Economic cooperation in the Barents

Barents is a vast area, and the economic structure varies significantly between the countries and regions. The overrall trend in GDP development has been positive in the 21st century. The East-West division is still visible as the Nordic GDPs are higher than those in Russian regions. In 2011 the average GDP per capita in the whole region was 26 497 euro.

The region possesses vast natural resources. Key industrial sectors are forestry, metallurgy, mining industry, energy production, fisheries and tourism. The region possesses great know-how in these fields and much emphasis is put on how to best develop this vast area in a sustainable way.

The regional cooperation and the cross-border economic activities in the Barents region are interdependent. Development of trade, business cooperation and infrastructure have thus been key priorities ever since the Kirkenes Declaration. Efforts on regional, national and international level, with the Barents Regional Council, have initiated several measures to enhance financial growth and build economic connections. Numerous working groups have been established in order to map and develop sound economic activities in the region.

Financial Mechanisms

There are several financial mechanisms operating within the Barents Region. Funds coming from the respective nations, the EU, international organizations, institutions and private investments all play important roles in the economic development in the region.

National Funding
The Barents Cooperation was initiated by Norway, greatly supported by Finland and Sweden, and welcomed by Russia. It is evident that, due to the oil and gas resources in the Barents Sea, Norway and Russia have great interests in the region. This is also the case for Finland and Sweden, who, as EU members, contribute to the EU Arctic policy.

The existing financial sources are many and are found on regional, national and international level. The Nordic countries have allocated funds to the Barents region in their budgets, as demonstrated below. Russia does not have Barents budget post, however, this does not signify that they are not funding the cooperation. Instead, Russia finances Barents Cooperation projects through different governmental bodies on an ad hoc basis.

Regional and European Funding
The Barents Euro-Arctic Council (BEAC) and the Barents Regional Council (BRC), together with the Council of the Baltic Sea States (CBSS) and the Arctic Council are all regional councils established in the early 90s that encompass the Barents region.

The BEAC and BRC initiate projects through various working groups on relevant issues concerning the region, however the funds for these projects come from the national financing sources or from Nordic or EU programs. The CBSS and the Arctic Council on the other hand have both created their own funding instruments for their projects.

The Nordic Council of Ministers also contributes to Barents Cooperation with both funding to the projects of the councils above, but also by including North-West Russia in 1995.

Private investments
Norwegian business projects in the Russian parts of the Barents region are mostly concentrated to Murmansk, while Karelia is a strongpoint for Finnish companies and Swedish businesses are operating in all regions. Russian foreign investments in the Barents region are currently low – limited to single-person enterprises in Finland, mainly within the tourism sector, while the investments in Norway are larger and focused on fisheries and aquaculture.

More information about Financing of Barents Cooperation:

Report of the BEAC Ad Hoc Working Group on Financial Mechanism Study

Report from Akvaplan Niva

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