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1. US-EU climate change industrial policy: Pulling in different directions for cooperation, competition, and compromise

Author:
Cordelia Buchanan Ponczek
Publication Date:
08-2023
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The United States and the European Union agree on prioritizing policies to address climate change, which includes securing supply chains for components essential to low-carbon technology. Despite this agreement, their policies to address climate change and low-carbon technology could foster competition. The US Inflation Reduction Act (IRA) reflects the competitive advantage of the US to draw in the best talents, capabilities, and resources from outside sources. This leads to a disconnect between the industrial policy benefits of the IRA within the US and the potential competitive impact the IRA has on US relationships with allies. The EU’s policies are shaped by the bloc’s desire to respond to external actors—including China and Russia—while protecting the common market and building up its internal capability to ensure security of supply. This is complicated by individual member-state objectives. The 2024 US presidential election could bring change: A Republican administration might not share the EU’s outlook on climate change, the need for government intervention, or even the close transatlantic relationship seen during the Biden administration.
Topic:
Climate Change, Governance, European Union, Economic Policy, and Geoeconomics
Political Geography:
Europe, Finland, and United States of America

2. The geoeconomics of the hydrogen era: Towards a new global energy architecture

Author:
Timo Behr
Publication Date:
07-2023
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Clean hydrogen is crucial for ensuring the transition to a carbon-neutral economy, and large quantities of it will be needed in the future. The transition from a hydrocarbon to a hydrogen economy will have significant geopolitical and geoeconomic consequences. Due to its unique properties, hydrogen will not become the “new oil”. While oil and gas have encouraged a concentration of power – in the hands of producer countries, major oil companies, and around strategic choke points – hydrogen will favour a dispersion of power. The transition to a hydrogen economy will see strong competition over technologies, raw materials, and regulatory standards. Hydrogen has the potential to make the world energy trading system more balanced, more democratic, and less prone to price fluctuations, but it could equally lead to fragmentation, inadvertently contributing to current geopolitical divisions. For the EU and Finland, the transition towards a hydrogen economy presents both challenges and opportunities. Concerted action and active diplomacy will be needed to prevent Europe from being overtaken by others and slipping into new dependencies.
Topic:
Climate Change, Governance, Hydrogen, Energy, and Geoeconomics
Political Geography:
Europe and Finland

3. The role of space technologies in power politics: Mitigating strategic dependencies through space resilience

Author:
Markus Holmgren
Publication Date:
06-2023
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Space activity is experiencing a boom with the scope and importance of space technologies and services fuelling rapid growth upon growth. While the space boom is catalysing transferral of the ownership of previously public infrastructure and capabilities to corporate control, many space technologies have critically important military and civilian applications. As the importance of space sectors grows, both public and private cyberoperations targeting space infrastructure proliferate. This makes it more difficult to attribute the perpetrators of cyber operations. The United States’ lead in the space sector is increasing. Starlink, a satellite internet constellation operated by the US-based company SpaceX, will serve to bind many nations to one more US-controlled communication architecture. As a result of the implications of space technologies for comprehensive security, building space resilience is becoming paramount. States must diversify their supply of space-related services and tighten cooperation with like-minded states.
Topic:
Security, Foreign Policy, Defense Policy, Economic Policy, and Geoeconomics
Political Geography:
Europe and Finland

