A New Iron Curtain on the Border with Russia. Whether Return to Good Neighbourhood Possible?


Source: The Times

Valery Shlyamin The Arctic Century Interview

Biographical note:

Valery Shlyamin was born in 1952 in Petrozavodsk.

In 1974, he graduated from Petrozavodsk State University. From 1974 to 1987, he participated in the construction of Kostomuksha mining and processing plant, as well as the city of Kostomuksha, Republic of Karelia, Russia. He served as Minister of Foreign Relations of Karelia (1992-2002) and Trade Representative of Russia in Finland (2003-2017). Since 2017, the Advisor to the Rector of Petrozavodsk State University and Scientific Director of the Institute of Northern European and Arctic Studies. Valery Shlyamin is an expert at the Russian International Affairs Council, Doctor of Economics, author of more than 130 research papers.

Q1: Why did Finland’s political leadership abandon neutrality and good neighbourhood policy towards Russia in 2022? Could you briefly characterize the main achievements of the 74-year Soviet/Russian-Finnish good neighbourhood relations?

Let me remind you that following the defeat in the war of 1941–1944, Finland embarked upon policy of neutrality. The leadership of Suomi [in Finnish, name of the country – ed.] was aware that the USSR could eliminate Finnish independence, and preferred to form good neighbourly relations with its Eastern neighbour. The leadership of the Soviet Union was also interested in good neighbourly relations. On April 6, 1948, the USSR and the Republic of Finland signed the Agreement of Friendship, Cooperation, and Mutual Assistance, which was in force until 1991.

The post-war presidents of Finland, Juho Paasikivi and Urho Kaleva Kekkonen, went down in history as outstanding politicians. The scale of a politician is determined by his ability to rise above personal hostility, above established, often imposed from outside stereotypes of perception of the state, which appeared to be the enemy just yesterday, a strategic vision of the future of his country and the determination to firmly follow the chosen course. The Paasikivi-Kekkonen line is known throughout the world for its course towards independence, neutrality, strengthening Suomi’s international positions on the basis of good neighbourly relations with the USSR and maintaining relations with Western countries.

Largely thanks to trade with the USSR, Finland in a fairly short period of time managed not only to restore its economy, but by the early 1980s to enter the group of the most developed countries in the world, turning from an industrial-agrarian country into one of the world technological leaders in Arctic shipbuilding, timber industry and mechanical engineering for it, as well as ICT. The Soviet Union was Finland's largest trading partner for many years, and Suomi ranked second after Germany among the Western trading partners of the USSR in terms of trade turnover. Finland purchased oil, petroleum products, gas, forest products, and fertilizers from the USSR on favorable terms. Soviet enterprises and organizations supplied and installed technological equipment to Suomi for the metallurgical plant in Raahe, the nuclear power plant in Loviisa, exported 112 electric locomotives for the Finnish railways and many other goods. For our country, economic cooperation with Finland was also beneficial. Since the 1950s and until 1991, Suomi supplied about 2 thousand vessels to the USSR, including 37 icebreakers, 63 research vessels, and unique underwater vehicles Mir-1 and Mir-2. In the fields of shipbuilding, nuclear energy, metallurgy, transport engineering for railways, and the timber industry, unique experience in investment and cooperation has been accumulated, and dozens of effective joint projects have been implemented. The largest Soviet-Finnish project in Karelia and in the ferrous metallurgy of the USSR was the joint construction of the Kostomuksha mining and processing plant and the city of Kostomuksha in 1977-1985.

On January 20, 1992, the Russian Federation and the Republic of Finland signed an Agreement on the fundamentals of relations, as well as intergovernmental agreements on trade, economic development and cooperation in the Murmansk region, the Republic of Karelia, St. Petersburg and the Leningrad region. The contracting parties intended to strengthen good neighborhood policy and develop mutually beneficial cooperation. A small northern European country and a Eurasian power, relying on accumulated traditions, experience, and mutual knowledge of each other, by the end of the 1990s, largely coped with the crisis of national economies, the consequences of the collapse of the USSR, the severance of existing trade ties, the refusal of clearing and transition for trading in freely convertible currencies. Russia was placed the top three largest trading partners of Finland, and Suomi took 14th-15th place in the ranking of Russia's largest trading partners for a quarter of a century. In addition, Finland, having the same railway gauge as Russia, significantly increased the volume of transit traffic to third countries in the 2000s and became one of the largest transport and logistics partners of our country in Eurasia. Back in 2021, according to the Finnish Customs Administration, the volume of transit traffic was about 1.5 million tons.

