Konstantin Zaykov: Arctic regions can achieve more building with close integration

Konstantin Zaykov: Arctic regions can achieve more building with close integration
20.05.2021

Konstantin Zaykov, Professor of the Department of Regional Studies, International Relations and Political Science at Lomonosov Northern Arctic Federal University (NARFU), talked to Arctic.ru correspondent Kristina Khramtsova about how the Arkhangelsk Region is benefitting from participation in the state program for the development of the Arctic, what obstacles stand in the way of implementation and how they can be overcome.

Kristina Khramtsova: Last year, the Guidelines for the State Policy of the Russian Federation in the Arctic to 2035 and the corresponding Strategy for the Socioeconomic Development of the Russian Arctic were adopted. Has the approach to territorial planning changed compared with similar documents adopted during the previous period?

Konstantin Zaykov: We all know the famous Russian saying by Leo Tolstoy which roughly translates as “the map is not the territory.” The development of the Russian Arctic’s public administration system is the most important achievement of 2019 and 2020.

The previous decade was beset with several back-to-back economic crises, which led to slashing Russian Arctic socioeconomic development program budgets, which, in turn, stalled the plans that were set in the 2013 Strategy and the 2008 Guidelines. On top of that, the process for developing the Russian Arctic’s governance system took 10 long years.

The Ministry for the Development of the Russian Far East, the Corporation for the Development of the Russian Far East and Arctic, the restructuring of the State Commission for the Development of the Russian Arctic - all of that was finished in 2019–2020, which, in general, led to forming an integrated governance system for the Russian Arctic. This is what the Russian Arctic has sorely been missing in previous decades.

I remember clearly the conferences and expert panels held in 2014–2016 where the representatives of the Association of Polar Explorers and Artur Chilingarov spoke. It was often emphasized that the Russian Arctic had no “owner.” Fortunately, the “owner” has shown up over the past two years, which made it possible to put together a new set of documents within a short period of time.

In the previous period, regulatory paradoxes were the problem. The guidelines for the state policy were adopted in 2008, the Strategy was adopted in 2013, and the governance entity (Presidential Executive Order No. 296 On Land-Locked Territories of the Arctic Zone of the Russian Federation, which they focused on, was adopted in 2014. The Program for the Socioeconomic Development of the Russian Arctic was adopted that same year. In other words, the process of putting together this package of documents took an inordinate amount of time during the previous period.

In addition, these documents were put together largely as a nod to the fleeting concerns of that time - the “oil Eldorado” can be clearly traced in the documents from the first decade. But over time, with the next crisis underway and oil prices plummeting, the optimistic outlook faded.

This time, we managed to avoid this due to the fact that the entire set of documents was adopted within a very short amount of time. Both the State Policy Guidelines and the Strategy were adopted in 2020. This year saw the Program for Social and Economic Development and the plan for implementing it come to fruition.

Kristina Khramtsova: Do you think these documents have been worked through thoroughly enough?

Konstantin Zaykov: The current Government Policy Guidelines and Strategy represent a major effort to rethink strengths and weaknesses. The documents cover the work done in the previous decade and outline key strengths and weaknesses.

The priorities are clearly defined. The focus is not only on producing hydrocarbons, which was covered in the strategic documents of the first decade, but also on developing the Northern Sea Route. Much is being said about socioeconomic development. In addition, the documents highlight science and innovation, which in fact, cut across the priorities and goals formulated in the Strategy to 2035.

The Strategy Implementation Plan is also quite clear and covers the jurisdictions of each ministry and department. Our top priority is to properly coordinate the actions of the departments and constituent entities of the Russian Arctic. The lack of coordination between them is a major problem which underlies the failure to fulfill the goals of the previous program. That is, the problem then extended beyond the budget.

In addition, the funding mechanism must function properly, because to a large extent, the success of any particular initiative depends on the budgetary resources available for the Socioeconomic Development Program.

Kristina Khramtsova: Do federal documents fully reflect the things that are important for the Arkhangelsk Region?

Konstantin Zaykov: I think so. One distinction of the new strategy is that it has a clear regional focus – something the previous strategy didn’t have. When the Ministry for the Development of the Russian Far East and Arctic and the Agency for the Development of Human Capital in the Far East and Arctic were drafting the new package of documents, they included the priority projects of every region, while meeting the goals at the federal level. In a package, this approach produces a multiplicative effect.

