio-economic development of the arc-tic regions of the Russian Federation. Then the increase of route operation reliability and improving the structure of export and import flows would become an indicator of the effect-tiveness of Arctic policy.

So, we need a national strategy for integrated development of the entire network of transport communications in the northern regions for 15—50 years with protected sources of investment. This is the first foundation of faith that the transport communications of the North, Siberia and the Far East will help to implement the strategy of advancing social and economic development of the Russian North. Inclusion of the Northern Sea Route in the pri-orities of the “Transport Strategy of the Russian Federation until 2030” opens the way for investments in technological renovation of the transport. The revival of the seaport of Tiksi and construction of railway to Yakutsk are the real steps to a new perspective transport corridor from Asia to Europe. The more such projects, the faster the population and business areas of the Arctic would be satisfied by the positive influence of the NSR and its role in strengthening the country's geopolitical position. First of all, NSR will be a catalyst for attracting funding of federal taxpayers, a macroeconomic sponsor of modernization of business in RFAZ municipalities.

However, the role of NSR in economic and social development of Arctic regions requires optimal integration of control systems, legally separated privatization processes and the transition to a different form of ownership. Arctic ports except the port of Pevek are corporatized and transferred to the subjects of the Russian Federation and businesses. Arctic ports are still the weakest link of the Arctic route. The lack of funds makes the modernization of equipment slow. Berthing facilities in the majority of Arctic ports need repairs, reconstruction and dredging to receive modern vessels. In many ports, facilities for recycling are in critical conditions.

The transport fleet of shipping companies, except for the Arctic one, is corporatized. Icebreaking, rescue, and hydrographic fleet, port facilities, polar stations, navigation aids, hydrographic and hydrometeorological facilities and communication are federally owned. Icebreakers are in the trust up-governance of regional shipping companies — Murmansk, Far East and the North Sea Shipping Companies. It is not only winter that brings up a lot of unclear circumstances when even experienced captains are not sure about the duration of the winter icebreaking assistance 6.

Lack of nuclear icebreakers (or regulations of responding to the request) may increase the waiting time for assistance. It has already happened at the port of Sabetta. With an increase in turnover up to 20 mln tons some individual facts of icebreaker’s assistance can demonstrate the optimistic view of the intensity of the NSR shipping and active participation of foreign investors in development of mineral resources of the Arctic. And at the same time is can strengthens the commitment of the partners to the Western sanctions restrictions. The years 2014—2015 have shown that political blackmail is stronger than economic profits from the use of cost-effective and safe routes. Deck of geopolitical cards is good to be audited periodically and see if there is unfair competition and unfair country partnership in the Arctic.

It is appropriate to emphasize: the services of the icebreaker fleet are the marks of competitive infrastructure potential for foreign carriers. They will continue, in my view, to be scrupulous in matters of the time of delivery, the intervals of which are in correlation with the level of development and quality of the arctic transport system functioning. The initiative to transform the Northern Sea Route in the international project “Northern Maritime Corridor” together with the infrastructure of ports in northern Europe is a Western concept of the economic use of the Arctic seas. If by the year 2030 Russia implements the inter-mi-nisterial strategy for the Arctic transport system, balanced by the use of all types of tran-sport and roads (federal, regional, local and corporate) and based on the innovative technologies, then the transport infrastructure will be a reliable tool for attracting investments and creating a favorable business climate in the Arctic regions of Russia.

The same conclusion had the authors of the monograph, who supported us by providing five principles of effective participation of the state in economic development of modern transport and logistics systems in the Arctic [10, 53—54]. One of them is appealing to the administration of the NSR as the main state supervisor and the subject of Arctic shipping organization obliged to empower the rational use of the NSR and provide ecological safety of the environment 7.

Improvement of the efficiency of the inter-regional control of infrastructure and its modernization on the Arctic territories could be assisted by the joint efforts of the federal executive bodies, executive bodies of subjects of the Russian Federation and businesses. In this regard, the foresight is a very useful approach aimed at determining the strategic scenarios of regional development. Its productivity is represented by a synthesis of social and professional competence of specialists dealing with the strategies of optimal communication establishment. In other words, the culture of advanced management of economic interests is important here and its depth and the palette we have not yet diagnosed. Only in this case managerial platform for the effective implementation of infrastructure projects may appear. Focusing on timely adaptation to changes in the socio-economic situations eliminates the deformation of the missionary idea of harmonious economic and social development of the Arctic region. Thus the synthesis of the strategic vision and the operational intervention in the socio-economic processes warn political and market crises in Russia and its Arctic areas. This is a fundamental requirement for the coming 2—3 years of another crisis that will test the stability of the Russian Arctic.

