Connector Between Free Market & State Capitalism

Economic ties with Brazil, Russia, India and China (BRIC) raise questions about international trade management strategy. The governments of BRIC countries use state capitalism to embrace markets. By controlling state-owned companies these countries have a steady grip on national natural resources and specific industries. They also invest in sovereign wealth funds in strategic sectors to protect their own domestic interests. Ian Bremmer states that “the ultimate motive of state capitalism is not economic (maximizing growth) but political (maximizing the state’s power and the leadership’s chances of survival)”. China and Russia are considered as the leaders of state capitalism. Despite greater influences from free-market economies, India and Brazil have powerful state-owned companies that impact national strategies. Ian Bremmer also mentions that “countries that use free market capitalism will need state capitalist governments to depend on their trade and investment”. In response to the global financial crisis of 2008, developing countries have established strategies to reduce their dependence on Western economies. Governments of developing nations are rethinking their priorities and select trading partners carefully. The global economy has entered into a new phase called “guarded globalization”. Companies dealing with state capitalist countries must identify the strategic industries that influence the geopolitical dynamics of the nation. Added value is intended to serve the needs of governments, not of countries. Finland has four priority markets that use state capitalism in economic development. Finnish companies entering these markets need the financial and political support of Finland. The Team Finland network is an important platform to promote Finnish expertise in the BRICs countries. By enhancing the position of Finland on the global supply chain, the Arctic Railway will contribute to the development of Finnish thematic priorities, listed by Team Finland, in state capitalist countries.