Sunday, 22 February 2009

Our Friends In The North

To date, our view of the recession has been dominated by its economic impact. It is also changing the shape of global geopolitics and we need to be mindful of this. One area in which there could be profound geopolitical realignment is in the Arctic. The Arctic is an area which doesn’t normally attract a great deal of attention, but which has an enormous potential to dominate geopolitics over the next decade.

We are probably all aware that the Arctic ice cap is melting, at an increasingly accelerating rate. By 2020 the degradation of the ice cap is likely to be sufficient for the Arctic to be open to sea traffic for most of the year. There are two key shipping routes. Heading north through the Bering Sea, if you turn left across the northern coast of Russia, you would be following the Northern Route between East Asia and Europe. The Northern Route should reduce the shipping time between Japan, China, and Korea to Europe by about three weeks. Had you turned right at the Bering Sea and followed the northern coast of Canada, you would have followed the North Western Route between East Asia and the East Coast of the US. The North Western Route is likely to reduce the shipping time between Japan, China, and Korea to the East Coast of the US by about three weeks.

Two key advantages of these northerly shipping routes is that they by-pass the pirate infested waters of South East Asia and East Africa, and they also diminish the importance of the strategic bottlenecks of the Suez Canal and the Panama Canal. In terms of operation, owing to a thinner ice sheet, the Northern Route is likely to be open appreciably sooner than the North Western Route.

As the ice recedes, the energy and mineral deposits of the Arctic will become more open to extraction. The present economic recession has lessened the imperative of extracting these deposits but, as the global economy moves into recovery over the next decade, the issue of mineral rights is likely to dominate the agenda again. The problem is that there are no settled international borders to the North Pole. The issue is further complicated by the Lomonosov Ridge, to which Russia claims ownership.

At present, there are six nations with an interest in the Arctic. We like to measure the weight of this interest in terms of ‘Degrees of Influence’, which are determined by the ‘slice’ of the Arctic controlled by them. The six nations, and their degrees of influence, are: Russia (160°), Canada (85°), US (30°), Greenland (35°), Norway (35°), and Iceland (15°). This pattern is changing due to the current financial crisis.

The viability of Iceland as an independent sovereign nation has been called into question after the collapse of the Icelandic banking system. Already Russia has provided a bailout of €4bn. It is likely that these funds have strings attached, possibly in terms of Arctic mineral rights and possibly in terms of the use of former NATO airbases (see report). However, the Russian funding is unlikely to be sufficient. A more permanent solution is likely to be EU membership for Iceland, which is currently being fast tracked (see report). This rather changes the complexion of things.

One of the interesting consequences of the current financial crisis is the potential it has for strengthening the Federalist case in Europe. The direction is towards a tighter and more co-ordinated foreign policy for Europe, with a tightening of the institutional framework to give it substance. As the recession grips, Greenland and Norway are reviewing the exact nature of their independent foreign policies. If this trend were to gain hold, then, by 2020, the complexion of the Arctic could well change to Russia (160°), Canada (85°), EU (85°), and US (30°) in terms of degrees of influence.

We are not suggesting that this will happen. What we are suggesting is that the scenarios regarding the Arctic, which rely upon six nations as the basis for the scenarios, might need to be reviewed for the possibility of consolidation of the European interest in the Arctic. This consolidation would be the direct consequence of the recession.

© The European Futures Observatory 2009


John said...

This is a great piece of analysis and opens up new questions with long term implications. Well done. Open seas in the Arctic are absolutely big news. Well done.

Stephen Aguilar-Millan said...

Dear John,
Thanks for your comment. The key to open seas is who owns (and controls) the Lomonosov Ridge (which goes from about 80'N 150'E, over the North Pole to about 85'N 60'W).
Russia claims to own it as part of the Russian continental shelf. It also has the means to control it by outnumbering US Naval assets by about 17:1 (nobody else really has a naval presence).
There is scope here for great conflict in the Arctic Ocean as its settlement becomes resolved.
Best wishes,