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Yelena Stoudneva

Observer, International Affairs monthly

The smallest among the Arctic countries, Iceland until recently was using the “little by little” principle in structuring its policies in the Arctic. That was the case up until 2009 when the country took the chair in the Nordic Council of Ministers. Iceland’s priorities then went to regional international cooperation, environmental protection of northern territories and seas, and support of scientific research in the Arctic.

The smallest among the Arctic countries, Iceland until recently was using the “little by little” principle in structuring its policies in the Arctic. That was the case up until 2009 when the country took the chair in the Nordic Council of Ministers. Iceland’s priorities then went to regional international cooperation, environmental protection of northern territories and seas, and support of scientific research in the Arctic.

It was in 2009 that Iceland turned to revising its strategic line vis-à-vis the Arctic. It is not ruled out that Icelandic leaders viewed this as a possibility to capitalize on the Arctic theme. This is largely associated with the benefits of partnership with the European Union (Iceland applied for EU membership in 2009) and China that came up with lucrative proposals for cooperation. Furthermore, Iceland looks to new prospects that should open in shipping on northern seas, which is expected to expand any day following global warming in the Arctic. This should instantly increase Iceland’s stakes in the area as a country possessing a well developed Arctic infrastructure. In this connection, the potential of cooperation between Iceland and Russia is also a matter of considerable interest.

Iceland’s Arctic Strategy: the Goals and Mechanisms of Implementation

It was in 2009 that Iceland turned to revising its strategic line vis-à-vis the Arctic. It is not ruled out that Icelandic leaders viewed this as a possibility to capitalize on the Arctic theme.

Iceland’s Arctic strategy fits in the overall context of European strategy to coordinate Arctic policies. This is due to scarcity of resources if a country is to carry out single-handed the expensive projects of research and development in the Arctic. The general principles of this strategy are set out in what is known as the Stoltenberg Report prepared in 2008 on commission by Scandinavian governments.

One of the points in the report is that Iceland, even though its positions in the Arctic are far from leading, is nevertheless active in laying claim to the Arctic continental shelf. The country has announced its intention to participate in compiling maps of vulnerable areas in the Arctic and North Atlantic. It will thus not only be well-informed on the developments but will also participate in planning action in emergency situations in the maritime zones where intensive shipping is expected, with rivalry for natural resources on top of it. On the whole, however, as mentioned above, Iceland moves within the framework of the European Union’s overall Arctic strategy with its key propositions including protection of the Arctic and its population, and measures to ensure stable use of resources and improve multilateral management of the region.

Photo: Flickr / Lene Espersen
Arctic Council Ministerial Meeting Nuuk 2011

At the 7th ministerial meeting of the Arctic Council in Nuuk, Greenland, in 2011, the first legally binding pan-Arctic document was signed, the Cooperation Agreement on Marine Search and Rescue in the Arctic. Its signatories, Denmark, Iceland, Canada, Norway, Russia, the U.S.A., Finland and Sweden, thus assumed joint responsibility for the situation in the Arctic. The document is comprehensive, covering as it does communications, transport, emergency and rescue equipment, etc. Russia signed this agreement as practical realization of point 7b, chapter III “Fundamentals of the State Policy of the Russian Federation in the Arctic for the Period up to 2020 and Thereafter”, that concerns creation in the Arctic of a “centralized regional system for search and rescue, and for prevention of technogenic calamities and clearing the consequences, including coordination of the rescue force operations”. Iceland, in turn, is extremely interested in development of collaboration in the area of search and rescue of ships and people in the Arctic.

Collaboration in the Arctic region with Iceland’s participation develops under bilateral, sub-regional and regional agreements and within the framework of sub-regional and regional organizations. The latter include the North-Eastern Atlantic Fishery Commission (NEAFC), Northern Council for Atlantic Salmon Conservation Organization (NASCO), Arctic Council, Council for the Barents and Euro-Arctic Region (CBEAR), International Council for Exploration of Seas (ICES), and others.

