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ECONOMICS AND FINANCE

tHE ARCTIC: THE US COMES LATE AGAIN, LOSES TO RUSSIA AGAIN, THREATENS AND BLUFFS AGAIN. HO HUM

3/4/2020

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Our translation of an article from zen.yandex.ru follows, with a foreword and notes [in brackets] by Vince Dhimos.
 
The US will use bluff and bluster to pretend to fight Russia over the Arctic, but it is all a game. The US got in too late, while Russia was busy developing a northern sea route along the Russian coast that will save a significant proportion of the travel distance and hence time that was once needed using the Suez Canal route. Shipping companies will save money and pay handsome profits to the Russians to use the cheaper route. Likewise, the US dallied in its so-called war and terror in Syria while Russia saved Syria from destruction, and the US, to save face, pretended Syria was using chemical weapons and fired Tomahawks that did nothing but make permanent enemies out the the Syrians; Russia, China and Iran will now profit from rebuilding Syria; and the US starved the Iranians and Venezuelans with sanctions as Russia and China bought Venezuelan oil and the US appointed a puppet no one had ever heard of as “interim president.” But the UN didn’t buy into the scheme and Guaido is still pounding the pavement. The US could have traded with Maduro and made a nice profit off the oil, but the profits now go to Russia and China even as US shale drillers, who miscalculated, keep going bust; It could have gotten in on the lucrative oil trade with Iran but it chose to be enemies and China and Russia are the winners there as well while Iraq tries to free itself of the monkey on its back. All US losses are clearly Washington's own fault but it will keep whining that someone else ate its lunch and will keep threatening and bluffing and pretending to be a tough guy until the Fed’s printing presses grind to a halt.
 
What did the United States forget in the Arctic?
 
January 28
 
Recently, the United States has sharply increased interest in the Arctic territories, as confirmed by the "Arctic Doctrine" recently submitted by the US Department of Defence. [This is mostly just another of the Pentagon’s empty statements aimed at justifying its existence. It will do nothing meaningful in the Arctic].  It is aimed not only at expanding Washington’s influence, but also at creating conditions for weakening Russia's geopolitical role in the Arctic. Given the intentions of the Americans, it can be assumed that in the coming years the Arctic will become the scene of international confrontation.
 
What makes this region so attractive? At present, taking into account changes in climatic conditions in the Arctic due to global warming and melting glaciers, the Northern Sea Route (hereinafter NSR) - the shortest sea route between Europe and East Asia - is becoming more accessible to development. This route skirts the Russian coast, and there is a high probability that in a couple of years Russia will take possession of the new international artery - an excellent alternative to the Suez Canal, through which about 10% of all world shipping is currently carried out.
 
Moreover, the Arctic is a region where a huge amount of gas and oil reserves, as well as minerals is concentrated. It produces 25% of global gas and a tenth of global oil. In addition, some believe that it is the Russian Arctic that contains almost all reserves of Arctic gas and up to 80% of the oil reserves of the Far North, which prompts Russia to conduct a more detailed study of the region.
 
And what, in turn, do the United States have in the Arctic? Only the state of Alaska, which is entirely dependent on oil and gas production (whose reserves are not high) and which has been experiencing budget deficits in recent years amid falling oil prices, giving the state one of the lowest GDP levels in the country. Hence the sharp decline in oil companies’ interest in the US Arctic shelf.
 
The prospects for the development of the NSR and the presence of an enormous amount of useful resources concentrated in the Russian Arctic possessions are not available to Washington. For these reasons, the former US Navy Secretary Richard W. Spencer last year decided to build up US military power in the Arctic by creating new naval bases in the Bering Sea region and expanding the US military presence in Alaska. Now the Pentagon is developing a strategy of "internationalization" of the Arctic space and simultaneously trying to concentrate a large number of troops and armaments in the Arctic region. In particular, the United States is trying to get Russia to allow American warships to sail along the NSR, or in other words, along the Russian coast.
 
In addition, the US is actively attracting its NATO allies to the "Arctic" problem, using the territories of Canada, Norway and Denmark to strengthen its military presence in the North. Moreover, in an attempt to prevent Russia from appropriating the Arctic, Washington is setting up various obstacles. For example, concerns about the environmental situation in the northern seas are used as preventive measures: Russia's actions in developing them allegedly pose a source of environmental risks for Northern Europe. The desire of the United States and its allies to stop Russia in the Arctic is evidenced by the requirement of the Norwegian Foreign Minister to immediately check the Russian Northern Sea Route for compliance with European environmental standards.
 
Russia is not afraid of the already provocative tactics of the West, because the Russian Federation’s desire for environmental safety in the Arctic is confirmed by undeniable facts. For example, the Russian large-capacity tanker Prospect Koroleva (from Sovcomflot) was the first in the world to traverse the entire NSR using environmentally friendly fuel, ie, liquefied gas. In total, this company has six such vessels, while continuing to improve and replenish their fleet. As part of its concern for the region’s ecology, Russia also plans to completely abandon “dirty fuel” and will use nuclear fuel in its fleet. According to the president of the United Shipbuilding Corporation JSC Alexei Rakhmanov, “since 2020, the International Maritime Organization has reduced the permissible sulphur content in marine fuel from 3.5 to 0.5 percent. Demand for ships with power plants using liquefied natural gas (hereinafter LNG) will increase. But there is another alternative, ie, nuclear fuel vessels which have zero emissions. This is especially true, for example, of the Northern Sea Route. ”
 
Another reason the United States can’t oust Russia from the Arctic region is the fact that we have allies with whom Washington hasn’t got the warmest relations. These include Iceland, which is closely monitoring the development of the NSR project and is considering the possibility of building an international port there for large vessels. The South Korean authorities have also expressed a desire to cooperate with Russia on the development of the Northern Sea Route. At the Korean shipyards, 15 icebreaker tankers are currently being built to transport LNG along the Arctic route. Another Russian trade and economic partner, China, is extremely interested in importing Russian LNG and is investing heavily in the construction and development of oil and gas infrastructure in the Russian Far North. [And this at a time when the US is desperately trying to sell its expensive LNG to China].
 
Russia has an iron grip on the Arctic, continuing the development of infrastructure, including military, in the region (recall the unique military base “Arctic Shamrock”). Nevertheless, the US Armed Forces are already developing hypersonic weapons of destruction, which the Americans can further use for forcible seizure of Arctic territories. Therefore, in order to strengthen Russian positions in the Arctic, the Russian Defense Ministry decided to deploy ten Rezonans-N radar systems in northern Russia capable of detecting hypersonic targets. At present, two Rezonans radar systems are already on combat duty in the Russian Arctic; the third radar station on the Novaya Zemlya archipelago is prepared to enter service. After all ten stations are located in the Arctic zone, the northeastern-missile hazardous area will be completely covered by hypersonic hunters.
 
Whatever methods the US uses to expand its influence in the Arctic, whether it be military intervention or the manipulation of international law, they are unlikely to succeed in this area The Arctic is an object of long-standing interest in Russia; Russians have been developing this region since the beginning of the 11th century. This is one of the most unexplored lands, with a potential that in the future can give serious impetus to the economic development of our country. Therefore, Russia will continue to increase the defence capability of its Arctic territories in order to protect them from encroachment by others.
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