The Specifics of Arctic Regional Policy: A Case of Russian Karelia


The Republic of Karelia spans almost 11% of the Northwestern Russia's land area, covering 180,520 square kilometers. In geo-economic and cultural terms, it falls within the ambit known as the European North of Russia. Notably, about 38% of the republic's northern territories belong to the Arctic zone of the Russian Federation.

A primary feature is that, unlike other Arctic regions, Karelia, along with the Murmansk Oblast, is a bordering region with the longest border adjacent to a European Union and NATO member country – Finland. The Russian-Finnish neighborhood, mutually beneficial economic cooperation in the 1990s, and rich cultural heritage laid the foundation for the establishment of the Euroregion "Karelia" in 2000. This marked the inception of the first Euroregion on the overland border between the EU and Russia, encompassing the Republic of Karelia and three provinces in Finland (Kainuu, Northern Karelia, and Northern Ostrobothnia).

Over the past 30 years (up until February 2022), Karelia has executed more than 300 joint projects in the areas of small and medium-sized enterprises, environmental protection, cross-border customs infrastructure development, telecommunications, agriculture, healthcare, education, and culture within the framework of cross-border cooperation. Thousands of Russians and Finns residing in contiguous territories have been directly or indirectly involved in collaborative projects across the border.

Karelia has also actively participated in the cross-border cooperation format of the Barents/Euro-Arctic Council (BEAC), contributing to the maintenance of peace and stability in the North, sustainable socio-economic development, environmental protection, strengthening cultural-humanitarian ties, and fostering contacts among people, including representatives of indigenous communities.

In this cross-border context, a unique atmosphere of international trust has been successfully cultivated among authorities at all levels, businesses, cultural figures, scientists, educators, and the general public.

It seemed that this atmosphere would endure for a long time. However, the Russo-Finnish good neighborliness could not withstand the challenges and threats posed by the sharply deteriorating relations between the West and Russia in February 2022. From March 2022, Russia's involvement in the BEAC was practically paralyzed. Finland's presidency did not confirm readiness to transfer leadership to Russia, leading the Russian Ministry of Foreign Affairs to announce Russia's withdrawal from the cooperation format in September 2023.

It is noteworthy, though, that no procedures for discontinuing the Euroregion format have been initiated by the the EU or Finland. This fact provides ample grounds to believe that this instrument of international interaction, having proven itself in practice, might still be in demand in the future. Karelia remains and continues to be a part of Europe, suggesting that a return to amicable relations is entirely plausible.

The second feature of the Republic's international relations is linked to the presence of Finno-Ugric peoples—Karelians, Veps, and Finns—in the region. This factor has led to the extensive development of people-to-people diplomacy involving collaborations between civic organizations, twinned cities and municipalities, and associations of indigenous peoples not only on both sides of the border but also within the Finno-Ugric world. In Karelia, intercultural dialogue with countries where Finno-Ugric peoples reside, in addition to Finland, has been established with Hungary, Estonia, Sweden, and Norway. This has created a channel for cultural exchange and, in the scientific community, facilitated the transfer of educational technologies and the development of academic mobility. Currently, of these countries, only Hungary has not discontinued any projects in the educational and scientific sphere.

"Evolution of International Activities in Karelia: Embracing New Horizons"

Speaking of changes in international relations after February 2022, it is noteworthy that in the Republic, relevant government agencies, scientific and educational institutions, cultural establishments, and the business community are actively seeking new foreign partners. An exemplar of such efforts is the establishment of close ties with the People's Republic of China.

The People's Republic of China: In 2017, agreements on trade, economic, scientific-technical, socio-cultural, and humanitarian cooperation were signed between the Government of the Republic of Karelia and the People's Government of Fujian Province. Cooperation was also established between Petrozavodsk State University and two Chinese universities - Fuzhou University and Fujian Agriculture and Forestry University. As a result, the region's trade turnover with China has substantially increased over the past five years, making China one of Karelia's top three trading partners. On June 28, 2022, a Memorandum of Understanding on creating a Silk Road partnership was signed between the Government of the Republic of Karelia and the People's Government of Fujian Province, serving as an additional driver for the expansion of bilateral trade and economic cooperation.