Suez Canal — the landfill of comparing financial and economic models for the establishment of commercial exploitation of the Northern Sea Route

In order to establish proper commercial exploration model for the NSR we require reforms of the Russian Arctic policy when it comes to attracting foreign partners and inves-tors as the subjects of regular use and development of the northern transport corridor. We should reconsider the admiration of the NSR benefits. They are still potential not real ones. We should look closer to the objective weak points which are, unfortunately, real. It is crucial for optimal disengagement of optimistic and pessimistic (more on that below) variants of the NSR development at the important water artery of the world.

At the APEC Summit (2012, Vladivostok), the participants discussed the possibility of multistakeholder partnerships in the development of NSR, have confirmed the feasibility of an adequate forecasting model for a medium-term horizon of its successful competition with the Southern sea routs. There are some prerequisites for this and some brakes as well. On the one hand, a rapid growth in the volume of Euro-Asian transportation by the NSR is not excluded. However, it does not remove infrastructure constraints.

The dilemma of technological opportunities and actual potential, in my opinion, is retouched by idealized expectations of the Russian side about the place and the role of the NSR in the global network of sea transport corridors. Doubtless shortening of transportation by 30—40% compared with the transportation of goods through the Suez or Panama canals is advisable to consider with the help of the Accounting and Information Indicator. It should be understood that the shorter way is not the closest way. Its motivational role can be tran-sformed into a competitive advantage, if the other components of the federal and regional management will also be convincing arguments for foreign carriers. Time of delivery is largely determined by the port infrastructure services, assistance and security of naviga-tion. It is important to work out a formula for economic success of the transit routes. At a minimum, you need to clean up the ground for doubt of foreign ship owners about the NSR opportunities for the transit of large volumes of cargoes [11], about its prospects for private companies due to their knowledge of the current state of its ports and infrastructure.

A similar opinion is shared by the Norwegian Shipowners' Association and the com-pany “Intertanko” that used shuttle tankers for the transit of oil and gas condensate along the Northern Sea Route. While the existing shortcomings (institutional, legislative, and economic) reduce the potential advantages of the NSR, the absolutisation of its future place in the scheme of global transportation is groundless. Let us focus on the doubts about the NSR potential (Pic. 2).

Exploitation costs

Supply and demand for icebreaker assistance and its availability in time and area

High shipping risks in the Arctic

Major barriers for the changes of the NSR and its transformation within the world maritime communication system

Picture 2. Doubts on the competitive potential of the Northern Sea Route

First of all, we are talking about operating costs, the value of which may vary according to the representative of “Canarctic Shipping” — a division of the Canadian company “Fednav”, and be about 50 thousand dollars for one way sail. Foreign shipowners are often a priori think about the fact that the icebreaker escort is expensive, and sailing in high lati-tudes is all about the damage caused by the Arctic ice, which raises the price of insu-rance. While the daily time charter rate of sailing from Europe to China has a significant difference, while the administration does not remove the NSR concerns not to get the icebreaker at the right time and in the right place, we can say that the NSR has less competitive potential compare to the Suez Canal and it is going to be so for the next 10—15 years only. Especially if the NSR administration shows the ability to change, prepare for the introduction of discounts to tariffs if shippers have a motive to the approbation of the Arctic route. Secondly, let me remind you that since the pass-through operation along the NSR (icebreaker “Alexander Siberians”, 1932) the risks of shipping have been complicated by complex technological, financial and economic problems.

Probably, information about the bad ports’ equipment, poor awareness of the wes-tern ship owners about medium-sized ports along the Northern Sea Route, the conditions and the degree of efficiency of loading and unloading, and a list of ship repair services are too ideological “chains” in the choice of foreign companies. Such indecision is fueled by foreign analysts, inspection practices of transit ships in Russian ports and collection of border and customs payments, often seen as anomalies of international law.

Perhaps, Russian is not perfect, but, in my opinion, the investment needs of the NSR infrastructure maintenance should be fulfilled jointly by all of its users. A trend of transformation of the Northern Sea Route in the international transit routes, which in the XXI century can be the route all year round use, accelerates the renewal of institutional skipping regulations of foreign vessels. National management, probably, will assimilate civilized principles and standards of regulating the economic activity along the Northern Sea Route, the behavior of crews and service personnel.

