Prime Minister Vanhanen at the conference on the future of the Barents Region

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Ladies and Gentlemen,

Two hundred years ago, the international background to incidents in the Barents Region was provided by a sequence of events initiated by the French Revolution and Napoleonic Wars. It is a sign of the times that today the Finnish Prime Minister begins an examination of the future of the Barents Region against a backdrop of the effects of global climate change.

Large parts of Finland belong to the Arctic, and Finland is an Arctic state. We therefore play our part in caring for the development of the entire Arctic region.

Studies show that the Arctic climate will warm more quickly than the global average. The change in question is a long-term one. In Finland, on the basis of Tornio River ice statistics, we have noted how the northern climate has warmed steadily over the past 300 years. In recent decades, however, warming has accelerated, and most researchers believe that it will accelerate further.

Much interest has been aroused by the thinning and contraction of the Arctic Ocean’s summer ice sheet. The contraction of the sea ice is expected to accelerate so strongly that by the end of the current century the Arctic sea area will be largely ice free in the summer. New forecasts indicate that the Arctic Ocean will already be open in the summer during the next decade.

Growing cargo shipping traffic due to the global economy needs new routes, and the trend caused by climate change is also expected to radically alter the global logistics situation. This may also affect the size of ships, when they no longer need to be designed to pass through the Suez or Panama canals. Such a change would also promote the exploitation of the Arctic Ocean’s substantial energy resources.

Alongside global economic prospects, we must remember that the livelihoods – tourism, reindeer husbandry, fishing, seal hunting, berry picking – of many of the Arctic’s inhabitants, particularly the indigenous peoples, are dependent on natural conditions. Changes in the flora and fauna may be unpredictable. We do not know, for example, how Arctic Ocean fish stocks will be affected. As with energy resources, this is not a minor issue: around 30 per cent of the entire world’s fishing catch is currently obtained from Arctic sea areas.

One significant problem is also the shifting of the permafrost limit by hundreds of kilometres during the present century. Melting will lead to coastal erosion and soil softening of the kind that we have already witnessed in the form of collapsed buildings and roads. In addition, the melting of the permafrost might release methane emissions, which would have an accelerating effect on climate change.

Arctic ecosystems are naturally highly vulnerable. That is why environmental aspects must be taken into account on a fundamental level when examining the outlook for climate change, future logistics, the exploitation of energy resources and any increase in economic activity.

Our knowledge of climate dynamics is still imperfect and forecasts are therefore uncertain. Some research reminds us that there may also be temporary cold periods along the way. Moreover, climate warming will generally increase the incidence of extreme phenomena, such as powerful storms and floods. We must also keep in mind the effects that the melting of the polar ice sheets will have on sea level around the world.

Finland and the European Union are making a big effort to combat global climate change. But we Arctic region countries also have particular responsibilities in this regard. At the same time, we have to take into consideration the fact that most of the pollutants that increase climate warming in the Arctic region – such as carbon dust – come from outside the region. In this respect, all developed and developing countries are significant sources of pollution. That’s why responding to the Arctic challenges is a joint task of the entire international community – a task that the economic crisis does not make any less urgent.

Ladies and Gentlemen,

It has been suggested that a consequence of climate change will be “a race to the North Pole”, or that the Arctic will become like the Wild West of former times. Finland, any more than the other Arctic states, does not see matters in this light. Despite the regional requirements of coastal states, all parties are committed to adhering to the existing ground rules. We consider that the United Nations Convention of the Law of the Sea UNCLOS, environment and fishing treaties, and the International Maritime Organisation IMO form a sufficiently comprehensive multilateral legal regime. We do not consider it necessary nor realistic to create a new Arctic treaty regime. On the other hand, it is clear that the implementation of currently agreed arrangements should be improved. The international community should better utilise those recommendations which, for example, are produced within the framework of the Arctic Council.