Tangible successes have been achieved in cross-border cooperation. For example, more than 300 joint projects were implemented in Karelia. In particular, Karelian specialists received access to modern technologies of communication, energy saving, crop production, livestock farming, fisheries, and medical technologies. Finnish companies contributed to the construction of a number of sawmills and wastewater treatment plants, facilities in the Paanajärvi National Park, and international checkpoints. Cross-border cooperation allowed to create jobs in the adjacent territories of Eastern Finland and North-West Russia. Cultural, scientific and educational ties developed fruitfully. Researchers and culture representatives of both countries carefully treated the rich heritage - the world famous Karelian and Finnish epos «Kalevala». One can cite dozens of examples of fruitful cooperation within research community and universities. Residents of neighboring regions could travel freely in the neighboring country, and tourism developed.

Perhaps, the main result of over thirty years of Russia-Finland good neighbourly relations is mutual trust among politicians, entrepreneurs, scientists, educators, and ordinary people.

Q2. Were there any signs in previous years that bilateral relations might deteriorate over time?

When Kostomuksha mining and processing plant was under construction and I was working there, during my business trip to the USSR Trade Mission in Finland in 1978-1982 and my post-graduate studies, I was keen on studying the economy, history, and culture of Finland. In the 1970-1990s, I met hundreds of Finnish people of various backgrounds, including labour, engineers, scientists and cultural workers, entrepreneurs and politicians. Generally, these were people of different views, beliefs, sympathies or antipathies. However, the vast majority of them adhered to pragmatism in Finland’s relations with the Soviet Union, and then with Russia, understanding the benefits of economic interaction and not viewing the USSR and Russia as a threat to Suomi. Although, of course, the Finnish people have not forgotten history. They stayed cautious while followed the confrontation between the great powers, remaining generally committed to the political guidelines of the West; for example, they demonstrated a sharply negative attitude towards the deployment of Soviet military contingent to Afghanistan in December 1979. However, this did not prevent the increase in the volume of trade with the Eastern neighbour, scientific and cultural exchanges, and connections between related cities and communes.

Russians had good relations with many Finnish people, often forming joint families. The collapse of the USSR did not lead to a radical change in the mutual perception of neighbouring countries. Moreover, in the 1990s, millions of Russians, including tens of thousands of residents of Karelia, who previously did not have the opportunity to travel abroad, were able to visit Finland many times. Hundreds of thousands of Finns have visited our country as tourists and business partners.

To be honest, I should note that in Finland at all times there were people who considered Russia an enemy country. In the 1980s - 1990s, and even later, I had the opportunity to repeatedly encounter representatives of nationalist, revanchist organizations, who were distinguished by their unceremoniousness and desire, wherever possible, to loudly declare demands for the return of «lost territories», and did not disdain outright provocations.

From time to time, I met Finnish politicians, officials and diplomats who explicitly or implicitly opposed cooperation between countries. And, of course, the media had a special position. The largest of them, even during the rise of Russian-Finnish relations, often published negative materials about Russia, and sometimes inflated myths about the “Russian threat” and sought to create an image of an unpredictable neighbour. Many years of continuous “brainwashing” of Finns in an anti-Russian manner, especially after 2014, ultimately played a role in the sharp escalation of the political confrontation between the West and Russia with the start of a special military operation in Ukraine.

Q3: In your opinion, what are the consequences of disruption of cross-border economic ties in 2022 for Russia and Finland?

For both Russia and Finland, the disruption of cross-border ties initiated by the United States and the European Union in 2022 has negative social and economic implications. First of all, I would note the forced reduction of thousands of jobs on both sides of the border precisely for this reason, primarily in the border areas. Compared to 2021, in 2023 Russia reduced trade turnover with Finland by 76%. Russian enterprises and the government had to look for new trading partners, build new logistics solutions and redirect export flows from Finland to the countries in the East and South, as well as make greater use of the potential of the domestic market. This work is especially difficult in the Russian regions bordering Finland, including Karelia. Today we can say that the economy is successfully withstanding the Western sanctions pressure.

The decline in gross domestic product (GDP) in Russia amounted to 1.2% in 2022. Russia's GDP in 2023, according to the Federal State Statistics Service, increased by 3.6% and, thus, won back the decline of 2022. According to the authoritative British media The Financial Times, as of July 1, 2023, Finland suffered the most significant damage from Russia’s departure from the European Union - more than 6.5 billion euros. I believe that the real damage to Finnish companies is higher.

The Finnish economy entered recession at the end of 2022. Finland's GDP is expected to contract by 0.2% in 2023. Experts from the country's largest banks predict continued economic stagnation in 2024. It can be stated that the Finnish economy is gradually entering a chain reaction of deterioration in its performance.

