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Arctic Yearbook 2013
What Does the Arctic Teach Us?
Trans-National Corporations
TNCs emerge parallel to industrial development, mostly thanks to conditions created by nation-
states (Chandler & Mazlish, 2005). Many TNCs are indeed originally either family firms which have
managed to grow thanks to contracts with governments or other forms of government support or
they are State-Owned Enterprises (SOEs). More precisely, and especially after the 2
nd
World War, at
least in the West governments have created the conditions for TNC growth. But it is after the end of
the Cold War and thanks to globalization that TNCs can, so-to-speak, ―step out of the shadow‖ of
governments and enter the global stage. Again, this move was significantly facilitated by
governments, which pushed for free trade and global market opening (e.g., thanks to the World
Trade Organization), or which helped TNCs enter emerging and developing markets (e.g., thanks to
the World Bank). Today, TNCs account for a significant portion of global GDP and at least half of
global trade is now actually intra-TNC firm trade (UNCTAD, 2007). It is fair to say that, in the
beginning of the 21
st
century, many TNCs had ―freed‖ themselves from their respective
governments; many of them have even overtaken nation-states in terms of economic, and also
political power.
In the
era of diminishing returns
, certain TNCs appear to be doing particularly well. These are the TNCs
that are active in natural resources extraction, especially in the fossil fuel (oil and gas) sector, but also
in the minerals and agricultural sectors, including biofuels. These TNCs especially appear to be
crucial for the pursuit of industrial development and industrial civilization more generally.
Consequently, nation-states increasingly need to rely upon them, given that they are no longer
capable of exploiting these resources in their own country (because of a lack of financial means and
skills) or because the resources are located in more and more remote areas where governments of
industrialized economies do not reach (e.g., Africa).
TNCs, in the
Arctic
, are thus basically a phenomenon of the era of globalization (1980s-2000) and
even more so of the era of diminishing returns (2000 and beyond). To recall, at the end of the Cold
War, climate change made Arctic resources more accessible and thus has allowed TNCs to enter the
Arctic. But this is also the era of liberalization and privatization, especially in Russia, an evolution
that leads to further TNC growth, especially in the natural resources sectors (Roth, 2012).
Furthermore, and as we will see below, TNCs and nation-states, in the age of diminishing returns,
team up with one another for basically two reasons: on the one hand, nation-states see a growing
strategic interest in natural resources, as such resources are essential for the pursuit of their own
(industrial) development (e.g., securitization of natural resources) (Black, 2006; Bruno & Karliner,
2002). Not astonishingly, Russia, for example, has renationalized its natural resources TNCs,
considering that these natural resources account for more than half of its GDP. On the other hand,
and as climate change accelerates, natural resources‘ TNCs see new business opportunities and
approach governments to help them to realize these very opportunities, for example in the case of
Greenland.