Russia’s Arctic regions, including the Arkhangelsk Region and us (representatives of Northern Arctic Federal University as experts, took part in assigning tasks to each Arctic region as part of implementing the national goals.

Kristina Khramtsova: What are the social problems of Arkhangelsk Region residents?  How can they be overcome?

Konstantin Zaykov: There are plenty of social problems.

To begin with, there is the outflow of the population. Young people are leaving the Arkhangelsk Region for southern places that are more comfortable. At the same time, the population is ageing because those who stay are mostly the older generation.

To resolve this problem, it is necessary, first, to create a quality urban environment and drastically upgrade the infrastructure. Unfortunately, the image of the cities in the Arkhangelsk Region is below the expectations of young people. It doesn’t match their idea of the kind of place they want.

Second, it is essential to create an open and accessible labor market, a kind of Arctic marketplace that can help young people find jobs in other regions in the Russian Arctic.

Often, young people do not know about vacancies in neighboring regions because there is no open access to this information. Now, they all send their CVs to Lukoil or Nornickel but they have no idea whether these companies need specialists.

If a transparent and open labor exchange is established, our graduates will be able to get jobs in a neighboring region, for instance, on a rotation basis and then return home. In this scenario, many would take jobs in their region rather than leave for the south.

What matters is not even studying Arctic-related competences by our graduates; the main point is that the physical health of local residents is better adapted to living in the north. Often people who come to work in the north have to undergo a long period of adaptation. They receive good pay here, but sometimes they return home with illnesses.

Another way to keep youth here is to develop the scientific and education sector. Practice shows that the more specialized secondary schools and universities our cities have the higher the chances that young people will stay.

This happens because those who go to another region with a comfortable and accessible urban environment, a powerful university campus or a system of specialized secondary schools, simply prefer to stay and work there after graduating. And I’m not just referring to St. Petersburg or Moscow; young people from the Arkhangelsk Region often go to the Yaroslavl Region, for example.

According to statistics, up to 89 percent of all NARFU or Northern State Medical University (NSMU) graduates remain to work in the region – they live in the Arkhangelsk Region or work in neighboring Arctic regions. So, it is necessary not only to develop the urban environment but also to support the universities. It is important to turn Arkhangelsk into a truly large university city to attract our intellectual capital, our young people. In working here, they will promote the city’s development.

Kristina Khramtsova: What are the shortcomings of the current system of guarantees and support for the people in the Russian Arctic? How can we improve it?

Konstantin Zaykov: First, northern incentive pay is only nominal. In Soviet times, the incentive system encouraged people to go and work in the North because northern salaries were very different from the average in the central part of the country. But this is no longer the case. Thus, remuneration is no longer competitive unless you work in the high added value sector. This is a big negative in the North.

The problem of northern salary incentives and compensation is a serious one throughout the Russian Arctic. Analysts have long talked about this, but the solution is expensive financially. Who would pay an incentive compensation – private companies or the state? If it’s a private company, its products will cost more and it will eventually become uncompetitive.

We are seeing that our northern neighbors that compel private business to do this are starting to lose their market positions in the world. I‘m referring to Swedish and Norwegian companies that are losing tenders to companies that can produce goods less expensively – similar products from South Korea or China because the workforce is less expensive there.

Indirect compensation is another matter. Higher pay is one approach, but another approach might include an interest-free loan for education for the young people who live in the North. This could potentially encourage them to stay in the region. These models work in the Scandinavian countries. Or, young people could receive low-interest mortgage loans that are particularly important for young families and that would encourage them choose to stay in the region.

It is very important to develop support systems for the young specialists that work in critical areas but without high incomes. I am referring not to oil workers, miners or seamen but to teachers, doctors, scientists and hydro-meteorologists. They are very important, but their basic pay is too low. Therefore, it is necessary to offer additional benefits or preferences to encourage young people to keep their jobs as doctors and teachers or to work at northern hydro-meteorological stations.

Kristina Khramtsova: What will be done to overcome the economic problems in the Arkhangelsk Region?

Konstantin Zaykov: I believe it is necessary to introduce a compensation system that can create attractive conditions for doing business, primarily by small or medium companies. In this context, it is vital to create initiatives for Arctic residents, which will give them tax benefits. This is very important for the development of tourism, the agro-industrial complex and for fisheries.

