Since the fulfillment of this wish hangs on the strength of Russian finances, an upturn in Russia's economy is strongly to be desired.
6.2 Operation System
In attempting to render NSR operation practical, many problems are confronted, some of whose solutions are maddeningly elusive. For instance, the Russian escort fee structure is badly distorted, where the escort fee and the NSR shipping frequency and/or volume have an inverse relationship: As the number of requests for support increases, the costs associated with providing the support decrease. The recently privatized Russian shipping companies, which entered into the business of navigating the harsh seafaring environment of the NSR with little preliminary groundwork, may wish to continue with the status quo for a while longer and leave costly technological advances for another time. However, the low levels of NSR shipping, as is generally supposed at the beginning at least, render untenable the expense of maintaining the current fleet of icebreakers. If the NSR administration balances the expenses of the support system against the income from escorted vessels escort fee, the NSR will surely lose its commercial viability. If the opening of the NSR to international shipping was promulgated as Russian public policy, unless some framework were adopted officially for assigning costs and providing financial support through taxation, the NSR cannot open the gate to becoming a internationally competitive sea lane. However, the maritime policies of the Russian government are vulnerable to condemnation as unfair in the international practice and might raise accusations that the arrangement is a violation of GATT.
Another urgent issue is the paucity of infrastructure for such tasks as coastal navigational support, rescue operations and other emergency actions. Some guarantees from the Russian government must be obtained to offset the risk caused by this unfavorable infrastructure compared with those in the conventional shipping routes. Presently sufficient work is lacking on specific scenarios to determine what sort of infrastructure should be provided where. Despite the critical condition of the NSR infrastructure, none of the shipping companies is in the habit of thinking of the NSR as an international shipping route and conducting systematic and purposeful examinations to determine the kind of investments necessary to render shipping viable.
If foreign investment is vital in Russia's NSR operation systems, the benefits and risks of the investment should be assessable. In other words, the investment criterion proposal and outlines of the investment credit, life cycles, investor yield, and investment subsidies and tax credits earmarked specifically for NSR operation should be clearly presented to the international market.
As for satellite information services for prediction of ice conditions, the best service system largely depends on the information users want and how they intend to use it. Although it is too early to establish what this system will look like, an outline of the contents of an NSR information service, or at least its prospects, should be offered to the market. If this action is not taken, few companies would evaluate the NSR as a competitive international shipping route.
6.3 Economic, Social and Political Systems for the NSR
6.3.1 The Economy
(1) The Energy Sector and the Economy
The energy market today is on shaky ground, creating immense repercussions for other industries and economies in the world, and in the Russian economy as well. Russia's vast store of energy resources, and the export of these resources to foreign markets, is often touted as the key to lifting the country out of its present economic turmoil. Yet foreign investors must be sensitive to the widespread public opinion that foreigners are depleting Russia's resources.
