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Driving sustainable economic development in the Barents

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This article originally appeared in The Circle 03.17. Find back issues here.

The Barents Region is a model for sustainable economic development in the North. TERO VAURASTE explains.

THE ARCTIC Business Forum Yearbook is the best assessment of economic activity and future investment potential in the Barents Region. It is published each spring by the Lapland Chamber of Commerce and written with a candid business eye and a twist of stout optimism. It helps us understand the regional economic perspectives and the diversity of business in this huge tract of land, wilderness, towns and communities.

In northern Norway, major cities such as Tromsø, Kirkenes and Hammerfest, are fuelling growth. They are joined by smaller towns searching for their own niche and benefiting from innovation and growth in sec- tors including fishing and aquaculture. Earlier this year High North News reported the number of applications from prospective aquaculture students in Norway has nearly tripled in four years likely due to the potential of sea farming industries garnering interest among young people. The whole Arctic region has much to gain from diligent study, research and innovation in the fishing and aquaculture sectors. And it’s not only fish and shellfish anymore – seaweed cultivation will be a means of providing the world with sustainable, healthy food.

Business has a significant role in the public sector and social well-being in sparsely populated Arctic areas. The Russian mining and smelting company Nornickel is the biggest taxpayer in the Kola Peninsula. It has invested in the improvement of employee living and working conditions. Overcoming past environmental challenges, it has worked to reduce emissions of major air pollutants and is committed to reducing emissions and discharges. Western companies should continue working closely with Russian counterparts to drive economic development into an even more sustainable future in the Murmansk and Arkhangelsk regions. The Belkomur railway connection project, for example, is expected to create up to 6,400 jobs and once operational, more than 40,000 employees will be needed.

In northernmost Sweden, LKAB is striving to become one of the most sustainable mining companies in the world. In 2016 it initiated a project for a carbon dioxide-free steel industry with electricity producer Vattenfall and Swedish steel manufacturer SSAB. Wind power production is gaining ground and expected to become the biggest investment potential in northern Sweden. Svevind is building a massive wind power park with over 1,100 turbines in the Markbygden area near the town of Piteå.

In 2016, tourism in Finnish Lapland set new records with over 2.6 million overnight stays – a 13% increase over the previous year and well above the national average of 3%. Chinese tourists doubled their visits from 2015. The Chinese are not only visiting, they are investing as well. In January 2016, the Chinese renewable energy company Sunshine Kaidi New Energy Group announced plans to construct a second- generation biofuel refinery in Ajos, Kemi – an investment of one billion euros. Kaidi’s sustainable technology produces biofuels using wood-based biomass, such as leftover bark from the forest industry as the main feedstock.

These examples show how development in the Barents Region can be a driver for sustainable economic development throughout the Arctic. But it depends on the boldness and robustness of regional economies, stable regulatory frameworks across borders, and active political dialogue on regional, national and international levels. The Arctic Economic Council will continue supporting and providing forums for this development.

TERO VAURASTE is President and CEO of Arctia Ltd and Chair of the Arctic Economic Council.

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