Speech at Meeting of the Russian Security Council on Protecting Russiaís National Interests in the Arctic September 17, 2008

The Kremlin, Moscow


Colleagues, on the agenda today is the issue of Russiaís state policy in the Arctic. It is no exaggeration to say that this region has strategic importance for our country and that its development has a direct bearing on our efforts to implement our long-term national development goals and make our country competitive on global markets.

According to the information we have, this region accounts for around 20 percent of Russiaís gross domestic product and 22 percent of our national exports. Mining of rare and precious metals is one of the most highly developed sectors in the Arctic region. The region is also home to such major oil and gas producing areas as the West-Siberian, Timano-Pecherskaya and East-Siberian fields. Experts estimate that the Arctic continental shelf could contain around a quarter of the worldís hydrocarbon resources. Use of these energy resources, these resources, is the guarantee of Russiaís overall security and energy security.

The transcontinental Arctic Sea Route is another of the Arctic regionís assets. This route can connect European, Far-Eastern and river transport routes, thereby making it possible to reduce transport costs and substantially increase business ties between Russian businesses and their foreign partners.

I stress that these huge investment and economic opportunities are still only potential for now. Development of the Arctic region is hampered by poorly developed economic infrastructure and unresolved social problems, including a lack of affordable passenger transport and a severe housing shortage. A look at the figures says it all: there are 650,000 people on the waiting list for housing subsidies in this region. As a result, people continue to leave the far northern regions and there is a serious depopulation problem there.

Our biggest task now is to turn the Arctic into Russiaís resource base for the twenty-first century. Reaching this goal requires us first to resolve a whole number of specific issues. The main issue is that of reliably protecting our national interests in the region.

We need a solid legal and regulatory framework for our activities in the Arctic. We need, above all, to finalise and adopt the federal law on the Russian Arctic zoneís southern border. A treaty fixing in law our external border on the continental shelf is also on the upcoming agenda. This is a very important task.

I stress that this is our obligation and quite simply our duty to our descendants. We must ensure reliable protection in the long term for Russiaís national interests in the Arctic. Second, we need to reduce the development gap between these regions and other regions.

Considerable amounts of federal money, including through a number of federal targeted programmes, have been put into the northern regions. But there are still problems with ensuring this money is spent rationally and invested in genuinely effective production and creating new jobs. It is also clear that budget money alone cannot resolve the Arcticís problems. What we need here above all is to harmoniously combine the possibilities of the state, business community, and local self-government. I draw the federal and regional authoritiesí attention to the need to use modern economic methods and mechanisms in this area.

Modernising the transport infrastructure is one of our most urgent priorities. The lack of roads, local air transport links (which for the most part have broken down in the post-Soviet period), modern river and sea ports and an ageing fleet, including the icebreaker fleet that is so important in this region, is a real obstacle for developing the Arcticís rich investment potential.

Technical modernisation of airports is a key issue in this context. Air transport is practically the only type of transport link for remote districts. One solution is to develop competition in the domestic air transport market. At the same time, some groups of the population and non-profitable transport segments cannot get by without support measures, especially in the Far North.

Furthermore, the Arctic Sea Route is one of the main links in the Arctic transport system. It plays a crucial part in ensuring timely delivery of needed supplies to the Far North. We know that there are still problems in this area and we need to work not just on restoring freight volumes to former levels but also on increasing them further through development of natural resources and products manufactured by processing companies. The Arctic Sea Route needs to be modernised with an up-to-date navigation, search and rescue system. We need to expand the network of ports, use ships sailing under the Russian flag and work in general on developing this route as one of the countryís strategic national main transport routes.

The transport component of developing hydrocarbon deposits and exporting them by sea also needs to be made more efficient.

Resolving the regionís environmental problems is another priority we need to keep working on, including by implementing the agreements reached at international forums such as the G8 summit in Hokkaido.

Protecting the environment and developing eco-tourism are among the conditions for preserving the indigenous northern peoplesí way of life, and we must not forget about developing the indigenous peoplesí culture and traditional industries and crafts.

Finally, developing the social sector is a key task. It is extremely important now to give the people in the Arctic region the modern communications and technology they need to get access to better education, professional training and leisure opportunities. We need to take active steps to equip educational establishments with modern technology, the latest communications systems and the Internet, and we have already begun this work. And, particularly important in this region, we need to ensure that healthcare institutions there have telemedicine equipment.

I hope the results of todayís Security Council meeting will form the foundation for effective work together in our countryís Arctic regions.

Thank you for your attention.

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