February 2016 ISSUE no. 1 Martin Schulz The refugee crisis is an opportunity for Europe’s governments to get their act together Kenji Shinoda Arctic collaboration: Japan as catalyst for Barents Region cooperation Tero Vauraste Polar bridging of East and West through North To receive a free copy, register at www.utu.fi/pei The Pan-European Institute publishes the Baltic Rim Economies (BRE) review which deals with the development of the Baltic Sea region. In the BRE review, public and corporate decision makers, representatives of Academia, as well as several other experts contribute to the discussion. Pan-European Institute ISSN 1459-9759 Editor-in-Chief | Kari Liuhto (responsible for writer invitations) Technical Editor | Elisa Aro University of Turku Turku School of Economics Pan-European Institute Rehtorinpellonkatu 3 FI-20500 TURKU, Finland Tel. +358 2 333 9567 www.utu.fi/pei 29.2.2016 Baltic Rim Economies ISSUE # 1 expert articles Martin Schulz 4 Barry D. Mowell 22 Mykhailo Gonchar 45 The refugee crisis is an opportunity Defenses bolstered in Baltic States Natural gas transit through Ukraine for Europe’s governments to get their and Eastern Europe amid mounting under the conditions of hybrid warfare act together security concerns Kristi Raik 46 Kimmo Tiilikainen 5 Christoph Berlich 24 Ukraine has brought threat Nutrient recycling: towards a cleaner Cyber-security cooperation in the perceptions of the Baltic Sea states Baltic Sea Baltic States: an example for closer to each other European cyber-security integration Bodil Valero 6 Sergiy Kurbatov 47 Don’t return to the (c)old security GENE ZOLOTAREV 25 Broken “brotherhood”? The dramatic order The Baltic Times and media changes in mutual attitudes among development in the Baltic States Ukrainian and Russian population in Saara-Sofia Sirén 7 2013-2015 Could Circular Economy save the Esa Hämäläinen 29 Baltic Sea? Forecasting the costs of maritime Hanni Hyvärinen 48 logistics: challenges continue Helping Ukrainian IDPs Mika Kari 8 Towards active cooperation in Paul Gregory 30 Nina Tynkkynen 49 defence The Putin regime jousts with Russia and international international law environmental politics: lessons to Charles C. Adams, Jr. 9 learn from the Baltic Sea cooperation T-TIP: a historic opportunity to jump Hans van Koningsbrugge 33 start the Finnish economy Russia and the Netherlands: just Hanna Lankinen 50 good friends? Finland offers broad palette of Hanna Lehtinen 10 investment opportunities Finland and Poland: neighbours Igor Gurkov 34 united by the Baltic Sea Foolishness, obstinacy or wisdom? Jānis Ikstens 51 Recently opened Russian factories of AAA Przemysław Grudziński 11 Western MNC Polish CBSS presidency: building Risto Hiekka 52 block for today and future Baltic Sea Andrey Terekhov & Stanislav Tkachenko 35 Latvian economy as a business cooperation Political economy of Russia’s IT environment for a Nordic SME sector company Andris Teikmanis 13 Latvian-British relations Rolf Fredheim 37 Sigitas Brazinskas 54 What kind of control does Putin have Role of regional integration in market Kenji Shinoda 14 over Russian media? selection: the case of SMEs Arctic collaboration: Japan as catalyst for Barents Region Petr M. Mozias 38 Lidia Danik & Izabela Kowalik 55 cooperation Russia: this time is different The Polish international new ventures: strategies and success Tero Vauraste 15 Dmitry Zimin 40 factors Polar bridging of East and West The Solovetsky Islands: challenges through North of economic development Marian Gorynia, Jan Nowak, Piotr Trąpczyński & Radosław Wolniak 56 Päivi Nerg 17 Veera Laine 41 FDI from Central and Eastern Refugee issue and Finland Shifting dynamics in the Russian Europe: the Polish perspective civil society Alexander Khudilainen 18 Tiia Vissak 57 Maija Penttilä 42 Federal Target Programme of the Estonian evidence on exporters’ Republic of Karelia: new perspectives Russian-speaking Evangelical nonlinear internationalization for the region and investors communities in the Helsinki metropolitan area Irina Rannak 59 Madis Tilga 19 Socio-cultural identification of Claes G. Alvstam 43 Beyond green growth: bioregions Russian-speaking population of The external trade relations Rauli Svento, Matti Sarén & Estonia in the evolution of tourism between the EU and the Russian Jouko Niinimäki 20 activity Federation: no energy outside energy The University of Oulu: new Liudmila Voronova 60 Thomas Pellerin-Carlin 44 solutions in the middle of hard The mediated “Russian world”: structural changes Ensuring the EU energy security gender perspective vis-a-vis Russia Andrey Shapenko 21 Responding to challenges: how business schools can stay competitive in the 21st century 3 www.utu.fi/pei 29.2.2016 Baltic Rim Economies ISSUE # 1 Martin Schulz The refugee crisis is an opportunity for Europe’s governments to get their act together Expert article • 1904 hen a relationship between people is strained it is of- The refugee crisis brought to the surface in a very tangible way ten the small issue which definitively blows the ties the distrust between European nations that has been