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1. US-China geoeconomic rivalry intensifies: A risk or an opportunity for European companies?

Author:
Jana Titievskaia
Publication Date:
11-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
As the US and China balance between the pursuit of strategic security interests and ambitions to attain economic growth, novel sources of risk are emerging for globally active businesses, ranging from sanctions to export controls. The Biden presidency will offer only moderate respite from the escalation of this geoeconomic rivalry, even as US-China trade recovers in the aftermath of the pandemic. In the face of US-China rivalry, the EU and its member states have opted for the third way of “open strategic autonomy”, including a range of trade instruments that will allow the EU to support the competitiveness of its companies more effectively. European companies need to closely monitor their risk exposure in various transmission channels and stay attuned to unexpected opportunities that can materialise in the form of market entry possibilities and the development of new niches.
Topic:
Hegemony, Rivalry, Strategic Interests, and Competition
Political Geography:
China, Europe, Asia, North America, and United States of America

2. Turkey in Central Asia: Possibilities and limits of a greater role

Author:
Toni Alaranta and Kristiina Silvan
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Turkey’s long-term search for strategic autonomy, shifting global power relations, and Central Asian governments’ desire to foster multi-vector foreign policies have prompted Turkey to successfully intensify its activities in Central Asia. From the 1990s onwards, Turkey’s activism in Central Asia has strengthened cultural, trade, and diplomatic relations. Its multilateral coordinating body, the Cooperation Council of Turkic Speaking States, is being further institutionalized into the Organization of Turkic States. Turkey’s potential for acquiring a greater role in the region is limited. Its economic engagement remains modest, and Central Asian states’ responses to the Taliban takeover in Afghanistan indicate that Russia and China remain the region’s preferred security partners. Although Turkey, China, Russia, and other external actors compete in Central Asia, no full-fledged confrontation has taken place in the region so far. Turkey’s new initiatives are unlikely to change this dynamic, as long as they are conducted in the spirit of inclusive multipolarity.
Topic:
Security, Foreign Policy, Strategic Interests, and Power
Political Geography:
Europe, Central Asia, Turkey, and Asia

3. Central Bank Digital Currencies and the implications for the global financial infrastructure: The transformational potential of Russia’s digital rouble and China’s digital renminbi

Author:
Maria Shagina
Publication Date:
01-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The launch of Central Bank Digital Currencies (CBDC) not only revolutionizes the international financial system, it also represents an opportunity to minimize the exposure to the US dollar transactions and avoid US oversight. China enjoys a first-mover advantage, as it became the first major economy to launch a CBDC. Following in Beijing’s footsteps, Russia is at the forefront of advancing its digital currency project. As US-sanctioned countries, Russia’s and China’s motivation extends beyond transaction costs reduction and financial inclusion: the governments seek to reduce their dependence on the US dollar and mitigate sanctions risks. In the short term, the US dollar’s international status remains unrivalled. No currency is well-positioned to displace the greenback as a reserve currency. In the long term, CBDCs could eliminate the need for third-party intermediaries and allow cross-border transactions that take place outside of the US-led financial system. This would hamper the US’s ability to use sanctions as a geoeconomic tool and oversee their extraterritorial enforcement.
Topic:
Finance, Digital Economy, Central Bank, and Banking
Political Geography:
China and Asia

4. Russia’s shifting foreign and security policy in Northern Europe: The new geopolitical meaning of ‘good neighbourliness’

Author:
Sinikukka Saari and Jyri Lavikainen
Publication Date:
02-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Since the start of Putin’s third presidential term in 2012, geopolitical competition has also become rooted in the Nordic region, and small states’ room for manoeuvre in security policy has shrunk. In Russia’s view, maintaining ‘good neighbourly relations’ is primarily the responsibility of small states that always need to negotiate the limits of their sovereignty with great powers, such as Russia. From the Nordic point of view, the relations may require walking on eggshells. Prior to 2014, Norway was often mentioned among Russia’s ‘good neighbours’, but now Russia regularly calls off its policy of ‘reassurance and deterrence’. There are increasing signs that, in Russia’s view, a ‘good neighbour’ should refrain from extensive security collaboration and training with NATO and the US. Hence, Finland and Sweden cannot wholly avoid political tension with Russia merely by staying outside of the Alliance.
Topic:
Security, Foreign Policy, Military Strategy, and Strategic Interests
Political Geography:
Russia and Europe