Another outcome of collaboration with China is the construction of the first industrial park in Russia for stone processing, the "Southern Industrial Zone," located in the Republic of Karelia.

China is now one of the region's major trading partners. In 2022, the volume of exports from Karelia to China tripled compared to the previous year. As of the end of the third quarter of 2023, the trend of increasing external trade volumes has continued, with Karelia's goods exports to China growing by 15%.*

If we talk about the transformation of Karelia's international activities in recent years, the efforts have been primarily directed towards Southeast Asia and the Middle East. As a result, the region is already witnessing the implementation of projects involving Turkey and Iran.

Turkey: In September 2022, during the visit of a Turkish business delegation (led by the "Görev" holding) to Karelia, the Government of the Republic of Karelia signed a comprehensive agreement on cooperation covering trade, economic, investment, and tourism sectors. Additionally, an Agreement of Intent for the implementation of the investment project "Development of a Logistics Center and Warehouse in the Republic of Karelia" was signed between the Ministry of Economic Development and Industry of the Republic of Karelia and the "Ganda" group of companies (Turkish Republic). By the end of the first nine months of 2022, there was a significant increase in Karelia's exports to Turkey, constituting 17% of the region's foreign trade turnover.*

Iran: In late May and early June 2022, a business mission comprising Karelian enterprises visited the Islamic Republic of Iran. During the visit, agreements were reached on the export of wood industry products from the Republic. Another area of collaboration with Iranian counterparts involves the supply of feed for aquaculture to Karelia. A Memorandum of Cooperation was signed between the Karelian Union of Trout Farmers and the Iranian Union of Marine Culture Producers and Suppliers. With Karelia cultivating approximately 70% of all Russian trout, the refusal of Western suppliers to provide feed to the Russian market posed a significant challenge for the republic.

A Memorandum of Understanding was signed between the Association of Stone Processing Manufacturing Organizations of Karelia and the Association of Stone Processing Industry of Iran regarding the supply of Iranian stone to Karelia. The joint implementation of a project to establish an exhibition hall ("showroom") to showcase samples of Iranian stone products in Karelia is also envisaged.

Looking at prospective directions, efforts are underway to establish trade and scientific connections with India, Vietnam, Bahrain, and Saudi Arabia. "Roadmaps" for collaboration with their foreign affairs departments are currently under development.

One year after losing traditional external partners in Europe, Karelia has exhibited several trends in expanding and establishing new international relations in Southeast Asia and the Middle East.

Firstly, the emphasis in the current stage is primarily on economic cooperation, given the region's export-oriented economy. By the end of the first nine months of 2022, Karelia's product exports reached 97 countries, showing a 62% increase compared to the same period in 2021. Despite positive indicators, raw materials and semi-finished products from wood and mineral products continue to be the primary export items. Notably, finished products, such as pulp and paper products, are gaining momentum.*

Secondly, the reorientation of foreign trade activities to new markets has immediately raised concerns about diversifying logistic connections. While the first shipment of pulp and paper products from Karelia to China via the Northern Sea Route encountered no issues in 2022, insufficient development of the international transport corridor "North-South," passing from the White Sea through the White Sea-Baltic Canal, Volga-Baltic Waterway, Volga River, and the Caspian Sea to the north of Iran, raises concerns. Considering the need for rapid exploration of new markets for product placement and organizing logistic routes for exporting goods to the Middle East and Southeast Asia, ensuring transport independence from traditional waterways through the Suez Canal without utilizing the specified international transport corridor could prove challenging.

Thirdly, there is almost a complete loss of traditional, historically established cultural ties between Karelia and the countries of Northern Europe, as well as the absence of joint environmental conservation efforts. In the long term, this could have negative consequences. Resolving issues related to the joint preservation of cultural heritage and protected areas on border territories should not depend on the foreign policy agenda.

And finally, the degradation of international cooperation between the countries of Northern Europe and the European North of Russia inflicts colossal damage on global research on Arctic themes. The inability to exchange data on climatic processes occurring in the Arctic equally harms researchers on both sides of the border. The resumption of dialogue in the field of science is essential now and is possible at any moment, as the Russian academic community has not rejected it.

*Current data available in the public domain only covers this period.

Nikita Kiselev