It is important to recognize these undercurrents for the significant indicator of economic recovery that they are.
The economic meltdown in Russia naturally struck a near-lethal blow to maritime shipping, which had once been expected to benefit most from the shift to a market economy. Russian territorial waters were divided into two zones, East and West. The two state-owned shipping companies, Murmansk Shipping and Far East Shipping, were privatized, and a number of companies of various sizes were established, under the worst possible conditions: Russia's GDP and trade volume were both shrinking, shipments of strategic materials were in freefall, and economic difficulties throughout Russia were reducing or even halting demand for shipment of materials in every region. These firms were founded just as shipping companies worldwide were busily streamlining and downsizing, with no prospect of a turnaround in global business conditions. Given the lack of credible scenarios for recovery and the battery of problems these enterprises faced, Russia's northern ports overflowed with ships that stayed moored and never put out to sea.
Although the Murmansk and Far East Shipping Companies continued to divide their spheres of operation along east-west lines, as each enterprise moved toward operating under market-driven principles it gradually became clear that the Murmansk company, handling by far the more profitable market, had the strongest voice in the development of the NSR. Nonetheless the profitability of the Murmansk outfit is in doubt as well. It is supported by a public commitment from the Russian government to subsidize the operation of its nuclear-powered icebreakers; with opposition to such funding on the increase, its ability to increase its opportunities to use these icebreakers, whose profitability is assured, has become a question mark. Although the full-fledged opening of the NSR raises a host of questions regarding insurance fees and so on, it would also clearly be the "killer app" that rescues the Russian shipping industry.
In opening the NSR, the following conditions must be met before all else. Russia's shipping industry must not be a party to the illegal outflow of Russian assets to other countries. It must take part in the economic recovery of Russia through its own efforts, in the context of a national policy that is acceptable to the international community. Finally, it must abide by its financial promises, under a legal framework prepared on the basis of market principles.
2.4 Technological background
The NSR presents the challenge of one of the most forbidding natural environments on earth. To overcome this obstacle, the following minimum technological conditions must be met.
* Information on weather and ice conditions must be available to a sufficient standard to ensure the safety of navigation and enable optimum routing.
* This information must be made available on each voyage both in advance and on a real-time basis.
* Navigation methods appropriate to all ice conditions must be established.
* Technology must be established to enable the design and construction of ships with excellent capability for safe transit in ice-infested waters.
* Technology must be established to enable the design and construction of the most appropriate and efficient support icebreakers.
* Land bases and other fundamental infrastructure must be established with navigational support and rescue facilities.
* Facilities and/or systems must be established to provide training for navigation in polar ice-covered waters.