5. Iraq’s state of democracy: A self-perpetuating cycle against reform in favour of the political elite

Author:
Mariette Hagglund
Publication Date:
02-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
In addition to Afghanistan, Iraq has been one of the US’s major state-building projects in the 21st century. The recent events in Afghanistan have again highlighted criticism against large-scale interventions. The changes in Iraq’s electoral law have brought about some positive changes, but did not address the root causes of the problems in the political system. Institutions in Iraq are weak and marred by politicization and pressure from powerful parties. Hence, their independence is highly questionable. While improving democracy in Iraq would require radical change, taking minor steps forward remains a more attractive and doable option for the Iraqi and international leadership. However, by working with established political players, the very barriers to more significant reform are simultaneously being strengthened.
Topic:
Reform, Democracy, Elites, and Social Order
Political Geography:
Iraq and Middle East

6. Schengen reform and the instrumentalisation of asylum-seekers: New Commission proposals legitimate states’ existing practices

Author:
Saila Heinikoski
Publication Date:
02-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The European Union lacks a consistent asylum and migration policy, which makes it vulnerable to the instrumentalisation of asylum-seekers, most recently visible in the Belarusian actions at its borders with EU countries. In December 2021, the European Commission published proposals on tackling the instrumentalisation of migrants and reforming Schengen rules, but they appear to miss their targets. Instead of addressing the hostile third country, the instrumentalisation proposal weakens the rights of asylum-seekers at the border. Schengen reform proposes the possibility of an indeterminate period of reintroduced internal border controls, legitimating the years-long border controls in six Schengen countries (France, Germany, Denmark, Austria, Sweden and Norway). Asylum and migration policy is also progressing, as the 18-month-old proposal for the New Pact on Migration and Asylum is expected to move forward, contributing to the badly needed harmonisation of policies.
Topic:
Migration, Reform, Asylum, and Humanitarian Crisis
Political Geography:
Europe

7. The EU´s quest for geoeconomic power: Pursuing open strategic autonomy

Author:
Niklas Helwig and Mikael Wigell
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The EU is adapting its policy toolkit under the heading of ‘open strategic autonomy’, which combines the Union’s market-liberal preferences with more assertive economic policies. While the EU is largely deploying defensive measures to protect itself from unfair trade practices and economic coercion, it is also increasingly moving towards a more strategic use of economic tools. The EU’s economic defence capabilities include initiatives to improve competitiveness in key strategic sectors (such as cloud computing, semi-conductors, and pharmaceuticals) as well as instruments to deter, block or retaliate against distortive or coercive measures by other powers. The strategic policies of the EU include trade and investment instruments for economic ‘binding’, such as the new ‘Global Gateway’ initiative, as well as means for leveraging the attractiveness of access to the single market to promote the EU’s norms and interests. The EU’s recent sanctions against Russia demonstrates the Union’s coercive capabilities in the economic domain, and its potential as a geoeconomic power.
Topic:
Regional Cooperation, European Union, Strategic Interests, and Strategic Autonomy
Political Geography:
Europe

8. Germany’s shifting policy towards Russia: The sudden end of Ostpolitik

Author:
András Rácz
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
A reassessment of Germany’s relations with Russia started after the annexation of Crimea in 2014, and was catalyzed by several offensive actions taken by Moscow, including hacking attacks against the national parliament, disinformation campaigns, as well as an attempt on the life of Russian opposition politician Alexei Navalny. The new German government, formed following the September 2021 Bundestag election, is different from its predecessors in all important respects regarding foreign policymaking towards Russia. The Chancellor, the governing coalition, as well as the composition of the parliament have all changed. These changes have been pushing Germany towards a gradual reconsideration of its traditional Ostpolitik, which perceived mutually beneficial economic cooperation with Moscow as a guarantee of stability and predictability in Europe. Russia’s full-scale war against Ukraine, launched on 24 February, marks the point of no return. The war made Berlin cross several important red lines of German foreign policy, such as agreeing to very heavy sanctions against Russia, halting the Nord Stream 2 pipeline, and delivering weapons to Ukraine. This de facto marks the end of Ostpolitik.
Topic:
Security, Foreign Policy, Defense Policy, and Strategic Interests
Political Geography:
Russia, Europe, and Germany