Priorities of Russia-Iceland Relations in the Arctic

The priority area of cooperation between Russia and Iceland is energy. Iceland’s technological achievements in geothermal energy may be used in Russia to tackle the tasks in reducing the GDP energy intensity and increasing the renewable share in the structure of energy supply.

A Russian-Icelandic inter-governmental agreement on cooperation in geothermal energy development was signed on 25 October 2011 in the course of the 6th International Energy Week in Moscow. Let us recall that geothermal power generation features as one of the essential elements in Russia’s federal program Energy Strategy for the Period till 2030.

Now, what is Russia’s interest in Iceland’s experience?

The point is that Iceland’s landscape is unique in its volcanic nature. With its sources of geothermal power, the country possesses an immense potential of hydro energy. Hot water from geothermal springs is used to heat homes, greenhouses, and even some of open-air playgrounds (like those at stadiums). Homes with geothermal heating make about 90% of Iceland’s housing stock.

Photo:The Presidential Press and Information
Office Dmitry Medvedev met with President
Iceland, Ólafur Ragnar Grímsson, 2010

At a meeting in Moscow with President Dmitri Medvedev on 22 September 2010, President of Iceland Ólafur Grímsson said, “We have always had a great interest in assisting Russia in the exploration of its geothermal resources. We know that Russia possesses large deposits of geothermal energy, and we could help in developing these resources for production of clean energy.” This concerned, in particular, exploitation of geothermal resources in Kamchatka, Far East, and the plan was to build a geothermal station there to produce energy for an aluminum plant.

At a conference of representatives of power industries of several countries and corporations convened in Moscow in early July 2012, an initiative was proposed to establish a research center in the Arctic to explore the prospects of oil and natural gas production in the area. The plan is to locate the center in the north of Norway, at Tromsø or Bodø. And it will cooperate with research institutes in Arctic and sub-Arctic countries.

On Russia’s initiative, a marine rescue center is projected in Tixi, Yakutiya, to coordinate search and rescue operations in the eastern Arctic. An emergency rescue base will be set up right by the center to operate in the event of oil and oil products spills. As Ambassador Anton Vasilyev, Russia’s representative in the Arctic Council, says, these facilities have become essential amid intensified operations in Arctic areas. The oil and gas production started at Shtokman and Yamal fields, and intensive development of infrastructure facilities along the Northern Sea Route, both require prompt response in the event of emergency situations in the conditions of Arctic climate.

Yet another interesting project just about to be launched is laying an optic fiber seafloor cable from Arkhangelsk to Iceland, with a total length of 2,500 km. The plans for the future are to prolong the line to connect Iceland with the U.K. Iceland’s Foreign Minister Össur Skarphéðinsson describes this project as a “revolution in information technologies”. As he put it, “Iceland may become the hub that in the future will connect Russia and the U.K., and later on, the scheme might include, the U.S.A., too”.

From Bilateral Documents to Concrete Plans

Photo: globustur.spb.ru
Russian fishermen in Iceland

The Declaration on Arctic Cooperation that Russia and Iceland signed in November 2011 open up broad vistas for cooperation between the two countries. It reflects the Parties’ interest in using the Northern Sea Route as the shortest transport line to international markets in Europe and Asia. Among the priority areas of cooperation are construction of infrastructure facilities along the Northern Sea Route, further development of shipping operations, scientific research, environmental protection measures and the fight against pollution in the Arctic region, development of hydrocarbon deposits, expansion of information technologies, and interaction within the framework of the Arctic Council, the Council of the Barents Euro-Arctic Region, and the Northern Dimension.

On the initiative of Russia’s Security Council and Foreign Ministry, the international conference titled “Northern Sea Route, Way to Strategic Stability and Equitable Partnership in the Arctic” was convened on 6-11 August 2011. The venue chosen for the forum was a Russian nuclear-powered icebreaker, the Yamal, that cruised along the Northern Sea Route. The conference participants representing Arctic and sub-Arctic states formed a joint position concerning the necessity to protect the environment in the region and to provide for safety in shipment operations along the Route. As Artur Chilingarov, Russia’s special presidential envoy for international cooperation in the Arctic and Antarctic, told the ITAR-TASS agency, “All that has to do with environmental protection is even a greater priority than business. We therefore have to ensure safety of shipping along the Northern Sea Route. … Today, a decision has already been taken that the Ministry for Emergency Situations will build 10 Arctic bases at target points of prompt response.”

