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Arctic Yearbook 2013
What Does the Arctic Teach Us?
In the era of
diminishing returns,
the relationship between the nation-state and TNCs (or more
generally the relationship between business and government) changes again, at least in the case of
natural resources, be they non-renewable (oil, gas, coal, minerals) or renewable (agriculture, forestry,
bio-fuels) (see: Sawyer & Gomez, 2012). Indeed, governments increasingly seem to realize that they
are essential, not only for their economic prosperity if they have them within their territories, but
more importantly for their own survival, especially if they do not have them. In other words,
governments increasingly start to look at natural resources, especially oil, gas and minerals, in
strategic terms. Yet, in most cases, especially when it comes to investments and operations,
governments are entirely dependent upon the TNCs. On the other hand, TNCs active in the
extractive industries are also dependent upon governments, namely when it comes to access to
resources (e.g., concessions), as well as the contracts to extract and process them (e.g., operations).
In other words, in the age of diminishing returns, governments and TNCs again need each other,
but this time it takes the form of a long-term strategic relationship. More generally, this relationship,
in the age of diminishing returns, now takes the form of a ―true partnership‖, where neither partner
can exist without the other. In short, nation-states and TNCs are now Siamese twins: they will either
live together or both die. This is the latest stage of business-government relations.
TNC-State Relations in the Arctic
The Arctic is the region in the world where today‘s typical business-government relationship can be
observed in its most pure form, i.e., the
Siamese partnership
that is characteristic of the era of
diminishing returns. On the one hand, TNCs need and get concessions from the governments for
resources exploration and exploitation. They also get guarantees for the risks they take and whose
bill they could probably not foot (e.g., oil spills). On the other hand, and in return, TNCs invest and
operate, as well as let governments have a negotiated percentage of the proceeds. It is obvious that,
without TNCs, Arctic governments would not be able to access and sell their resources. This is even
true of a country like Russia, where their own SOEs need foreign competencies and even
investments in order to play the role their own government assigns them. Yet it is also true that the
same TNCs would not be able to operate in the Arctic without government support and protection,
considering, for example, that the Arctic remains a highly militarized area.
The extreme case of such ―Siamese twinning‖ between TNCs and nation-states is the SOE, of
which the Arctic offers very good examples. To recall, the three SOEs that are the most aggressive
explorers and soon exploiters of Arctic resources are Statoil from Norway, as well as Gazprom and
Rosneft from Russia. It is in these SOEs that the national and commercial interest come together in
the most typical way. These and other SOEs – which behave like TNCs yet are state-owned –
prefigure, in my view, best how close the ties between governments and business will become in the
future.
The case of
Greenland
also deserves a particular mention here. Greenland is a newly (almost)
independent country, majoritarily inhabited by indigenous peoples (57,000 inhabitants). Greenland
does already have sovereignty over its natural resources, which aims to exploit so as to become a
full-fledged nation-state. While it would not have to exploit these resources for the well-being of its