Increase in area of land classed as Russian arctic – with much less budget funding

At end-June, the northern and northeastern parts of the Karelian Autonomous Republic were recognized, after a long effort by local officials, as a part of the Russian arctic region through a presidential decree. The law defining the area of the arctic region and its status is yet to be approved, however.

An economic development programme until 2020 for the arctic region was laid out already in spring 2014, but many of the programme's specifics as well as its funding from the federal budget are still open. At the start of 2017, it was planned to allocate just over 200 billion rubles (3 billion euros) in budget funds for the programme, but the most recent media reports suggest that that amount has fallen to around 12 billion rubles. Rosstat reports that the Russian arctic is home to about 2.4 million people and generated about 5 % of Russian GDP in 2015.

About 10 % of Russian investment last year went to arctic areas. Most of that went to the massive LNG project on the Yamal peninsula, the first phase of which should be completed this year. The role of public investment is small in the most energy-rich arctic regions, but e.g. in the Murmansk region and Chukotka Autonomous Okrug over 40 % of investment was financed from budget funds last year.