9. Transparency in multilateral climate governance: Ranking countries by the Climate Transparency Adherence Index

Author:
Romain Weikmans and Antto Vihma
Publication Date:
03-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Reporting and review arrangements are often portrayed as vital for keeping countries informed about each other’s climate intentions and actions. They are set in order to enhance accountability and mutual trust, ultimately securing more ambitious climate actions. This Briefing Paper provides an updated analysis of state engagement with the recent reporting requirements under the United Nations Framework Convention on Climate Change (UNFCCC). The analysis shows that the performance of countries continues to vary greatly. The full data of the research is available to be requested from the authors. Understanding current trends of engagement with reporting is crucial for informing the effective implementation of the Paris Agreement. Indeed, the Agreement calls for an “Enhanced Transparency Framework” to be implemented by 2024. This represents a major ramping up of transparency obligations, especially for developing countries. Significant challenges lie ahead in the implementation of ever more stringent transparency requirements. Political reluctance to report on national climate actions (or lack thereof) to multilateral institutions such as the UNFCCC is a likely obstacle to the functioning of the new transparency framework. Technical obstacles may also limit the disclosure of information.
Topic:
Climate Change, Environment, Governance, Multilateralism, and Transparency
Political Geography:
Global Focus

10. France in the Eastern Mediterranean and the MENA region’s geopolitical competition: French grandeur or European sovereignty?

Author:
Toni Alaranta
Publication Date:
04-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The global rivalry between the US and China, as well as geopolitical competition and instability in the EU’s southern neighbourhood, are perceived by France as urgent matters requiring stronger EU foreign policy, conceptualized as European sovereignty. The French foreign policy elite are still largely committed to the idea of France’s exceptional role in the world, and to the extent that the EU as a whole fails to live up to the tasks presumed by France, continue their attempts at forging coalitions of the willing. France has in recent years built a web of strategic partnerships, for example with Greece, the Republic of Cyprus, the United Arab Emirates, and Egypt, through which it aims to govern the instability in the EU’s southern neighbourhood. The aim is also to deter regional adversaries such as Turkey, a strategy that needs to be re-evaluated due to the Russian invasion of Ukraine. France often equates its national interests with those of the EU. While this can be seen to enhance European sovereignty, it also risks increasing the perception that the EU would be a participant in various Middle Eastern conflicts. This undermines the EU’s ability to function as an objective broker and anchor of norms.
Topic:
Regional Cooperation, Hegemony, Foreign Interference, and Competition
Political Geography:
Africa, Europe, Middle East, France, North Africa, Mediterranean, and MENA

11. European politics in times of crisis: Developments in Germany, France and Italy, and consequences for the EU

Author:
Marco Siddi, Niklas Helwig, and Tuomas Iso-Markku
Publication Date:
05-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The war in Ukraine and the long-term consequences of the Covid-19 pandemic have put the spotlight on important political developments in the three largest EU members, Germany, France and Italy. In Germany, the new coalition government led by Olaf Scholz is trying to adapt the country’s foreign, energy and fiscal policies to the new international scenario, relinquishing some of its long-term tenets. France has just re-elected Emmanuel Macron as President, who is likely to advocate more flexibility in EU fiscal rules and strategic autonomy in foreign, defence and energy policy. Mario Draghi’s government has attempted to steer Italy out of the economic and health crisis and has sought closer cooperation with France. Italy will hold a general election by June 2023, with four parties vying for pre-eminence. In the wake of Brexit, Berlin, Paris and Rome have tried to revive the integration process. In the near future, it is expected that they will continue to drive EU politics, even if sometimes with different priorities, in close consultation with European partners.
Topic:
Politics, Regional Cooperation, European Union, Leadership, and Political Crisis
Political Geography:
Europe, France, Germany, and Italy

12. Western financial warfare and Russia’s de-dollarization strategy: How sanctions on Russia might reshape the global financial system

Author:
Maria Shagina
Publication Date:
05-2022
Content Type:
Working Paper
Institution:
Finnish Institute of International Affairs
Abstract:
Since 2014, Russia’s de-dollarization plan has been guided by security and geopolitical considerations. By dumping the US dollar from its foreign currency reserves, Russia diverted from the traditional approach where liquidity and the credibility of the issuer determine the choice of currency. In 2022, Russia has doubled down on its efforts to de-dollarize the economy. What started as de-dollarization in 2014, transformed into full-blown rouble-ization in 2022. Following the dynamic of an emerging multipolar world order, the global financial system is also gravitating towards fragmentation and currency multipolarity. The overuse of sanctions could strengthen revisionist countries’ desire to increasingly conduct their trade in non-dollar currencies in an attempt to avoid US oversight. If current trends continue, the de-dollarization effort could gain ground and undermine the primacy of the US dollar.
Topic:
Monetary Policy, Sanctions, Finance, and Conflict
Political Geography:
Russia, Europe, and Global Focus