4. Enhancing small state preparedness: Risks of foreign ownership, supply disruptions and technological dependencies

Author:
Mikael Mattlin, Shaun Breslin, Elina Sinkkonen, Liisa Kauppila, and Annika Björkdahl
Publication Date:
08-2023
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs
Abstract:
The post-Cold War liberalist view, according to which interdependences supported a virtuous cycle of mutual gains, has given way to a realist-tinged view that regards economic interdependence as a cause of insecurity and an element in conflicts. In this new environment of increasing great power competition and technological decoupling, all states are not created equal. Major states such as the United States and China can be system shapers, whereas small states tend to be system takers. Unlike smaller states, they have a greater ability to use their investment leverage, supply chain dominance and control of core technologies. For smaller states with open economies, such as Finland and Sweden, these capabilities of major powers create vulnerabilities in the form of security risks of foreign ownership, supply disruptions and critical technological dependencies. The report explores how small states can mitigate such risks. A series of innovative Delphi backcasting exercises in Finland and Sweden brought together 113 sectoral experts and generalists to ponder ways to prevent dystopian scenarios from unfolding. The target years of the scenarios extended from 2027 to 2035, encouraging ideas on both short- and longer-term solutions. Instead of aiming for a consensus of expert views, the process sought to produce a variety of effective means and measures that a small state could choose to adopt. The exercise consisted of nine scenarios, presented as comic art. The narratives on the risks of foreign ownership focused on 1) acquisitions of gaming companies gathering personal data, 2) transfers of real estate ownership in Lapland and 3) venture capital investments in emerging technology start-ups. The scenarios on supply disruptions dealt with 4) discriminatory practices limiting access to antibiotics, 5) political retaliation limiting access to water treatment components and 6) sanctions on wind power materials, components and minerals. As for high technology dependencies, the cases included 7) the maintenance of military technology, 8) the cybersecurity of health technology and 9) the supply of chemicals for research and development activities. According to the report, small states have the least leeway in navigating the risk environments created by technological dependencies, whereas the toolkits to tackle the potential dangers of foreign ownership and supply disruptions are more extensive. Although different issues and insecurities require different bespoke solutions, all the risk categories call for active mitigation efforts. Most of the suggested Finnish and Swedish expert solutions can be clustered into three alternative approaches: protectionist/interventionist, liberal and technologically oriented. Protectionist/interventionist solutions would expand the state’s powers in controlling, guiding and limiting economic activities. Key suggestions included: covering acquisitions and greenfield investments in national foreign direct investment screening screening real estate acquisitions with a wide range of countries of origin imposing country-specific limitations to real estate acquisitions screening venture capital investments in emerging technologies initiating a national security act to limit foreign control rapidly imposing country- and company-specific limitations to bids in critical industries increasing tariffs supporting domestic or EU-level production through subsidies and industrial policy friendshoring the production of critical goods expanding the scope of supply stockpiling in pharmaceuticals and water treatment components The more liberal approach towards national preparedness would focus on solving the challenges primarily through carrots instead of sticks – to avoid limiting entrepreneurial freedoms and interfering with the dynamics of the capitalist market economy. The proposed solutions included: initiating value debates to guide individuals’ choices when accepting investments formulating a national innovation strategy to boost domestic companies’ operating conditions in emerging technology fields teaching “technology literacy” to guide the use of foreign-owned products engaging all stakeholders in making decisions on foreign ownership diversifying the sources of critical goods such as antibiotics enhancing awareness of risks and making “plan Bs” in supply chain management deepening the EU’s single market to offer genuine scalability opportunities for start-ups The third, more technologically oriented approach would rely on new innovations or technical solutions to enhance small state preparedness. Key ideas included: innovating new medicines to replace antibiotics prioritising non-conventional technologies such as small modular reactors (SMRs) enhancing domestic capacity to produce key components with 3D printing researching alternative materials to replace critical chemicals developing the recycling, recovery and transportation of critical chemicals adopting geofencing and coding solutions to enhance cybersecurity designating emerging technologies as focus areas in higher education increasing the adaptability of technical solutions through standardisation These three approaches prioritise different key solutions for enhancing small state preparedness. However, they represent generic policy preferences rather than ready-made policy recommendations. Ideally, states can formulate their own pick-and-mix toolkit by combining elements from the different approaches. The complementary nature of some of the expert views was also suggested by the fact that many – even most – respondents argued for diversification as a solution to various challenges. For example, and regardless of the chosen strategy, tendering rules could be improved by placing quality over price, taking geopolitical risks into account and allowing multiple winners in contrast to the currently dominant winner-takes-it-all logic, which leads to overly concentrated supply chains. Moreover, at least minor legislative tightenings were widely proposed to be made on foreign ownership – especially with regard to that of nationals of authoritarian states. These changes were, however, typically proposed to be complemented with such balancing acts as long-term leases and incentives to develop and acquire domestic products and companies. Ultimately, by highlighting alternative approaches to small state preparedness, this report seeks to encourage democratic discussion on a broader political choice: what type of state and economy do we want in the future? It is not only their identity that guides what states do; adopted policies and means also shape state identities over time.
Topic:
Security, Science and Technology, Supply, and Geoeconomics
Political Geography:
China, Finland, Asia, Sweden, and United States of America