Indigenous peoples participate in the activities of both the Arctic Council and the Barents Euro-Arctic Council. The importance of this fact cannot be overemphasised. When decisions relating to the Arctic are made, all of the Arctic states should sit at the same table, and the opinions of Arctic residents – including the indigenous peoples – must be taken into consideration.

In Finland’s view, due to the particular vulnerability of the Arctic environment, all Arctic activities must take into account environmental protection, sustainable development and the requirements of the precautionary principle, as well as the special climatic and population characteristics of the Arctic. Economic activity in accordance with sustainable development increases development and well-being and is therefore important for the Arctic states and the local population, including the indigenous peoples. We in Finland are continuing to work to safeguard the rights of the Sami, also taking into consideration the challenges posed by climate change. The sustainable development of the Arctic land and sea areas is also in the interests of the whole international community.

Ladies and Gentlemen,

Changes in natural conditions influence in many ways industries related to nature, such as reindeer husbandry and tourism. An acceleration of forest growth and the shifting of the tree line northward will improve prospects for the forest industry.

The development factors of the Barents and Arctic regions invite the peoples of these regions, economic operators and states to cooperate in managing risks and utilising opportunities for the benefit of the area’s population. This relates in turn to economic cooperation between Russia and the Nordic countries. Tripartite cooperation is already working, for example, in the mining industry: the Norwegian company Yara is planning to reopen the Sokli phosphate mine in Eastern Lapland. Growth of the oil and gas industry is creating new jobs.

In terms of the Barents Region, it is not insignificant that new routes will become available to shipping. A key element of planning the future of the Barents Region is also understanding the global logistics required by future global economic development, and predicting and directing its effects in a positive way for the Barents Region.

All kinds of economic activity will increase both in the large ports, such as Murmansk, and in oil and gas fields’ onshore support operation areas from northern Norway to Nenetsia. A prerequisite of this, however, is that substantial investments are made in the region’s railways, ports, other logistical systems and in social infrastructure generally. As a Finn, I see that such development would be very important for the business life and employment of northern Finland. The rest of Finland would also benefit, because a lot of expertise in different fields, of a kind that we can offer, is needed to operate in Arctic conditions. I highlight at this stage as an example the vessel Norilsk Nickel, which sails all year round between Murmansk and Dudinka without needing the assistance of an icebreaker.

Even if the snow cover were less than at present, we would still be the northernmost corner of Europe. This requires strengthening the relative competitive advantage of the North Calotte and Barents Region in the coming decades. One winter tourism asset that the North Calotte and Barents Region will possess in future is greater certainty of snow than the rest of Europe. And as the climate in general warms, the climate of this region in summer may also offer conditions for the development of the tourism industry. This may be the key to operating many winter tourism centres all year round.

We are therefore presented with both a challenge and an opportunity. We have time to prepare ourselves. Finland has Arctic expertise in various fields, particularly offshore technology, Arctic construction and infrastructure, Arctic energy and navigation technology, sustainable forest management, and the organisation of northern tourism services. Development of these fields will be supported by national and international research and development cooperation. Supporting Arctic research activity is extremely important, both to support decision-making in accordance with sustainable development and to safeguard companies’ competitiveness. Research knowledge, in other words, will play a key role in terms of adjustment. I also encourage the Universities of Oulu and Rovaniemi to network with other Barents Region universities and to strengthen further their status as experts and specialists in this field of great opportunities.

Furthermore, some challenges require prompt action. Environmental problems in the Barents Region are serious even without climate change. The Kola Peninsula has the world’s largest concentration of nuclear reactors. The dismantlement of decommissioned nuclear submarines and the storage of nuclear material currently under way with last far into the next decade. We also have a responsibility for the safety of the peaceful use of nuclear power in northern Europe.

Via the Northern Dimension, Finland is involved in joint efforts by the EU, Russia, Norway and Iceland as well as the United States and Canada to improve conditions for the environment and communities of the northern regions. The Barents Region area is in many ways the hub of the Northern Dimension.

