Russian Arctic Annual GDP to Reach US$500 Billion
Russia has budgetted US$86 billion from 2019 to 2025 to develop the Arctic, according to Nikolay Korchunov, Russia’s representative in the Arctic Council. Russia already has the largest economic status in the Arctic, with the region accounting for about 10% of Russia’s total GDP and close to 20% of all Russian exports.
Korchunov stated that the Russian Arctic could provide about US$500 billion in annual GDP by 2030, mainly from increasing global demand for mineral raw materials and sea products. Of the immediate infrastructure spend, he stated this should contrinute about US$210 billion in annual revenues.
Russia has been busy cementing its Arctic territory as a ground for future development and trade. The Northern Sea Route is becoming increasingly viable as the quickest route between Asia and Europe, and Moscow has been keen to get bilateral agreements in place over the agreed usage. These are in the form of long-term legally binding agreements identifying the volume and cost of transporting goods along the Northern Sea Route. The deadline for these agreements is 1st September this year.
The Northern Sea Route is the main sea route in the Russian Arctic, and crosses the Arctic Ocean (Kara, Laptev, East Siberian, and Chukotka) and partially the Pacific Ocean (the Bering Sea). The Northern Sea Route from Kara Gate to Providence Bay is around 5,600km.
“There are opportunities for foreign investors in infrastructure development in Russia’s Arctic region” says Chris Devonshire-Ellis of Dezan Shira & Associates “Chinese investors are already there. Using a Chinese JV partner to access opportunities in Russia may be one way around Western sanctions.”
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