This matters because taxes and other costs, especially electricity rates, make costs so high that the Arkhangelsk Region is probably one of the most depressed places in the country. The business activity index has been declining here for the past decade. This is why it is important to take measures that will provide tax benefits if not reduce costs.

Kristina Khramtsova: How effective is the interaction between the Arctic regions? What part does the Arkhangelsk Region play in it?

Konstantin Zaykov: The Arkhangelsk Region-based companies operate as subcontractors with the Yamal projects and the ones implemented by Norilsk Nickel, including Novatek’s Center for the Construction of Large-Capacity Marine Facilities in the Murmansk Region.

Politically, in the interregional space, the Arkhangelsk Region and the Murmansk Region have, for a very long time now, competed for resources from the federal center, which was widely covered by the media. The political landscape has undergone major changes in both regions, though, and the federal center has largely facilitated this process, namely, by appointing new governors to these regions, who interacted quite effectively back when they worked in the Government.

The research and educational center Russian Arctic: Innovative Materials, Technology and Research Methods, which received support last year as a major interregional project is a good example of consensus in interregional cooperation. The new governor of the Arkhangelsk Region and the new leaders in the Murmansk Region and the Nenets Autonomous Area were largely instrumental in reaching an agreement on the implementation of this project, which helped the Western Arctic get ahead in an important competition with other Russian Arctic regions.

We won not only because of our robust scientific capacity, but also because, for the first time in ten years, the regions managed to reach a political agreement which is crucial.

So, many more opportunities are now available at the political level when there’s a need to come to an agreement or to reach a consensus when discussing all kinds of initiatives. This inspires optimism, because many projects can only be implemented when there’s close interregional integration.

Recent initiatives demonstrate that we are not moving in opposite directions, but toward each other. Again, in many regards, the desire to control competition led to including chapters about regional development in the Russian Arctic Strategy at the federal level. This was done in order to avoid the regions prioritizing their own interests, so that each one has its own area of ​​responsibility and to remove the high level of competition and mutual mistrust.

Kristina Khramtsova: What direction is the Arkhangelsk Region’s international cooperation going in? Are there any difficulties?

Konstantin Zaykov: Attracting investors has never stopped being a priority. Unfortunately, the geopolitical situation has in many respects seriously affected the intensity of international contacts. But the Arkhangelsk Region has always been strongly engaged in the activities of the chambers of commerce and industry as well as individual regional institutions. The region is working hard to expand its international cooperation when it comes to implementing various projects, such as those in the field of education and culture, or technology and innovation.

Unfortunately, for obvious reasons, the cooperation has been significantly going down since 2014. Recently, we saw our partners restore their activities at the level of chambers of commerce and industry, which, in many ways, are integral institutions that bring onboard various stakeholders to discuss project initiatives.

This work resumed only after an almost three-year-long pause when, in the fall of 2018 and throughout 2019, a series of largescale meetings with investors from Finland and Norway took place. The interaction covers marine biological resources, green energy projects, waste disposal technology, the forestry industry and the processing of non-conventional lumber products – I’m referring here to the cultivation of wild vegetation and processing needle foliage to produce feed for fish and cattle fodder. There are many interesting projects.

Unfortunately, due to COVID-19, 2020 was quite uneventful for us. We are expecting a delegation from Norway and Finland to visit us this fall in order to resume these initiatives. It is hard to negotiate without personal contacts, and virtual contacts do not always help, because business often requires in-person contacts.

I already said that project activities were put on hold from 2014 to 2018 due to the geopolitical situation, but now we are seeing our foreign partners show renewed interest in these projects.

Speaking of high-tech industrial projects, we are seeing our partners reorienting their focus and showing renewed interest in them, but the pandemic has, of course, come at a cost to us. The Arkhangelsk Region is looking for new partners. Cultural exchanges and the scientific and educational projects are going strong despite the sanctions and COVID-19.

The Kolarctic program is a good example of cross-border cooperation between the European Union and Russia in the Barents Sea Region (northern Finland, Sweden, Norway and northwest Russia). This is the largest available program seeking to introduce best practices and technologies in the Arctic regions. Thanks to the Northern (Arctic) Federal University’s energetic activities, the Arkhangelsk Region is leading in the number of projects that it has won. So in other words, we are strongly involved in innovation-driven research and educational activities.

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