For generations, Finland has lived fearfully in the shadow of its giant Russian neighbor, but today Russia could be the answer to the Finnish economy’s woes.
As they creep deeper into recession, the Finns may turn east for investment, while trying to forget a century under the Tsar, followed by two hot wars and a cold one against the Soviets.
“There might be some prejudices,” Heli Simola at the Institute for Economies in Transition in Helsinki said.
“But these attitudes aren’t an obstacle for commercial exchanges,” Simola added.
Fresh data released by the Finnish government last week showed that the economy will contract 1.2 percent this year, worse than the 0.5 percent drop previously forecast.
This underlines a need for foreign cash, and for Finland, which has Europe’s longest border with Russia, where else to look than east?
The military struggles of the 20th century have been replaced by the entirely different challenge to attract Russian investment. However, it is a struggle Finland may be losing.
“Finland hasn’t met its goals. We haven’t managed to attract as many Russian investments as we expected,” Turku University international business professor Kari Liuhto said.
According to Finland’s central bank, Russian investments between 2002 and last year amounted to 245 million euros (US$338 million), 50 times less than the 12.9 billion euros from the country’s western neighbor, Sweden.
INVESTMENT
Indeed, Russian investment in Finland is less than one-tenth of Finland’s own 3 billion euros of investment into Russia over the same period.
Even if Russian money channeled through EU banks is added, “that doesn’t change the general perspective,” Simola said.
Since late last year, the government has launched a charm offensive to attract investment, particularly from Russia.
Yet so far, Russians have remained unimpressed by claims that Finland is an EU entry point with a strong infrastructure and clear legal framework.
Russian investors “lack information” and “don’t know how to invest in Finland,” Invest in Finland head Tuomo Airaksinen said.
“They don’t know the legislation nor the risks. For many, the Russian market is enough for now,” he said.
To be sure, there has been some interest by Russian oligarchs and Kremlin-run businesses in their western neighbor.
In July, Finnish Fennovoima picked Russian nuclear giant Rosatom to build a plant on Finland’s west coast in a deal which was expected to give Rosatom a 34 percent stake in its Finnish partner.
One month earlier, Russians bought one of Helsinki’s main sporting arenas, Hartwall Areena — which plays host to major international ice hockey matches, including National Hockey League premiere games.
Also, the Russian Internet search engine Yandex is building a large data center in the eastern town of Maentsaelae and in 2011 Russia’s state-owned USC acquired 50 percent of the Archtech Helsinki shipyard, one of the world’s biggest builders of icebreakers.
“Russia’s importance will grow. These projects from the last two or three years prove it,” Airaksinen said.
However, Finland has a long history of privileged yet complicated relations with Russia, from which it became independent in 1917.
While the Nordic country remained west of the Iron Curtain during the Cold War, it was partially within Moscow’s sphere of influence and benefited from preferential trade deals with the Soviet Union.
SENSITIVE ISSUE
Yet today, closer economic ties with Russia are a sensitive issue for many in a country which still bears the scars of two major wars with their eastern neighbor, in 1939 to 1940 and 1941 to 1944.
The Hartwall Areena purchase provoked strong reactions from ice hockey fans and many Finns are wary of Russians buying second homes in the popular east of the country.
Also, scenes of violent protests in Ukraine after Russian President Vladimir Putin’s Russia helped scuttle closer ties between Kiev and the EU only rattles nerves further.
According to a survey commissioned by the environmental group Greenpeace, 60 percent of Finns are opposed to Russian participation in the Fennovoima nuclear power project.
Yet for those welcoming the investments as a much-needed boost to a struggling economy, old animosities should not get in the way when rubles could start rolling in from the east.
In a small town in Paraguay, a showdown is brewing between traditional producers of yerba mate, a bitter herbal tea popular across South America, and miners of a shinier treasure: gold. A rush for the precious metal is pitting mate growers and indigenous groups against the expanding operations of small-scale miners who, until recently, were their neighbors, not nemeses. “They [the miners] have destroyed everything... The canals, springs, swamps,” said Vidal Britez, president of the Yerba Mate Producers’ Association of the town of Paso Yobai, about 210km east of capital Asuncion. “You can see the pollution from the dead fish.
SELL-OFF: Investors expect tariff-driven volatility as the local boarse reopens today, while analysts say government support and solid fundamentals would steady sentiment Local investors are bracing for a sharp market downturn today as the nation’s financial markets resume trading following a two-day closure for national holidays before the weekend, with sentiment rattled by US President Donald Trump’s sweeping tariff announcement. Trump’s unveiling of new “reciprocal tariffs” on Wednesday triggered a sell-off in global markets, with the FTSE Taiwan Index Futures — a benchmark for Taiwanese equities traded in Singapore — tumbling 9.2 percent over the past two sessions. Meanwhile, the American depositary receipts (ADRs) of Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the most heavily weighted stock on the TAIEX, plunged 13.8 percent in
A wave of stop-loss selling and panic selling hit Taiwan's stock market at its opening today, with the weighted index plunging 2,086 points — a drop of more than 9.7 percent — marking the largest intraday point and percentage loss on record. The index bottomed out at 19,212.02, while futures were locked limit-down, with more than 1,000 stocks hitting their daily drop limit. Three heavyweight stocks — Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Hon Hai Precision Industry Co (Foxconn, 鴻海精密) and MediaTek (聯發科) — hit their limit-down prices as soon as the market opened, falling to NT$848 (US$25.54), NT$138.5 and NT$1,295 respectively. TSMC's
ASML Holding NV, the sole producer of the most advanced machines used in semiconductor manufacturing, said geopolitical tensions are harming innovation a day after US President Donald Trump levied massive tariffs that promise to disrupt trade flows across the entire world. “Our industry has been built basically on the ability of people to work together, to innovate together,” ASML chief executive officer Christophe Fouquet said in a recorded message at a Thursday industry event in the Netherlands. Export controls and increasing geopolitical tensions challenge that collaboration, he said, without specifically addressing the new US tariffs. Tech executives in the EU, which is