simmering be- apart. The same could happen to the European Un- neath for a while. The danger is that this will be the opening of a ion through the refugee crisis which, although being Pandora’s box of disintegration. As we see from the progressive un- the single biggest drama in the lives of the individuals ravelling of Schengen, it would be naive to underestimate this very Wrisking their lives, should in theory be a minor issue for the Euro- real possibility which some would argue is already on the march. But pean Union which is on the receiving end. Instead, what is essentially there is also an opportunity that, with a tangible problem on our hands a humanitarian crisis, risks also being the catalyst for an existential which exposes the EU fundamentals to a brutal assault, there will be crisis for the cooperation we have become so used to through the a very concrete reason to tackle the underlying problems head on. European Union. Contrary to the pervasive gloomy outlook, I genuinely believe that As things stand, solidarity between EU countries, and freedom the current crisis offers an opportunity. First of all because there is of movement, two of the most essential building blocks of our coop- already a comprehensive plan on the table on how to deal with it. eration are fundamentally threatened. Secondly because fundamental prin- EU governments have been driven ciples of the EU are at stake which to a panic and beggar thy neighbour Contrary to the pervasive hardly anyone wants to do away with. policies by the arrival of 1 refugee for Thirdly because from the start of the every 500 European citizens. Putting gloomy outlook, I new Commission led by Jean-Claude the number of refugees who arrived Juncker there is a renewed push for a in the EU last year in such a context genuinely believe that the reform of how the EU works and espe- clearly shows that there is no rational cially what it does. This reform will go reason for the public policy reactions current crisis offers an some way in addressing the grudges which are coming from numerous EU and misconceptions from the main- countries. Rather, the driving force is opportunity. stream that have arisen against the unfounded fear which populist forces EU and that have polluted the political are so able at whipping up as part of their strategy of providing sim- landscape for too long. plistic and elusive answers to the challenges we are facing. Taken together we are faced with a pressing problem with a very Properly shared among the EU member states, the refugees flee- visible face and which needs a joint response coupled with a broad ing the Syrian conflict pose no threat to any population, culture or political acknowledgement that cooperation through the EU can no belief. There may be the isolated cases of individuals thinking that longer be taken for granted, and must be reinvigorated through a re- they can abuse the welcome they receive by engaging in improper think. In my eyes this clearly provides mainstream forces the needed behaviour or even criminal acts. These persons must be dealt with drive to press ahead in taking action. Action will require willpower and speedily and with the full force of the law. But we must not amalgam- will not happen on its own but the situation clearly puts decision mak- ate this tiny minority of people with the vast majority of those who are ers in front of their responsibilities and I hope that they will rise to the law abiding people, genuinely fleeing horror and ready to integrate occasion. into the community receiving them. The opportunity to grab the metaphorical bull by the horns is The European Commission has set out a clear plan for effectively therefore there. The danger is that if the mainstream is unwilling to dealing with the refugee crisis based on a refugee relocation sys- step up to the task citizens will continue to be tempted by the tantalis- tem which would spread arriving refugees fairly across the EU, better ingly simple solutions offered by populist, racist and xenophobic politi- joint policing of the EU’s external borders, and the premises for a cians. comprehensive EU migration policy. The European Parliament has wholeheartedly backed these initiatives as an important step in right- Martin Schulz ing the existing structures in place which are clearly a messy, unfair President and incoherent system for dealing with refugees and migrants. An The European Parliament important number of governments however choose to play the easy card, refusal, particularly concerning the most pressing issue of relo- cation. Rather than leading their electorate by fighting to steer public opinion and explaining, they are choosing to pander to the political forces sowing fear, shifting all blame onto the EU. 4 www.utu.fi/pei 29.2.2016 Baltic Rim Economies ISSUE # 1 Kimmo Tiilikainen Nutrient recycling: towards a cleaner Baltic Sea Expert article • 1905 rotection of the Baltic Sea has always been a key priority for Promoting the recycling of nutrients is an ongoing learning pro- Finland, especially concerning the use of the Sea and for cess.