The Declaration on Partnership for Modernization signed by Russia and Iceland should be instrumental in realizing the potential for cooperation in the area of search and rescue operations in the Arctic, in supplies of up-to-date equipment for ships and rescue operations, interaction in transport operations and business projects, and in prompt response in the event of emergency situations.

The Agreement on Expansion of Cooperation in Tourism deals with both introduction of a favorable visa regime and the opening of air and sea lines to carry passengers and freights. Furthermore, the Russian-Icelandic business forum that took place in Moscow on 25 October 2011 focused on cooperation in the first place in the sphere of tourism.

Another area of strengthening cooperation is direct contacts between the two countries’ regions. Delegations from St. Petersburg, the Komi Republic and Kaliningrad and Volgograd Regions visited Iceland in 2012 to discuss the prospects of expanding cooperation in the tourist industry, in modernization of housing utilities (introduction of heating systems operating on geothermal resources) and development of small and medium-size businesses.

Prospects of the Two Countries’ Joint Projects

Iceland possesses advanced science-intensive technologies that could be of practical interest to Russia.

In 2002, Iceland placed 14th in the world in the output of its fishing industry. Fishery and all that is associated with this industry (conservation of populations, research projects in Iceland’s economic zone, etc.) serve as a significant stimulating factor in the development of trade and economic relations between the two countries. As Foreign Minister Össur Skarphéðinsson said at a press conference at Russia’s Foreign Ministry, “Iceland survives only owing to the cleanness of the seas around it.”. Russian specialists are interested in Iceland’s experience in the fishing industry, in particular in experimental operations with various fishing devices, employment of new technologies in fish processing, development of aquaculture, ship building and repairs, and training fishery specialists.

The Arctic theme is one of the main in the activities Russian-Icelandic inter-departmental commissions for trade and economic cooperation and interaction in the fishing industry.

On an agreement between the administration of Murmansk, Russia, and the Raftakan Co., the world’s top in the output of dried fish products, a Russian-Icelandic factory for production of dried codfish heads was commissioned in Murmansk in May 2012. The Icelandic company invested 4 million euros in the factory construction, pays taxes in Murmansk, and plans to process 50 thousand tons of fish production waste and turn out 300 thousand tons of product annually.

Furthermore, there is also a promising project for air tourism. There has been no direct airline between Russia and Iceland up until now, which significantly increases the costs of travel between them. As an Icelandair Co. spokesman reported, direct Reykjavik - Moscow airline is scheduled for opening in 2012. And regular air flights between Iceland’s capital and St. Petersburg will begin in 2013. As a matter of fact, Iceland intends to make Reykjavik an airline transition hub for flights to America.

Photo: www.carmk.net
Icelandic company Arctic Trucks
produces arctic trucks modifications

Iceland possesses advanced science-intensive technologies that could be of practical interest to Russia. These cover a wide range, from research into application of hydrogen as alternative fuel and aluminum applications, to biotechnologies. There are promising business contacts in pharmaceutics, bioengineering, and even tuning cross-country cars to suit the Arctic terrain and climate.

Iceland supported Russia’s accession to the WTO. With its many years of experience as a member of the European Free Trade Association (EFTA) Reykjavik responded positively to the plan to sign in late 2012 a free trade agreement between the EFTA member countries and the Customs Union of Russia, Belorussia and Kazakhstan. The positive stance that both countries take with regard to collaboration both bilaterally and in multilateral international formats indicates that there are broad opportunities for the two countries’ cooperation. The Arctic theme, no doubt, imparts additional dynamics to the process of bilateral cooperation between Russia and Iceland.

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