Research and Discussion

The Arctic as a place of great power competition

9/24/2022 10:36:30 AM

Although being a sparsely populated, deserted area with harsh climate, the Arctic has many economic, commercial, military and security benefits that have made this region the focal point of the competition for influence between great powers, and complicated developments are expected to continue.

A promising land

With an area of more than 16 million square kilometres and is surrounded by the Arctic Ocean, the Arctic is one of the coldest regions on Earth. Winter temperatures here can drop to -500 C while summers are short and temperatures often remain at the threshold of 00 C. However, the area of this region varies depending on the extent to which the ice melts. In recent years, scientists have warned of record-breaking ice in the Arctic. According to the Arctic Monitoring and Assessment Programme (AMAP), since 1971, the average annual temperature in this region has risen by 3.1 degrees Celsius, which is much higher than the increase of 1 degree Celsius of the Earth. Therefore, researchers fear that if the Earth’s annual temperature increases by 2 degrees Celsius, the risk of the complete disappearance of Arctic ice in the summer will be 10 times higher compared with the increase of 1.5 degrees as targeted in the 2015 Paris Agreement on climate change.

However, this global climate crisis is opening up many opportunities in a region of huge economic and political benefits. In the past, metres of ice used to defy any human attempt to navigate this frigid region, yet glacial melting has created a new promising transport route. Currently, cargo ships from Asia to Europe have to go through the Indian Ocean, then the Suez Canal towards the Mediterranean. However, when the Arctic becomes more gentle, the shipping time to the North is expected to be shortened by 19 days with a reduced cost from 25% to 20%. This has made the Arctic an important economic and political region of international stature as its waters are linked with Asia, Europe, and North America (about 90% of international trade takes place in these three regions).

Apart from its increasingly obvious potential for transportation, the Arctic is also home to many natural resources. Under the cold white ice lie the deposits of precious metals, such as zinc, lead, and nickel. In addition, according to scientists, the Arctic’s cold sea contains about a third of global natural gas reserves and a quarter of the world’s oil reserves. This region’s mineral and energy reserves are estimated to be worth more than 30 trillion USD. In terms of telecommunication and space research, the Arctic possesses various advantages as it is located in the centre of the Northern hemisphere, between North America, Europe, and Northeast Asia. Currently, all eight member countries of the Arctic Council have territories in the northernmost region of the globe, but only five of them, namely the U.S., Russia, Canada, Norway, and Denmark have an arctic coast.

The increasingly fierce competition

Although it is considered the second largest desert in the world after Antarctica, access to the Arctic promises many geopolitical and economic benefits to concerning countries because of its outstanding potential. Therefore, the competition for influence in this deserted region has been ongoing for decades and is getting fiercer. In recent years, this competition has not only taken place between the countries of the Arctic Council but also involves other countries and international organisations.

In this increasingly fierce competition, Russia has outstanding advantages. As a country that own 53% of the area surrounding the Arctic, Russia considers this area “home”. For Moscow, this is a strategic area with essential values both in terms of politics and economic development, so the protection of this area is enshrined in Russia’s military doctrine. In 2008, Russia issued a directive on the basic principles of Arctic policy towards 2020, considering Russia’s Arctic region as an area of strategic resources for economic development and transportation. With its growing importance to Russia, in April 2020, President Vladimir Putin signed a directive on the basic principles of Russia’s Arctic policy towards 2035, which aims at developing this region’s infrastructure, population structure, and economic activities. The act of setting out roadmaps for management, exploitation, and expansion of influence at an early stage and in specific stages shows that Russia is fully aware of the strategic value of this region for its economic and security development. Moscow has allocated its budget in many big projects in the Arctic, notably the Yamal LNG carried out on Yamal peninsula located above the Arctic Circle. This is considered one of the largest and most complex liquefied natural gas projects in the world. In terms of transport, in May 2018, President Vladimir Putin expected in a decree that the freight traffic along this Northern route will increase to 80 million tons per year. Before the outbreak of the Covid-19 pandemic, the economic activities in the Arctic were estimated to contribute about 10% of Russia’s gross domestic product and nearly 90% of Russia’s oil and gas production. The fierce response of European countries to the conflict in Ukraine has made Russia more determined to strengthen security in the Arctic where its rich resources are stored.