The share of public debt in GDP is growing. At the end of 2023, it reached 75% (for comparison in Russia – 20%). This places a serious burden on the budget for its maintenance. The country experienced its sharpest increases in cost of living and consumer price indices in history. This caused a wave of strikes unprecedented in the last quarter century. Finland’s trade unions say that total of about 200 thousand people are expected to participate in protests at the beginning of 2024. Finland has experienced significant production declines in a number of leading industries, most notably manufacturing and construction.

Thus, the data presented indicate that Finland suffered from the sanctions imposed by the West and itself much more than Russia. At the same time, I would like to note that this country has accumulated a solid innovative potential in a number of high-tech sectors of the economy, developments in the field of energy saving continue, and work is vigorously carried out to search for new foreign markets. This will allow it to partially compensate for the loss of the Russian market. However, the relatively high production costs of Finnish enterprises, the stagnation of the German economy - Suomi’s main trade and economic partner, and the associated decrease in mutual trade volumes, a significant reduction in trade turnover with China - all this makes the prospects for the Finnish economy to emerge from the crisis vague.

Q4: By the end of 2023, Finland signed a Defense Cooperation Agreement with the United States. This agreement is standard, because the United States has similar one with Norway, Latvia, Estonia and other countries, which, among other things, allow the deployment of American military bases on the country’s territory. Gradually, a discussion is unfolding in Finnish society about the possible deployment of nuclear weapons on the country’s territory, since the agreement itself does not prohibit this (as is the case with Norway, for example). In your view, what are the real intentions of the American party, and how might Russia react?

I am not a political scientist or a military analyst. However, as for me, the interests of the United States in Northern Europe and the Arctic are obvious. First of all, the Americans are trying to create, where it is possible, tension along the state border of the Russian Federation in order to force us to scatter resources on expensive defensive infrastructure. This desire is especially noticeable in the Baltic and Barents regions. In this regard, Finland’s entry into NATO, carried out as a result of many years of efforts by the United States, opens up for them the possibility of military development of the territory of this country as a promising springboard. In accordance with the mentioned defense agreement, a list of 15 military bases, airfields and ports has been agreed upon, to which the US military will have unhindered access. According to this document, the US military can conduct training, maneuvers, vehicle maintenance, station personnel and conduct construction of facilities.

And, of course, the Americans will use the scientific, economic and military potential of Finland, Sweden, Denmark and Norway in the struggle with Russia for resources and transport and logistics routes in the Arctic. Moscow adequately assesses the growing conflict potential in the Arctic and takes appropriate measures to protect national security. As you know, in January 2023, the leadership of our state decided to recreate the Leningrad Military District and form an army corps in Karelia.

Q5: On February 11, the second round of presidential elections took place in Finland. In this regard, how could you comment on the possible scenario for the development of relations between Russia and Finland for the foreseeable future?

The world is undergoing tectonic changes to the existing world order. The United States, NATO, and the European Union are alarmed by the steady growth of the political and economic influence of China and Russia in the East and South. It must be said that against the backdrop of the threat of the United States losing its role as a dominant state in the world economy, it managed, as never before, to consolidate Western countries under its auspices and to make the European Union economically and politically dependent. The political elites of Finland and Sweden in 2022 found themselves in a situation where they had no choice. Within tough foreign policy influence from Washington and Brussels, rabid Russophobia unleashed by the US-controlled media, almost all parties represented in the parliaments of these countries expressed their readiness to support accession to NATO, increase defense spending and take measures to deepen military-technical cooperation with the United States directed against Russia. I will tell you my personal view: there is no place for cogitative people who disagree with Finland and Sweden’s renunciation of neutrality and joining NATO in the modern political elite of these countries.

When I was a trade representative of Russia, I had the opportunity to meet with the elected President of Finland, Alexander Stubb in 2011–2013. At that time, he was Minister for European Affairs and Foreign Trade and co-chairman of the Russian-Finnish intergovernmental commission on economic cooperation. At that time, this politician took a constructive position and positively assessed the prospects for cooperation with Russia. At the same time, he is a long-time supporter of Finland joining NATO and establishing close ties with the United States.

The «Safe Finland» section of his election program provides explanation of idealism and realism in Finland's foreign policy. Idealism, according to A. Stubb, is that Finns believe in the power of cooperation, interdependence, interaction and trade. «...Economic and political cooperation reduces the likelihood of war». It is difficult to disagree with this thesis. It would seem that it gives hope for the resumption of dialogue.

On the other hand, Stubb says that realism is «..that we (in Finland) have 900,000 militarily trained people, a deployed and motivated reserve of 280,000 people, which shall be subject to mobilization in the event of war». He also stated in his election program: «The guarantee of our external security is three safety mechanisms. The first is reliable and strong defense as part of the overall defense of the Alliance. The second is Finland's membership in the EU and NATO. The third is the Defense Cooperation Agreement with the United States «».

