7. Perspective on the NSR
In the 17th century, Vasco da Gama opened up the southern trade route around the Cape of Good Hope, Russia was making a similar effort to open a northern route as it consolidated its grip on most of today's NSR. As Russia's control of Siberia and the northern coast grew stronger, a succession of rulers from Peter the Great onward strove in one form or another to open up a traditional northeast passage, in the name of the national interest. Given this historical background, the NSR has long been recognized as a Russian territorial route. Secretary Gorbachev's declaration of the NSR as an international commercial shipping route and the work of INSROP and other organizations were all no more than the first step in establishing a commercial route through the Arctic Ocean. History teaches that the only way to build such a route is to accumulate a solid track record of successful commercial shipping.
Once the route is opened, it will have to be fed and sustained. The development and export of natural resources and the development of coastal communities are an essential part of this process, as the history of other commercial routes repeatedly demonstrates. Once the economic viability of NSR shipping is established, the route's continued success will depend on how well the NSR can appeal to the international shipping market. Also critical to success is the rapid recovery of the Russian economy, or at least some clear signs that an upturn is on its way, including indications of inflow of foreign capital.
In 1997 Russia joined the ranks of the democratic world, casting off its previous system of rule by appointed regional leaders in favor of direct election by the citizens. This momentous event opened the path to the empowerment of regions along the NSR, as the first step toward devolution of authority to the regions. The future balance of power between the center and the regions in Russia is now very much an open question, and the future of the NSR depends critically on Russia's ability to sustain itself as a federal state. Today the chain of command between the center and the regions is far from clear, and although the constitution provides for equality among the various parties the practical division of powers and responsibilities is vague. This state of affairs suggests that the process of reaching agreement on the exact powers and interests of each level of government, as well as authority over compensation and the like, will not be a simple one. (Recently President Putin has decided to revive the old systems, in hopes of reestablishing the glory of a great and powerful Russia.)
Developments in the regions may well hold the key to the success of the NSR. Events in Krasnoyarsk deserve close inspection, as this resource-rich region is beset by transportation problems because of its remote central Russian location. Similarly, as Sakhalin develops its oil and gas fields, it can be expected to stimulate latent demand for the opening of the NSR from its far eastern end. As significant as these movements may be, still more important is a production-sharing law passed by the Duma in 1995 and effective as of the following year. Supported by this law, Russia is beginning to invite foreign investment in the development of its energy and mineral resources by the PS process, ceasing disposal by sale to foreign markets. Although this trend only indirectly affects the NSR, its implications are momentous. Rather than arrogating absolute control over resources as heretofore, the Russian government now permits the development of its resources according to the demands of the global market. Of course, the Russian government still dictates what conditions must be satisfied when entering into long-term production-sharing projects such as resource development ventures. The consistent application of this and other laws in Russia rests on the establishment of a stable socioeconomic base, and since this remains a distant prospect, it is probably too soon to be optimistic about the future of production sharing. For this reason the success or any slight failure of the Sakhalin project will be closely watched.
