Flank or front : an assessment of military-political developments in the High North

Finnish Defence Studies is published under the auspices of the War College, and the contributions reflect the fields of research and teaching of the College. Finnish Defence Studies will occasionally feature documentation on Finnish Security Policy. Views expressed are those of the authors and do not necessarily imply endorsement by the War College.

Political Legitimacy and Ethnocultural Justice. Essays on Public Reason, Democratic Citizenship, and the Rights of Cultural Minorities

In this thesis, I argue that there are public cultural reasons that can underpin public justifications of minority rights of indigenous and national minorities in a constitutionaldemocracy. I do so by tackling diverse issues facing a liberal theory of multiculturalism. In the first essay, I criticize Will Kymlicka’s comprehensive liberal theory of minority rights and propose a political liberal alternative. The main problem of Will Kymlicka’s theory is that it builds on the contestable liberal value of individual autonomy and thus fails to take diversity seriously. In the second essay, I elaborate on the Rawlsian political liberalism assumed here by criticizing Chandran Kukathas’s version of political liberalism as overly accommodating to diversity. In the third essay, I discuss questions of method that arise for a political liberal approach to the moral-political foundations of multiculturalism, and propose a certain understanding of the political liberal enterprise and its crucial standard of reasonableness. In the fourth essay, I dwell on the political liberal ethic of citizenship and propose a strongly inclusionist interpretation of the duty of civility. In the fifth and last essay, I introduce a certain understanding of ethnocultural justice and propose a view on certain cultural reasons as public cultural reasons. Cultural reasons are public when they are based on necessarily established cultural marks of a democratic polity, as specified by the cultural establishment view; and when they are crucial for the societal cultural bases of self-respect of citizens. The arguments in this thesis support, and help to spell out, moral-political rights of indigenous and national minorities as formulated in international legal documents, such as the Declaration on the Rights of Indigenous Peoples (United Nations 2007) or the International Covenant on Economic, Social and Cultural Rights (United Nations 1966).

POLITICAL RISK IN FOREIGN DIRECT INVESTMENT IN THE RUSSIAN ELECTRIC POWER SECTOR

Russia approved ambitious reform plan for the electricity sector in 2001 including privatisation of the country’s huge thermal generation assets. So far the sector had suffered from power shortages, aging infrastructure, substantial electricity losses, and weak productivity and profitability numbers. There was obvious need for foreign investments and technologies. The reform was rather successful; the generation assets were privatised in auctions in 2007-2008 and three European energy companies, E.On, Enel and Fortum, invested in and obtained together over 10% of the Russian production assets. The novelty of these foreign investments serves unique object for the study. The political risk is involved in the FDI due to the industry’s social and economic importance. The research’s objective was to identify and analyse the political risk that foreign investors face in the Russian electricity sector. The research had qualitative study method and the empirical data was collected by interviewing. The research’s theoretical framework was based on the existing political risk theories and it focused to understand the Russian government in relation to the country’s stability and define both macro-level and micro-level sources of political risk for the foreign direct investments in the sector. The research concludes that the centralised and obscure political decision-making, economic constriction, high level of governmental control in economy and corruption form the country’s internal macro-level risk sources for the foreign investors in the sector. Additionally the retribution due to the companies’ home country actions, possible violent confrontations at the Russian borders and the currency instability are externally originated risk sources. In the electricity industry there is risk of tightened governmental control and increased regulation and taxation. Similarly the company-level risk sources link to the unreformed heating sector, bargaining with the authorities, diplomatic stress between host and home countries and to companies and government’s divergent perspective for the profit-making. The research stresses the foreign companies’ ability to cope with the characteristics of Russian political environment. In addition to frequent political and market risk assessment, the companies need to focus on currency protection against rouble’s rate fluctuation and actively build good company-citizenship in the country. Good relationship is needed with the Russian political authorities. The political risk identification and the research’s conclusive framework also enable political risk study assessments for other industries in Russia

POLITICAL ENVIRONMENT AND BUSINESS DEVELOPMENT IN THE ARCTIC Strategic opportunities and threats for Finnish companies

The Arctic environment is changing constantly. There are several factors that constitute to the rate and immensity of the development. The region differs from the surrounding markets that most of the countries in the region have been used to. Therefore the purpose of the study was to understand how the political environment affects Finnish companies’ strategies and business operations. The issues analyzed were the political environment in the region, the business environment and economic development, and the opportunities and threats that the Finnish companies have in Arctic. The main theories were found from strategic management and market analysis tools. The different theories and definitions were gone through in order to understand the context of the study. This is a qualitative study that uses content analysis as its main method of analyzing the data. Therefore the data analyzed was gathered from already existing material and it was analyzed until the saturation point was found. This was done in order to minimize the risks related to using secondary data. The data collected was then categorized into themes accordingly. First the general political environment in the Arctic was studied, especially the Arctic Council and its work as the main political entity. From there the focus shifted to the business environment and the general opportunities and threats that are found from Arctic economic development. China offered another point of view to this as it represented a non-Arctic state with a keen interest on the region. Lastly the two previous objectives were combined and looked through from a Finnish perspective. Finnish companies have a great starting point to Arctic business and the operational business environment gives them the framework with which they have to operate in. As a conclusion it can be said that there are three main factors leading the Arctic economic development; the climate change, the development of technology, and the political environment. These set the framework with which the companies operating in the region must comply with. The industry that is likely to lead the development is the marine industry. Furthermore it became evident that the Finnish companies operating in the Arctic face many opportunities as well as threats which can be utilized, taken advantage of or controlled through effective strategic management. The key characteristics needed in the region are openness and understanding of the challenging environment and the ability to face and manage the arising challenges.