13. Southeast Asian democracy: Democratic regression or autocratic hardening?

Author:
Bart Gaens and Olli Ruohomäki
Publication Date:
06-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
In line with a global trend, Southeast Asia faces an overall decline in levels of democracy, raising the question of whether democratic progress in the region has reached its limits. Most member states of the Association of Southeast Asian Nations (ASEAN) have not seen a “wave of democratization” after a long period of authoritarianism and suppression. Instead, the region has been characterized by remarkably resilient “flawed” democracies and relatively stable autocratic regimes, in some cases in spite of strong economic growth and social development. Democracy, or rather autocracy with some democratic elements, has been ebbing and flowing. Most Southeast Asian flawed democracies and autocracies alike are engaged in the politics of hedging, seeking cooperation with multiple partners. These include authoritarian China, which is not interested in the political systems of the countries it deals with, but also the US, the EU and Japan. Pragmatism is inherent in the way ASEAN polities are managed. As long as living conditions improve or at least remain stable, there is little appetite for Western-style democracy that places participatory politics and human rights at the centre of societal development.
Topic:
Governance, Authoritarianism, Democracy, and Leadership
Political Geography:
Asia and Southeast Asia

14. Russia’s connectivity strategies in Eurasia: Politics over economy

Author:
Kristiina Silvan and Marcin Kaczmarski
Publication Date:
06-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Russia has been attempting to strengthen connectivity within Eurasia since the early 2000s as a part of its policy to “pivot to the East”. Yet due to limited resources and political will, the tangible effects of its connectivity strategy have remained limited. The Russian Far East would greatly benefit from an improved connectivity infrastructure, given its proximity to Asian markets and the abundance of natural resources in the region. However, the attempts to accelerate regional socio-economic development by strengthening the region’s connectivity have failed to make a difference. In post-Soviet Central Asia, Russia adopted a passive approach to connectivity in the 1990s and 2000s, which meant focusing on maintaining and protecting the links inherited from the Soviet Union. It was only the pressure of external actors – both China and the West – that prompted Moscow to take a more active stance in the region in the 2010s. The launch of China’s Belt and Road Initiative pushed Russia to promote its own grand vision of trans-continental connectivity, the Greater Eurasian Partnership, designed to reaffirm Moscow’s great-power status and its equal standing with China. While it lacks economic and administrative foundations and its implementation is highly implausible, it has fulfilled a symbolic role as Russia’s grand connectivity project for Eurasia.
Topic:
Economics, Infrastructure, Belt and Road Initiative (BRI), Rivalry, and Resource Allocation
Political Geography:
Russia, China, Europe, and Asia

15. 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

16. US global security partnerships in the Biden era: Twilight or regeneration?

Author:
Eoin Micheál McNamara
Publication Date:
07-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
Guarantee-based alliances underpinned US grand strategy during the Cold War, but policies designed for the War on Drugs (WOD) after the 1990s, the Global War on Terror (GWOT) in the 2000s, and counter-piracy operations in the 2010s have led US policymakers to increasingly rely on ad hoc security partnerships. Looser partnerships facilitate cooperation that is quick to reform and redistribute, benefiting the US when reacting to urgent risks. When the necessity for cooperation diminishes, partnerships allow for prompt “exit options”. Guided by a narrowing set of strategic priorities under President Biden, the US partnership network is undergoing some downsizing. As part of a wider effort to challenge the US-led international order, Russia and China seek to reduce US opportunities to renew security partnerships. Ever closer US and NATO partnerships with Finland and Sweden have bucked an otherwise weakening global trend in recent years. Russia’s escalated aggression in Ukraine has caused Finland and Sweden to seek policy change from partnership-based security policies to NATO membership and stronger deterrence.
Topic:
Security, Defense Policy, International Cooperation, and Military Strategy
Political Geography:
North America and United States of America

