The economy of the North – and Beyond

The geopolitical situation surrounding the Arctic is rapidly changing. By 2025, the region has become a pivotal point in global strategic competition, where the interests of the United States, China, and Russia increasingly intersect and collide. The Arctic is no longer perceived exclusively as a frontier of untapped resources — it has transformed into a contested space for security, logistics, climate governance, and political influence. Finland, as an Arctic state on the front lines, is compelled to navigate a multipolar environment with growing regional tensions and diminishing institutional predictability.

The region is gaining significance not only in economic terms but also in military, environmental, and diplomatic dimensions. Major powers are simultaneously reassessing their strategic approaches, testing new models of cooperation, and considering a return to more traditional formats of engagement. The Arctic Council, once a cornerstone of multilateral governance, no longer functions in its original form. Its paralysis has deepened the strategic vacuum, increasing the risks of unilateral actions and regional competition. The decline in cooperation is particularly evident in stalled climate initiatives, suspended indigenous forums, and the freezing of Arctic scientific diplomacy.

In the spring of 2025, significant changes in the Arctic strategies of major powers became apparent. The Arctic has become a battleground for intensified geopolitical competition, institutional fragmentation, and the transformation of great power strategies.

Russia

By 2025, Russia’s Arctic policy is oriented towards the internal development of the region as a response to international isolation and sanctions pressure. Despite external restrictions, Russia continues to implement ambitious projects in the Arctic, particularly in the fields of energy, logistics, and the exploitation of strategic resources, supported by Chinese investments. This has become part of a new Arctic strategy, presented in April 2025, which emphasizes a mobilization approach and centralized governance.

Russia’s main priority is the development of the Northern Sea Route (NSR) as a transcontinental transport corridor fully controlled by the state. Projects to expand cargo flow, modernize ports, and build an icebreaker fleet are integrated into the creation of the Arctic railway corridor, which aims to reduce dependence on traditional transport routes. However, questions remain regarding the sustainability of its economic model and the potential logistical burden of these projects.

In the social sphere, the focus is on stabilizing the population in the Arctic through housing programs, digital medicine, and tourism development. These measures create an image of the region as a comfortable living space, though at present they remain primarily at the planning stage.

In the context of changes in international scientific and environmental frameworks, Russia continues to enhance the development of strategic raw materials, including rare earth metals, through projects such as “Geology: The Revival of a Legend.” However, these initiatives are associated with significant ecological and technological risks with limited international expertise.

The forum in Murmansk, held in March 2025, marked an important step in adjusting Russia’s strategic priorities in the Arctic. This event highlighted the importance of a mobilization approach and centralized governance, confirming a shift towards a more inward-focused development model.

Russia’s foreign diplomacy in the Arctic is aimed at seeking new partners through forums and bilateral agreements. However, most of these initiatives remain declaratory and lack clear implementation mechanisms.

China

Like Russia, China is taking steps to adjust its Arctic policy, with an emphasis on balance and sustainability. These changes are largely driven by the uncertainty created primarily by the actions of the United States. In this context, China is clearly aiming to take a more cautious and measured position, much like Russia, adapting its strategy in response to the evolving geopolitical reality.

One notable confirmation of this course is the publication in March 2025 of the “Arctic Blue Book: Report on the Development of the Arctic Region (2023–2024),” prepared by the Center for Polar Studies at the Ocean University of China. The book emphasizes the importance of China’s adaptation to new geopolitical conditions and outlines tasks such as actively monitoring key mineral resources in the Arctic, strengthening control over Chinese investments in the region, and developing early warning and risk response mechanisms for Arctic investments.

China highlights scientific diplomacy as an important and neutral channel to maintain its presence in the Arctic. Unlike its previous focus on infrastructure expansion, the emphasis now is on ecological responsibility and a more cautious approach to political issues in the region. Special attention is given to interdisciplinary research, sustainable shipping, emission reduction, and the protection of the rights of indigenous peoples.

Finland

Finland, as one of the Arctic state, directly feels the impact of the changes occurring in the region. On the one hand, climate change and geopolitical shifts open up new opportunities for resource development and infrastructure investments, which could significantly strengthen the country’s economy. On the other hand, changes in the political and military situation, as well as uncertainty in decisions made by the United States and Russia, create risks that require careful assessment.

In these conditions, Finland must act flexibly and promptly adapt its Arctic strategy. The need for reassessing and updating the Arctic strategy is highlighted by numerous experts. The strategy should combine economic foresight, ecological responsibility, and strategic resilience, while also providing for timely and rapid adjustments in response to changing geopolitical conditions.

Conclusion

Key questions now arise for research: how are the Arctic policies of Russia, China, and the United States transforming? What are the consequences of weakening multilateral institutions and accelerating militarization in the Arctic region? What forms of cooperation remain viable — and under what conditions?