5. Nordic resilience: Strengthening cooperation on security of supply and crisis preparedness

Author:
Mikael Wigell, Mariette Hagglund, Christian Fjader, Emma Hakala, and Johanna Ketola
Publication Date:
09-2022
Content Type:
Special Report
Institution:
Finnish Institute of International Affairs
Abstract:
Against the backdrop of the COVID-19 crisis and Russia’s aggression in Ukraine, crisis preparedness and security of supply have taken on a new urgency. The recent events have demonstrated the fragility of many of the international flows of critical goods, products and services on which the Nordics also depend. As one of the most interconnected regions in the world, it is only through cooperation that the Nordics can avoid supply disturbances and crises that cascade throughout the region. The Nordics are well placed to enhance such cooperation. Based on extensive comparative analysis, the report shows how the Nordics share key characteristics in their approach to crisis preparedness and security of supply. What this report calls the Nordic resilience approach thus also forms a solid basis for joint action at the regional level. Finland’s and Sweden’s pending NATO accession will further strengthen the potential for Nordic cooperation. It is with this potential in mind that the present report investigates Nordic crisis preparedness and security of supply models, reviews existing cooperation and provides practical recommendations on how to jointly strengthen Nordic resilience.
Topic:
International Cooperation, Regional Integration, Crisis Management, COVID-19, and Russia-Ukraine War
Political Geography:
Russia, Ukraine, Finland, Sweden, and Nordic Nations