In addition to its economic benefits, the Arctic also occupies a key location in Russia’ security strategy. Because this region offers the shortest route connecting Russia and North America, it has become the focal point of the strategic competition between Moscow and Washington. Glacial melting in the Arctic and technological advancements also create favourable conditions for Russian ground forces to advance to the Arctic-Atlantic border. Therefore, with its advantages in geographical location and weaponry, Russia has actively built up its military posture in this region and has gained advantage over the West. Moscow has made significant progress in re-establishing its military presence in the Arctic, building and restoring modern radar stations, airfields, anti-aircraft and anti-ship missile systems that help create an effective defence system.

However, Russia’s efforts to protect this important economic and security region pose a challenge to the U.S., making Washington to push for more aggressive policies in the Arctic. In fact, the world’s most powerful country has been fallen behind in this competition. Since the end of the Cold War, the U.S. has no longer considered Russia and the Arctic as the focal point of security and has focus its resources on combating newly emerging threats. However, the U.S. has started to change its position because the Arctic is becoming increasingly accessible while Russia is paying greater attention to this region. The cornerstone document for U.S. Arctic policy is Directive 66 signed by President Barack Obama in 2009, which focuses on environmental protection and sustainable development. Four years later, in May 2013, the U.S. published its National Strategy for the Arctic, setting strategic priorities for this region over the next 10 years with the goal of protecting its security interests, strengthening its managerial role in the Arctic and promoting international cooperation. By 2017, President Donald Trump administration issued a National Security Strategy, in which the Arctic is classified in the group of land, sea, and space that the U.S. claims sovereignty. This region is considered a priority, important strategic and security interest that needs to be protected and promoted.

Two years late, President Trump offered to buy the Danish island of Greenland. While this proposal was seen as impulsive and somewhat surreal, it reflected a landmark U.S. shift towards the Arctic. In fact, Washington also implemented more dynamic policies concerning this land under the presidency of Donald Trump when the U.S. Department of Defence published the Arctic Strategy, emphasising the need to strengthen military capability, partnerships and alliances, and to promote infrastructure in this region. The U.S. interests in the Arctic are twofold: commercial in terms of mining investment and geostrategic, both of which are facing fierce competition from Russia and China. Therefore, the Pentagon has outlined a list of key priorities that help the U.S. to regain its advantage in the Arctic, including plans to build Arctic legions, which are ready to engage in long-term operations in extremely low temperatures, on snowy and mountainous terrain. The U.S. Navy has begun regular patrols in this region, making the competition in the Arctic “heated”. The expansion of NATO with the recent participation of Sweden and Finland has shifted the balance of power towards the U.S. because Russia is the only country in the Arctic belt that is not a member of the North Atlantic Treaty Organisation (NATO).

Nevertheless, the competition in the Arctic will become more complicated because it attracts the participation of countries both inside and outside the region, most notably China. Although it has no territory in the Arctic, China has been an official observer of the Arctic Council since 2013 and it has identified itself as a sub-Arctic country, which the U.S. vehemently denies. The world’s most populous country is also expecting a lot in this region and thinks that the Arctic is of paramount importance to China in many aspects, especially economic interest. China hopes to take advantage of new opportunities brought about by glacial melting, especially in exploiting resources and maritime routes to promote its economy. China also laid out an ambitious Arctic strategy with its Arctic Silk Road initiative and the 2018 Arctic White Paper. Chinese oil and gas groups currently have a total 20% stake in the Arctic LNG-2 project with other groups, namely Novatek, Total, and Japan Arctic LNG. In 2019, China National Chemical Engineering Company and Russia’s Neftegazholding company signed a contract to build infrastructure at the Payakha oil field, with a total investment of 5 billion USD within 4 years and is expected to start in 2023. Additionally, China is also pursuing bilateral cooperation with Arctic countries, especially Nordic countries in scientific research in this region in order to maintain a greater presence here.

With its abundant potential, the Arctic has been of particular concern of many countries, making this region more and more “internationalised”. That would consequently heat up strategic competition in this region, which can pose potential risks that could go beyond diplomatic frameworks.