Putin Restricts Foreign Shipping on Northern Sea Route to Boost Russian Shipbuilding Industry

Paul Goble

            Staunton, June 5 – A week ago, Vladimir Putin signed into law which will give priority to Russian-made ships and require that all vessels operating there under the Russian flag must have been built in yards located in Russia, a protectionist measure designed to boost domestic shipbuilding and force other countries to locate yards in Russia, Yevgeny Fedorov says.

            In Voyennoye obozreniye, the Moscow security affairs analyst says the new amendments to Russian law on shipping will in fact prohibit the use of ships manufactured abroad in the future but will respect those constructed for Russian firms and delivered before the date on which the Kremlin leader signed the law (topwar.ru/183674-arktike-rossijskie-suda-protekcionizm-zdorovogo-gosudarstva.html).

            In the short term, Fedorov says, this measure may reduce the expansion of trade via the Northern Sea Route; but it will have the benefit of blocking Western use of sanctions against trade there as those sanctions cannot touch Russian ships under Russian flag. In the longer term, it will help Russia to rebuild its shipping industry.

            For that benefit to accrue, the analyst says, Moscow is going to have to invest in its own shipyards and provide financial arrangements so that Russian shipping companies will use them instead of as now, relying on less expensive foreign manufacturers; and it is going to have to put pressure on foreign yards to open branches in Russia to be able to pass muster with Moscow.

            That is what the Russian government earlier did with automobile manufacturers, and its actions there can be a model. Moscow forced Mercedes Benz to open a plant inside the Russian Federation so as to be able to profit from the Russian market. “Why can’t the yards of Hyundai, Daewoo and Samsung not repeat something similar?”

            What this means is that the Kremlin, while promoting cooperation among Arctic countries now that it is in the chair of the Arctic Council, is taking action at home that will undermine any cooperation unless it is under Russian control.