Hopefully, the Polar Code of the International Maritime Organization (IMO) will intensify the efforts to improve the attractiveness of the Russian Arctic and its ports. Indeed, this is a factor of the improvement of quality indicators of international trade and it is interesting for Russian and foreign tramp shippers along the Northern Sea Route. The redistribution of freight traffic is important for carriers, shippers and receivers and actually financially beneficial if the north and south trade routes will be optimized.

Redistribution of world freight traffic — is not synonymous with its rise as an inter-national transport communication over the role of the Suez Canal. Why is that? The situation could be like that: “economically the Northern Sea Route will not be as profitable as expected by the authorities” [12], so the federal government will have to invest the estab-lishment and modernization of port infrastructure, build icebreakers, and deal with other issues to make the NSR fit to the defense strategy of the country.

Unfortunately, this is and will remain a difficult issue for management strategy. It is obvious. Cup full of risks is filled by the extreme conditions of navigation, increased demands on the environmental safety of economic activities in the Arctic. It is impossible not to take them into account. Otherwise, it is recommended not to “take up the plow”, and just “get into the body” of unproductive marketing search for potential carriers. Well, the market encourages brave people who are looking for new markets for their products. They need help to find rational logistics solutions. NSR can help them, if the service will be commen-surate with the needs of foreign carriers — European and Asian. While this balance is not found, the risk of insufficient demand on transit services in the years 2015—2030 is still rather high.

Reducing such risks entails increased financial and investment costs, which are being incorporated into commercial transit tariffs and may require state funding. Such protec-tionism for private domestic shippers is contrary to liberal trade rules. So, national strategy for active use of the NSR and international approaches may have conflict of inte-rest. Without governmental support or redistribution of tax revenues, it is difficult for the NSR to become beneficial route of transportation of minerals from the Arctic regions of Rus-sia, and to solve their internal socioeconomic problems. There should be an assessment of conflict of interest of the federal center and the regions of the Russian Federation. The content of knowledge of potential conflict between them is necessary for the sustainable development of the country and its international position in the Arctic.

The development of NSR is able to give a powerful impetus to the development of the Far East and the North of the Russian Federation and also to the economy in general 8. However, the lack of such a political recognition is obvious. We proceed from the thesis that the concept of transformation of the route in order to attract private companies from Russia and abroad — is one thing. The concept of competition between the NSR and the Suez Canal and other world's largest objects of maritime infrastructure — is another.

Financial postulate should not be seen as an appeal of Russia to reduce transport time. First of all, it is important establish a strategy of synergetic benefits for all parties — the operator of the route, the carrier, the shipper and receiver of the cargo. The globaliza-tion of world economic relations is positive when the international trade becomes a source of cost reduction, increase of commodity and income for all parties. The path to optimal loading of the NSR — is the price favor to the growth of its competitive appeal, which is not necessarily a factor of its competition with the Suez Canal. Specifically, this means that the total cost of transit by this route should be at least no more than the cost of other international sea routes. With unconditional forestall time and cost of delivery, the NSR may cause restructuring of the world export and import flows (in 20—30 years), while remaining parallel to the major routes.

Are there enough assumptions about the conditions of the success of the integration of major producers (sellers) in the world markets? No. Designing the prospects of successful communication fate of the Northern Sea Route should be a separate link of the federal macropolicy. Its components are: the inventory; regular updating of the list of possible users, including foreign companies that approved and implemented long-term plans for the regular transit of bulk cargo through the SMP. But even with the success in optimizing the prospects of transit, it is necessary to move away from the idea of the Northern Sea Route use for reducing the distance and costs of transport [13, 92].

The NSR as the national communication route of Russia in the Arctic, as a single eco-nomic entity, does not exist. The dominant politico-psychological perception of the NSR and its components does not let it to happen. This is probably the underlying reason for the unclear jurisdiction over its management and supervision of its use. In one case, lawyers are confident that Russia has rights to control the passage of ships along the Northern Sea Route because of the UN Convention on the Law of the Sea, established in 1982. On the other hand, the US does not agree with Russia's exclusive jurisdiction over the Northern Sea Route. On 12th of January 2009 the USA presidential directive on national security indicated its policy in the Arctic. With regard to the topic of this section, the USA states that the highest national priority is the freedom of trans-Arctic flights, freedom of navigation in the Arctic, including the Northern Sea Route, which runs along the territory of Russia. Con-sequently, the work to clarify domestic legislation on regulation of foreign shipping along the national routes and port areas must be a priority of the Russian Arctic Policy.