6. Finland in Afghanistan 2001–2021: From stabilization to advancing foreign and security policy relations

Author:
Katariina Mustasilta, Tyyne Karjalainen, Timo R. Stewart, and Mathilda Salo
Publication Date:
09-2022
Content Type:
Special Report
Institution:
Finnish Institute of International Affairs
Abstract:
Finland participated in the international stabilization and reconstruction efforts in Afghanistan for nearly 20 years, contributing around 2,500 soldiers and 140 civilian crisis management experts. During this period, Finland’s development cooperation funds and humanitarian assistance allocated to Afghanistan amounted to around EUR 398 million. When Finland made the decision to join the operations in Afghanistan at the turn of 2001 and 2002, the country was living in uncertain yet optimistic times. The Taliban regime had collapsed quickly after the US-led military intervention, and the international community was broadly committed to supporting the interim administration in changing the country’s course. Finland sent a CIMIC unit to Afghanistan to participate in the International Security Assistance Force (ISAF) and support the stabilization and reconstruction efforts. It also began to channel development cooperation funds to Afghanistan, notably through UN and World Bank programmes, and soon allocated most of its civilian crisis management resources to the European Union Police Mission (EUPOL) in Afghanistan. In the second half of the 2000s, however, Afghanistan slid further into a devastating civil war. A decade into the international intervention, the early optimism had given way to Afghans’ growing distrust of their government and the international actors. The Finnish troops, now comprising around 200 soldiers, repeatedly engaged in combat as part of the military operation that was now led by NATO and had become a party in the conflict. While the security arrangements for the international actors required increasing resources, their room for manoeuvre became significantly more limited. After the ISAF mission ended, Finland continued to participate in the NATO-led Resolute Support Mission (RSM), which supported the Afghan security forces until the summer of 2021. Finland also remained one of the most important actors to support EUPOL until the end of the mission and took responsibility for co-hosting the 2020 Afghanistan pledging conference to support the country. Afghanistan was the biggest recipient of Finland’s development cooperation funds throughout the second half of the 2010s. In August 2021, Finland suspended its extensive activities in Afghanistan in chaotic circumstances as the international community left the country following the US decision to withdraw its forces and the Taliban’s seize of power. This research examines Finland’s activities in Afghanistan by focusing on why Finland decided to engage in Afghanistan, on what its activities were based, and what can be learned from them for future crises and conflicts. The research is based on the analysis of a broad set of qualitative data consisting of interviews with 64 people who were involved in the intervention in Afghanistan or employed in related activities. Workshop discussions were also held to hear the views of the Afghan diaspora in Finland and experts. In addition, the researchers analysed public documents and previous research literature and held background discussions with experts. This research report broadly examines the consequences of Finland’s objectives, the logic behind its activities and the key challenges from the perspectives of military crisis management, civilian crisis management, and development cooperation and humanitarian assistance. Our research findings suggest that Finland’s activities in Afghanistan were motivated by multiple objectives that were partly unclear and at times conflicting. Based on government reports and other public documents, Finland’s primary aim was to stabilize and support Afghanistan to enhance international peace and security. The proclaimed objectives highlighted Finland’s responsibility as part of the UN-led international community and its efforts to support the development of good governance and the rule of law and promote the rights of women and girls in particular. In our research, these objectives comprise a framework we call “Finland as a benefactor”. On the other hand, our analysis suggests that alongside – and over – these proclaimed objectives, Finland’s participation was primarily guided by its desire to maintain and strengthen its foreign and security policy relations with the US and other international partners, as well as its effort to deepen its collaboration with NATO. Within the limits of this “Finland as a partner” framework, Finland sought to position itself as a reliable benefactor but also to gain advantage by improving its national capacities. Finland’s multiple objectives in Afghanistan might not necessarily have posed a problem in terms of the appropriateness of Finland’s involvement. Indeed, at the beginning they worked in harmony as the operating environment allowed Finland to show solidarity with the US and support it in the fight against terrorism while also appearing as a humanitarian actor that promoted stability and development in Afghanistan. However, tensions emerged between the different rationales when the situation in Afghanistan deteriorated, and the nature and outcomes of the intervention became more conflicted. In the absence of clearly and transparently set objectives, it was challenging to build an action plan and assess the activities. One particular factor that made the planning and monitoring of Finland’s participation difficult was the effort to disguise the fact that it was motivated by a desire to foster transatlantic relations and partnerships. From the perspective of the international partnerships, it was enough that Finland participated in the intervention. In terms of Afghanistan and its development, the objectives of the various activities