At a presidential debate in November 2023, he said: «We must assume that Europe is, roughly speaking, divided into two parts. A new iron curtain has fallen, both economic and political. On the one hand there are Russia and Belarus, on the other there are about 45 European countries». It is worth mentioning that the initiator of the new unprecedented iron curtain on the Finland-Russian border was the Finnish party.

On the long-term experience of interaction with Finnish politicians and experts, business representatives, I can conclude that most of them, at least, doubt the «Russian threat». The Finnish political elite must justify its abandonment of neutrality and integration into the US and EU policies to deter Russia by instilling myths about «aggressive Russia» threatening to occupy Ukraine and then other bordering European states. I agree with experts who believe that the renunciation of neutrality, joining NATO, the willingness to provide the country’s territory for military and technical development by the United States, and the «Iron Curtain» have created a serious risk for Finland in maintaining its security.

Apparently, in the near future we can hardly expect signals about the readiness of the Finnish political leadership to resume trade, economic, cultural and scientific ties, even against the backdrop of economic stagnation that has begun in Suomi and the threat of a decline in the achieved standard of living of people. At the same time, I believe that Russia could take measures to dispel hostile myths and fakes, to inform the Finnish public about the real intentions and affairs of our state, the achievements of Russian scientists, cultural representatives, sportsmen, and the preservation and development of cross-border people-to-people contacts. I believe that sooner or later the «Iron Curtain» will fall.

Q6: I would propose to touch upon the Arctic agenda. The Finnish Arctic Strategy 2021 is currently in force, which defines the goals of Arctic policy until 2030. What did the Finnish government aim at the moment of developing the Strategy, and how might policy priorities change in connection with the country’s accession to NATO and the strengthening of bilateral cooperation with the United States?

There are number of reasons why Finland is interested in the development and cooperation in the Arctic. Despite the fact that the country does not have access to the Arctic Ocean, it has unique experience in Arctic shipbuilding, as well as in conducting economic and scientific activities in Arctic conditions. Finnish companies have solid experience in laying submarine cables and developing wireless networks, in the production of wind energy, and in Arctic medicine. Finland has solid experience in the circular economy, which is especially important for adapting to climate change in high latitudes.

Certainly, in 2021 Finland adopted a new Arctic strategy. It contains core activities for 2021–2030:

1) Adaptation to climate change and mitigation of its impacts,

2) Protection of indigenous peoples,

3) Expertise, science and education,

4) Infrastructure development.

Environmental protection is a core priority of the Finnish Arctic strategy. I would like to note that in the field of environmental protection, Russia and Finland have been cooperating for a long time in the field of sustainable development of forestry and conservation of biodiversity in the North-West of Russia and the adjacent territories of Finland. Scientists from Petrozavodsk State University and the Karelian Scientific Center of the Russian Academy of Sciences made a significant contribution to this cooperation. For example, I will name only one implemented joint project that has received international recognition - the Green Belt of Fennoscandia.

No doubt, Finland’s Arctic strategy will have to undergo fundamental changes following Finland’s accession to NATO, the cease of cooperation and contacts with Russia by Northern European countries, the USA and Canada in the Arctic Council, as well as in a bilateral format. In my opinion, environmental protection will remain the main priority, since each country in the Arctic region, in cooperation with partners and/or independently, is forced to find solutions to environmental challenges, in particular to rapid climate change. However, achieving the goals of the Finland’s Arctic strategy is hardly possible without interaction with Russia. Finland's capabilities for expertise, scientific development and infrastructure development are sharply hampered. We should expect increased activity in cooperation with the United States and Canada in Arctic shipbuilding for economic, scientific, and military purposes. In addition, within the US-Finnish defense cooperation agreement, Finland will be forced to participate in the creation of military ground infrastructure in the Arctic region.

Q7: The disruption of Russia-Finland scientific and cultural ties is painfully perceived by the scientific and expert community of both countries. Could you assess the prospects for restoration of these ties?

Unfortunately, universities and research centers in Western countries, Finland in particular, are forced to cut ties with Russian counterparts in 2022 and are under the control of the authorities. We have to reckon with the fact that the unprecedented campaign of Russophobia and the attempted information blockade of Russia do not allow our colleagues in the West to form an adequate idea of what is really happening in Ukraine, of scientific and cultural events and achievements in Russia. At the same time, individual scientists do not lose touch with their Russian colleagues.

The West is aimed at a long-term disruption of relations with us. However, I continue to feel optimistic and believe that common sense will prevail. The academia and cultural workers, who perceive political, economic and environmental challenges and threats to the world more acutely than others, are able to break the ice of mistrust and hostility over time.

Interviewed by Mikhail Shabanov