Regional Logistics Hub
By connecting the Baltic and the Barents Sea regions the Arctic Railway will create transnational and transcontinental ramifications. The project involves many stakeholders and stimulates exchanges between different economic areas. The author derives connectivities between seven development strategies in order to identify transport priorities that will drive the development of transport infrastructures in Finland. Because of the geographical nature of the project it is essential to analyze the Baltic and the Barents Sea regions strategy. On the other hand, the Arctic Railway claims to be the quickest connection to the European Arctic which gives importance to Finland’s Strategy for the Arctic Region and the Northern Dimension Strategy.
Team Finland strategy expresses priorities for companies operating on a global level, while Finland Regional Policy presents the recommendations to develop local economies. Finally, the extraction of minerals in Northern Finland requires analyzing the needs for transport of the Mining Industry. A thorough reading of each strategy is done while key sentences are highlighted in the text and sorted into action plans. The identification of themes is based on ocular scanning, repetition of key words and identified patterns. Finally, a cross-case synthesis is made in order to visualize the common priorities of the seven development strategies. As a result, strategic priorities for the development of transport infrastructures in Finland are “integration to new global supply chains”, “improvement of TEN-T”, “development of regional transshipment markets” and “improvement of territorial connectivity”. The study shows that the Northern strategies aim to unify Northern, Central and Southern transshipment markets which meet the transport priorities of Finland. The cross-case-synthesis emphasizes the importance of the Northern strategies in the improvement of the Finnish transport network. The Arctic strategy and the Northern Dimension Partnership on Transport and Logistics (NDPTL) support the work of the Barents Euro-Arctic and Regional Council of Finland by promoting economic and transport initiatives. While the Barents strategy promotes the construction of new transport infrastructures in Northern and Eastern Finland, the Baltic strategy still stimulates economic development and trade exchange in the Southern and Western Finland. Therefore, the Arctic, the NDPTL and the Barents strategies should be combined into one flagship strategy
The Arctic Railway will be of great support in developing territory connectivity within Finland and between regional transshipment markets in the Fennoscandia peninsula, as shown in figure 1. On a domestic level the new transport corridor will remove regional disparities by unifying economic activities between the Barents and the Baltic Sea regions. The Arctic Railway has a strategic location at the crossroads of traditional and new transport infrastructures. Fennoscandian, European, Russian, Asian and North American markets will be accessible regardless of business location in Finland. The project will expand TEN-T to sub-Arctic regions which will better integrate Finland to existing and new global supply chains. The Arctic Railway will improve the reactivity of the Finnish supply network and will optimize the competitiveness of Finland into global value chains. By offering appropriate transport routes to key industries, the new corridor will strengthen the position of Finland as a connector between free-market and state capitalism countries. In an era of regionalism, increasing the flexibility of Finnish transport networks will provide for contingencies by responding to trade reactivity and facing changes in market trends.
Despite their differences free market and state capitalism countries find a common ground in the exchange of strategic competencies. The future of western countries will depend on their abilities to convince state capitalist governments to invest in their economy and set up agreements for trade activities. By identifying thematic industries and strategic markets Team Finland has set up a framework for economic cooperation with state capitalist countries.
Since 1947 international trade has been regulated by multilateral trade agreements and governed by the General Agreement on Tariffs and Trade (GATT). Objectives of the treaty were to reduce tariff barriers between the members of the OECD. At the beginning of the 21st century trade and rules became more complex. Richard Baldwin states that “when it comes to governance, the critical difference between 20th and 21st century is the Trade-Investment-service nexus”. International trade created new demands and shifted from local cluster-based industrial development to global interconnected supply chains. In terms of policy, countries are shifting from tariff barrier towards management of regulatory measures. Regional trade agreements are now more important than multilateral ones. As regional cross-border flows are more intricate, negotiating agreement in the GATT will be too onerous and slow. Ian Bremmer also argued that “we have entered a G-Zero era” which is “a world without leadership” in contradiction with the G-7 and G-20 summits. This phenomenon appeared with the rise of emerging nations such as Brazil, Russia, India and China. Their actions have different motivation than Western countries and rely on state capitalism. The leaders of the BRIC are focused on supplying jobs and higher standards of living to their population and refuse to take more responsibilities in international leadership. The financial crisis of 2008 reinforced state economic management to drive the growth of the BRIC. According to Bremmer, state capitalist countries are not anymore “driven by alliance with superpower or by ambitions to join established power’s club” but have desires to make new rules in the global market place. Besides international political institutions many regional groups of countries have created free trade blocs. Regional trade agreements will define regional powers and institutions in Asia and Latin America in the future. Interaction between these regional champions will lay the foundation for a new global trading order.
The railway line between Rovaniemi and Kirkenes will create a new railway corridor from Helsinki to the Arctic Ocean. This “Finnish Corridor” will develop a zone of contact between the Barents and the Baltic Sea regions and facilitate trans-regionalism beyond neighboring countries. This new corridor crossing Finland from north to south will empower the country to improve trade reactivity by adapting faster to changes in market trends and in the supply chain. By connecting the northern, central and southern transshipment markets, as it is seen in figure 1, Finland will increase its integration into new, regional, European and global logistics hubs. The “Finnish Corridor” showed in figure 2, will become the backbone of the Finnish economic activities and most importantly will be the operational translation of regional agreements. The connection of these three transshipment markets will create a new regional logistics hub stretching from the Gulf of Finland to the Arctic Ocean. The synchronization and optimization of effort from north to south will enable Finland to respond to the demand of specific markets. In a multipolar and more balanced world this integrated regional transport network will be a strategic element to support regional agreements objectives.
 WTO, 2011. “21st Century Regionalism: Filing the gap between 21st century trade and 20th century trade rules”. [pdf] Geneva: Graduate Institute. Available at: <http://www.wto.org/english/res_e/reser_e/ersd201108_e.pdf> [Accessed 22 September 2016].
 WTO, 2013. “Global Value Chains In a Changing World”. [pdf] Geneva: WTO Publications. Available at: <http://www.wto.org/english/res_e/booksp_e/aid4tradeglobalvalue13_e.pdf> [Accessed 22 September 2016].
 Bremmer, I., 2012. Every Nation for Itself: Winners and Losers in a G-Zero World. New York: Pinguin Group.