remained vague, unrealistic and unclear, and they received insufficient attention. Instead of critical analysis and strategic monitoring, both international and Finnish actors attempted to meet the stated objectives by highlighting the progress made in Afghanistan and keeping silent about the combats and difficulties. It is almost impossible to assess to what extent Finland achieved its objectives in Afghanistan, because no clear and transparent objectives had been set. Based on our interviews, Finland’s involvement benefitted its transatlantic relations, Nordic cooperation and position in the international community. Besides defence cooperation, Finland developed its national capacities and raised its profile within the EU’s civilian crisis management framework. It is however difficult to assess in retrospect how the different forms of participation deepened Finland’s relations with the US, for example, and whether Finland’s activities were cost-efficient in terms of its partnership goals and national capacities, because no expectations had been explicitly stated. While temporary successes were achieved in improving security and the conditions for education in some areas, for example, issues such as a lack of understanding of the context of the conflict, challenges related to local ownership and the absence of a coherent long-term strategy became stumbling blocks in the international intervention in Afghanistan. Previous research has already called attention to the negative impacts of the intervention: the civilian victims of the military operations, the changes in local power structures, the displacement of local activities and increased corruption are only some of the examples of the impacts for which Finland has also been partly responsible. During, and partly as a result of, the intervention in Afghanistan, Finland’s policy came to be underpinned by a comprehensive crisis management strategy. In Afghanistan, this meant that Finland participated in multiple sectors and placed emphasis on the interdependence between the development and civilian crisis management efforts and military crisis management. Overall, our interviewees assessed that the activities of Finland and Finnish actors in Afghanistan were of high quality and appreciated. Our research suggests that the comprehensive strategy adopted by Finland served to justify its participation in different areas of the intervention and especially its military participation. However, Finland failed to fulfil the strategy in terms of coordinating its various activities in Afghanistan. Finland’s experiences in Afghanistan provide lessons learned that can be used to guide its activities in future crisis and conflict situations. First, it is necessary to set clearer and more transparent objectives to enable the effective planning and strategic monitoring of activities. In the context of partnership and capacity goals, clear objectives would help to develop the resourcing and targeting of activities. As regards supporting peace and stability, clearer, context-specific objectives would make it possible to monitor the appropriateness and comprehensiveness of activities. However, adopting a comprehensive approach does not mean that Finland should engage in all activities or areas of assistance in the target country; rather, its activities should be targeted to support the overall international aid effort. It is also important to develop Finland’s advocacy and impact efforts in multilateral interventions, in particular in situations in which Finland contributes significant resources. While Finland is in principle a small player, playing an active role in issues such as drawing attention to the possible negative impacts of interventions is consistent with its value-based foreign policy. By collaborating with like-minded actors, Finland has the opportunity to promote its interests through interventions (as far as these interests have been identified). However, sufficient resources are required for effective outcomes: development cooperation funds and inputs from seconded experts will be wasted if the human resources allocated to the comprehensive planning, implementation and monitoring of Finland’s participation are insufficient. The setting and implementation of realistic objectives appropriate to the context require a continuously updated conflict analysis, which in the case of small players such as Finland must also include an analysis of the context of international aid and operations. After interventions, it is also important to effectively put to use the expertise of the people who return to Finland after working in crisis areas so as not to waste the cultural and linguistic knowledge they have acquired. The lessons identified in this research are also relevant for the future of Afghanistan and Afghan people. The international community, including Finland, has been involved in shaping the structures of Afghan society, as well as its conflict dynamics, for nearly 20 years. This means that it also continues to assume its responsibility after withdrawing from the country – all the more so because the decisions to start and terminate the intervention were primarily driven by interests other than those of Afghans themselves. In terms of Finland’s credibility as a foreign policy actor, it is particularly important that it continues to abide by its long-standing commitment to promote the rights of women and girls. In the present difficult circumstances, the cooperation and assistance efforts should be based on placing the needs and priorities of Afghans at the centre. This can be achieved by conducting a careful conflict analysis, listening to and discussing with Afghans, and promoting a strategically coordinated approach to setting the objectives and framework conditions of the cooperation at the level of the international community.
Topic:
Security, Foreign Policy, NATO, Crisis Management, and Stabilization
Political Geography:
Afghanistan, South Asia, and Finland