17. The OSCE and a 21st century spirit of Helsinki: Opportunities to shift security back to the people

Author:
Bradley Reynolds and Johanna Ketola
Publication Date:
08-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
A common understanding of the OSCE and the security it seeks to promote has been in decline since 2008. The war in Ukraine and renewed Russian invasion in February 2022 have led many to ask how to sustain the OSCE going forward. One consideration is to temporarily remodel the OSCE as a ‘consensus minus one’ organization to exclude Russia from decision-making. This would allow the institutional set-up and characteristics of a liberal world order institution to be maintained. Another perspective is the return to a Cold War conference model, which would facilitate dialogue with Russia and its allies despite Moscow’s active dismantling of the OSCE and its principles. The immediate future for the OSCE looks dim. Ahead of the 50th anniversary of the Helsinki Final Act in 2025 and in preparation for the Finnish OSCE Chairpersonship, this Briefing Paper argues that the perspectives of civil society may help retain a key tenet of the OSCE process and help reimagine a new Helsinki spirit. An expanded, interdimensional Moscow Mechanism may offer a via media between the two perspectives and continue to incorporate civil society perspectives into the operational work of the OSCE.
Topic:
Security, Civil Society, International Cooperation, and Liberal Order
Political Geography:
Global Focus

18. The EU’s strategic multilateralism: Global engagement in an era of great-power competition

Author:
Niklas Helwig
Publication Date:
08-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
The crises of previous years and the rise of strategic competition have put the EU’s traditional approach to multilateralism under pressure. The EU’s pledge for “a more stringent and strategic approach to multilateralism” has become even more relevant with Russia’s war of aggression against Ukraine. Three adjustments to the EU’s approach to multilateralism signify a more strategic approach. In a move towards a more instrumental engagement, the EU is using international cooperation as an avenue to protect its interests in the global competition. The EU is displaying more willingness than before to leverage its power bilaterally and through its work in international organisations. It is also more willing to focus on ad hoc frameworks in order to preserve the effectiveness of global cooperation and extend it to new areas of governance. Strategic multilateralism comes with certain risks attached. It can undermine the legitimacy of the formal multilateral system and the global protection of fundamental rights. The EU needs to weigh the benefits of a more strategic approach against the risks of global fragmentation.
Topic:
Regional Cooperation, European Union, Multilateralism, and Strategic Interests
Political Geography:
Europe

19. Re-securitizing climate: From ‘climate security’ to ‘ecology of peace’?

Author:
Emma Hakala and Vadim Kononenko
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
One implication of the war in Ukraine is that collective solutions to climate security will be ever more difficult to forge. Earlier hopes for cooperation were focused on the ‘securitization’ of climate change – that is, presenting it as an issue for security policy. The expectation was that the security implications of climate change would be recognized as a shared threat and dealt with through multilateral cooperation under UN leadership. The securitization of climate change took place at the same time as a decline in liberalism and multilateralism in international politics. The rise of conflictual and disintegrative tendencies in international relations creates a dangerous geopolitical context for climate change. Climate security is part of great-power politics. Recognizing this requires a deep rethinking of how cooperation can be achieved if this issue cannot be decoupled from geopolitical gridlocks. Climate and environment issues should be ‘re-securitized’, for example, by further embedding them into the few existing multilateral regimes, such as the Paris Agreement and the UN Convention on Biodiversity.
Topic:
Security, Climate Change, Environment, and Green Transition
Political Geography:
Global Focus

20. NATO’s Nordic enlargement and Turkey’s reservations: Trilateral Memorandum of Understanding in the context of Turkey’s wider strategic interests

Author:
Toni Alaranta
Publication Date:
09-2022
Content Type:
Policy Brief
Institution:
Finnish Institute of International Affairs
Abstract:
With the signing of the trilateral Memorandum of Understanding (MoU), Turkey dropped its initial objection to Finland’s and Sweden’s NATO membership, but has since argued that the conditions agreed in the MoU have not yet been fulfilled. In addition to requiring Sweden and Finland to take a more vigorous stance regarding the Kurdistan Workers’ Party (PKK) and its extension in Syria, Turkey has used Nordic NATO applications as a tool to raise these issues on NATO’s agenda, pressuring the US in particular for a change in its Syria policy. Turkey’s reservations need to be conceptualized within its determined search for strategic autonomy, increased room for manoeuvre, and an ideological decoupling from the West. Turkey’s strategic interests have increasingly diverged from the rest of the alliance, likely leading to a more permanent intra-alliance opposition position in the coming years, part of which are the ongoing trilateral talks between Turkey, Finland and Sweden.
Topic:
Security, Defense Policy, NATO, and Regional Cooperation
Political Geography:
Europe, Turkey, and North America