Ladies and Gentlemen,

As I already mentioned, improving transport and logistics connections is important for the development of the Barents Region. The Northern Axis, which runs through the region and also includes the Barents Link railway connection from Narvik in Norway via Sweden and Finland to Russia, has been under development for a long time. It is important to safeguard development conditions of the northern areas and to create a cross-border logistical cooperation network.

Transport cooperation in the northern areas, such as other sector cooperation, takes place with the positive input of the Barents Euro-Arctic Council and Barents Region Council. They have proved to be very effective implementation channels for regional cooperation and local interests. They identify their own area’s development and cooperation needs and support project activity in different ways.

The role of the Region Council has been characterised as an engine of activity that maintains local expertise, tradition and enthusiasm. The Barents Euro-Arctic Council is an important forum, particularly for regional government authorities, non-governmental organisations and the indigenous peoples of the northern areas.

The chair of the Barents Euro-Arctic Council is currently held by Russia, and the chair of the Barents Region Council by the Northern Ostrobothnia Region. On both of these levels of Barents cooperation, important areas of emphasis are economic, environmental and transport issues. In Barents Region environmental cooperation, the key areas are efforts to promote cleaner production and reduce emissions as well as promoting energy efficiency and renewable forms of energy. Moreover, it is worth remembering the significance of cooperation relating to indigenous peoples in the Barents Region.

Neighbouring-area cooperation between Finland and Russia has served as a model for cross-border EU cooperation with Russia. Neighbouring-area cooperation implemented since 1992 has promoted regional stability as well as financial and social development. Nowadays, neighbouring-area cooperation is used to promote both bilateral and multilateral project activity in neighbouring areas.

The EU’s new European Neighbourhood and Partnership Instrument ENPI will create better conditions for Nordic country operators to implement cross-border projects.

I consider it very positive that Russia and the other participating countries have now formally approved the ENPI CBC programmes. The programmes can be initiated as soon as the funding agreements between the EU Commission and Russia have been signed. As I stated at the beginning of this talk, Finland is a northern, partly Arctic, state to which expertise in Arctic issues and conditions, as well as caring for them, has traditionally come naturally. This fact is also evident in our relationship with the European Union. I can figuratively say that through the membership of Finland and Sweden, the whole of the EU “moved” northward. The EU received a new northern dimension and began to build its own northern policy. This was updated by the EU communication on "The European Union and the Arctic Region", which was published in Brussels a few days ago.

I believe that the EU’s northward expansion will continue. The newly published Commission communication is the first step in the EU’s Arctic policy. The document covers three important themes. They are 1) protecting the Arctic, 2) promoting sustainable use of the Arctic’s natural resources and 3) developing Arctic governance.

Finland through its submissions has influenced the content of the communication and we are mainly of the same opinion in terms of its policy objectives. The communication gives a new emphasis to Arctic issues in the EU’s political agenda.

From Finland’s perspective, the EU’s Arctic communication is a welcome opening from the world’s largest economic power.

Ladies and Gentlemen,

This conference has been arranged as part of the Year 1809 project. Being aware of the great changes that the period brought to the Barents Region, we wished to arrange a future conference. We have also in the past centuries experienced how international development is reflected even in the northernmost areas of Europe. In today’s world of globalisation, the whole of humankind shares the same fate and influences it through joint action. The Barents Region and the entire Arctic area face many challenges but also huge opportunities.

In the global economy, I wish to emphasise in particular two issues in terms of the Arctic:

1. The more attention we pay to state borders and to states as actors, the poorer the economic result we will achieve. Economic power and dynamism arises when companies can seek partners and the most efficient operations across frontiers.

2. We really cannot be satisfied only with using the region’s natural resources. The sale of raw materials yields only marginal profits; we must obtain from them added value and more developed business operations. The second biggest increase in value comes in the final stage, where products and services are involved, not tonnes and metres.

I hope that this conference will contribute to promoting development, and that as a consequence of this our children and grandchildren will say 50, 100 or 200 years from now: Back then, in the early 21st century, they were able through cooperation to combat risks and grasp opportunities so that work, security and wellbeing were built for future generations here in our home districts.