Transit route may be the country's territorial waters and exclusive economic zone of Russia. In difficult ice conditions foreign carriers prefer to the use the maritime space of exclusive economic zone of the Russian Federation, so initially it is necessary to negotiate and agree on the rules and regulations on the regime of the Arctic International Eurasian corridor along the territory of Russia. It is not easy to do especially in a phase of strong international pressure on Russia because of the events in Ukraine.

The presence of such an agreement will be the main geopolitical advantage for Russia and the most important institutional norm ensuring Russian right to establish rules of using the NSR for foreign carriers. When Russia agrees to these rules with the Arctic states, the regime of the International Arctic corridor will consolidate national political legitimacy. It will reflect the collective power of global community over the Arctic circumpolar commu-nications, the jurisdiction of Russia and its supervision to ensure the safety of navigation and setting up regulations for foreign ships. This will eliminate the concerns of non-Arctic states on access to the route possible due to instability of the NSR governance and even if the cold cycles of western geopolitics in relation to Russia will repeat. Then indeed the role of the Arctic part of the national transport system will remain significant. In any case, it is about the part of NSR, which is directed to Europe, because in the future exports from Russia will go to the countries of the European Union.

Conclusion

Presentation of the study outlined some key problems of the state program of development of the Arctic and the models involved in the establishment of the Northern Sea Route for need of the socio-economic development of regions. The facts lead to the concept of the Arctic regional space as a complex in need of management and well coordinated integration of federal and regional authorities and corporate institutions.

Three more generalizations are appropriate. Connection of continental Arctic regions to the routes of communication — the NSR locates the theory study and practice of using the NSR capabilities to meet the challenges of intra-regional development. Most of the subjects of the Arctic management acts inside the functioning of transport and communi-cational network. So, it is scrupulously towards the financial cost of its use. Finally, this net-work has not yet been a unified infrastructure system, harmonizing the market of buyers and sellers, the interests of the Arctic population and clusters.

We, of course, support the global market competition as a tool to optimize the structure of the world's transport communications. However, we do not see it at this stage of history and we will not see it next 15—30 years when it comes to the competition between the Northern Sea Route and the Suez (and especially Panama) Canal. The profita-bility of the NSR must be a result of business operation of domestic macroeconomists and federal (regional) authorities in order to fulfill the needs of intra-regional and inter-regional division of labor, support of national and local markets of the arctic regions.

This aspect of the effective development of the North attracted considerable traffic flows and investment, and contributed to the search of opportunities to establish the att-ractive regime of the NSR. When the economic climate is favorable for domestic residents, then foreign companies will carry their cargoes via the Northern seas. Rising of volumes of transported goods will index the NSR international status not to damage the Suez Canal.

The growth of global GDP will give enough work for both routes. Each route has its own objective limits (the Suez Canal does not pass ships with a draft of more than 20.1 m., the NSR saves 500 thousand Euros per ship and up to 15 days on the way) [14, 460]. So their pros and cons will differentiate the traffic not by the laws of the global competition but by the principle of geographical specialization.

This does not cancel the political competition for the Arctic regions of the dominant influence in the Arctic cluster economy. Only the underlying reason, according to the researcher, is different. At stake is the credibility of regional leaders, their ability to inspire the people of the Arctic regions by the brand of a special role in the Russian Arctic strategy. Of course, for public policy there is quite pragmatic purpose: to get maximum financial resources from the state and corporations. Without it, the regional governments cannot overcome the depressing story of survival and to dispel stereotypes circulating among the population about a dead-end and unpromising situation in their towns. Only large-scale projects and ideas can inspire.

National approach to the Arctic route, presented by the author, was not accidental. Bearing in mind the geo-political excesses, possible hard geo-economic, military and strategic maneuvers of the leading countries of the circumpolar world, it is necessary, at once and for all, to learn the principle of the geopolitical position of Russia in the Arc-tic. Motivation to strengthen international and regional legal basis, in particular, through the Arctic Council and the Barents/Euro-Arctic Council must continuously verify the sincerity of our partners in the Arctic and aim to ensure the inviolability of the Russian interests in the Arctic as the eternal criterion of its military strategic confidence in its security.