7. A policy agenda for Finland’s entry into NATO: From ‘one for one’ to ‘one for all’

Author:
Edward Hunter Christie
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
At the NATO Madrid Summit in June 2022, Allies invited Finland and Sweden to join the NATO Alliance. In preparing for its membership, Finland will need to go through a reflection process on how it intends to contribute to NATO’s core tasks and make the most of its membership. Finland should consider making substantial contributions to the deterrence and defence posture in the Baltic Sea region, including in the Baltic states, and elsewhere on the Eastern Flank. In parallel, Finland should also ensure it contributes to the Southern Flank. Finland should aim to hit the ground running into the next cycle of the NATO Defence Planning Process (NDPP) and fulfil all relevant capability targets. Finland should also aim to “start strong to stay strong” on all existing NATO Pledges, notably those on defence investment, cyber-defence, and resilience. It is typical for individual NATO Allies to seek a salient role when it comes to certain specific topics. For Finland, the Arctic (Northern Flank) and resilience seem most promising.
Topic:
Security, Defense Policy, NATO, Regional Cooperation, and Military Strategy
Political Geography:
Europe and Finland

8. Nordic cooperation amid pandemic travel restrictions

Author:
Katja Creutz, Sofie Berglund, Telli Betül Karacan, Alberto Giacometti, and Kristin M. Haugevik
Publication Date:
11-2021
Content Type:
Special Report
Institution:
Finnish Institute of International Affairs
Abstract:
Since 2020, the Nordic countries have been confronted with the Covid-19 pandemic, which has been a multi-level stress test for the region. The strong basis of open borders and free movement in Nordic cooperation has been questioned by national pandemic measures, including wide travel restrictions. The Nordic dimension to pandemic responses has largely been missing, the trust between the countries has arguably been put to test and cross-border commuters have been subjected to differential treatment. Especially cross-border regions have suffered the consequences of travel restrictions, causing disruptions to work and private life. The report draws attention to the preparedness of the Nordic Region to jointly confront global crises. It explores the different strategies and travel restrictions adopted by four Nordic countries: Denmark, Finland, Norway and Sweden. It also studies how Nordic cooperation functioned in a time of crisis. At the local level, it examines the economic, labour market and social implications for three cross-border regions, that is, Tornedalen, Svinesund and Öresund. The report finds that while there is room for improvement in handling a crisis like the pandemic, there are diverging views on the desirability to have all-Nordic approaches to situations affecting national security. The consequences are, however, serious for free movement and the aim to become the most integrated region in the world.
Topic:
Crisis Management, Public Health, COVID-19, and Cooperation
Political Geography:
Finland, Norway, Denmark, and Sweden

9. The Faroe Islands, Greenland and the Åland Islands in Nordic cooperation

Author:
Katja Creutz and Sia Spiliopoulou Åkermark
Publication Date:
12-2021
Content Type:
Special Report
Institution:
Finnish Institute of International Affairs
Abstract:
Nordic political cooperation, embodied by the Nordic Council and the Nordic Council of Ministers, encompasses the five Nordic countries and the Faroe Islands, Greenland and Åland. This long-standing regional cooperation functions as a model of inclusiveness and democratic sustainability as it strengthens the cooperation networks between all the jurisdictions with legislative competences and enables the participation of the three islands that do not enjoy formal statehood. The Faroe Islands, Greenland and Åland have for decades participated in the Nordic institutions, and their contribution to Nordic cooperation extends beyond niceties. The participation of the Faroe Islands, Greenland and Åland in Nordic cooperation increases knowledge about different governance arrangements, peoples and rights. In addition, their substantive knowledge and expertise have played a decisive role in areas such as Arctic affairs and sustainability, with the protection of the environment high up on their agendas. Their participation is an incremental process, however, where the status of the Faroe Islands, Greenland and Åland in Nordic cooperation is entangled with national and international political and legal considerations. While all three seek parity, the Faroe Islands have appeared as the driving force for further integration into Nordic cooperation.
Topic:
Foreign Policy, International Cooperation, and Sustainability
Political Geography:
Finland, Sweden, Greenland, and Arctic

10. Climate change and Finnish comprehensive security: Insights into enhanced preparedness

Author:
Emma Hakala
Publication Date:
12-2021
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Climate change is already threatening the security and stability of societies in various ways, and the impacts will only be exacerbated in the future. The security consequences of climate change can be broadly categorised into direct, cascading and transition impacts. Direct impacts refer to the damage to people and infrastructure caused by extreme weather and other climate phenomena, while in cascading impacts climate change is combined with political, economic and cross-border effects. Transition impacts are linked to the adverse consequences of climate change mitigation and adaptation. It is increasingly imperative to comprehensively integrate climate change into foresight and preparedness activities. In addition to the identification of individual climate security impacts, it is also necessary to identify and continuously monitor broader political and economic developments relevant to climate security. Cooperation across national borders is important for advancing the climate security agenda. International organisations and individual countries should coordinate and exchange information in order to develop preparedness mechanisms and practices.
Topic:
Security, Climate Change, Environment, and Infrastructure
Political Geography:
Europe and Finland