In this corner of Norway’s far north, just five miles from the border with Russia, road signs give directions in Norwegian and Russian. The local population is used to traveling from one country to another without a visa: Norwegians to fill up with cheap Russian petrol; Russians to hit the Norwegian malls.
A few years ago, those cross-border ties inspired Terje Jorgensen, the director of the Norwegian port of Kirkenes, to propose closer ties with the Russian port of Murmansk to build on the growing interest in Arctic shipping lanes connecting Asia with Western Europe. He wanted to develop joint standards for sustainability and easier transport between the two ports.
But then President Vladimir V. Putin sent his troops to Ukraine, bringing the whole project to a halt.
“It could have been developed into something,” Mr Jorgensen said of his preliminary talks with the Russians. “But then the war came and we removed the whole thing.”
The war may be more than a thousand miles south, but it has created a rift in this part of the world that had prided itself on being a place where Westerners and Russians got along. Over the past year, business, cultural and environmental ties have been frozen as borders have been hardened as part of efforts to punish Moscow for its brutal war in Ukraine.
In Kirkenes, a town of 3,500 around the small port, security fears have upended a business model centered on cross-border ties.
On a recent weekday, no customers braved the chilly June wind in the small downtown area. In the nearby mall, elderly Norwegians shopped at the pharmacy while a lone tourist from Germany looked for rainwear.
Some retail chains, which have moved here in part to sell their wares to Russians eager for Western brands and appliances, have warned they may pull out of Kirkenes, said Niels Roine, the head of the regional Chamber of Commerce. That would further weaken a retail sector that has seen a 30 percent drop in sales since the start of the war.
‘Turning to Russia’ was an economic strategy
The deepening divide between the two countries is a rebuke to Norway’s policy, which was introduced in the 1990s after the dissolution of the Soviet Union to encourage business leaders to look east. Two malls quickly sprang up to serve Russians looking for Western clothing, gifts, disposable diapers and alcohol.
“It was a local, regional and national strategy to focus on Russia’s direction,” said Mr. Roine.
More than 266,000 people from Russia crossed the nearby border station into Norway in 2019; last year that number fell by more than 75 percent. Cross-border hockey matches and student wrestling matches have come to a standstill and the Arctic Council, a multinational forum promoting partnerships in the region, has been disrupted.
At the same time, Russian can still be heard in the streets, and Russian fishermen, who are drawn to nearby waters by cod and other species, are allowed to moor in the harbor, although they are no longer allowed to visit the shops and restaurants in the harbor. Kirkenes and two other Norwegian ports and their ships are being searched by the police.
For decades, the huge stocks of cod in the Barents Sea – home to one of the world’s last remaining fish stocks – have drawn people and businesses from both countries to this Arctic Circle community. According to government figures, Norwegian fishermen alone will have landed $2.6 billion worth of fish by 2022. Kirkenes’ main industrial employer is Kimek, a shipbuilding company that prospered by repairing commercial fishing boats known as trawlers, especially the Russian ones.
The reverberations of war
A shared interest in preserving cod stocks led to a unique bilateral agreement reached during the Cold War. The cod tends to spawn in Russian waters, but then mature in Norwegian waters. Fishermen from Russia are allowed to catch their quota of cod in Norwegian waters in exchange for not catching the young cod in their own national waters.
“The most important fish stocks migrate through the zones of both countries,” said Anne-Kristin Jorgensen, a researcher at the Fridtjof Nansen Institute, which focuses on international environmental, energy and resource management.
“Norway and Russia need to work together to manage them if they want to keep fishing,” said Ms Jorgensen. “Both parties know this is necessary.”
But that agreement is under pressure. Last year, Oslo restricted the access of the Russian trawlers to only Kirkenes and two other ports. And this spring, as fears lurked that Russians could, under the guise of fishing, sabotage critical infrastructure such as submarine cables, Norwegian authorities cracked down on the services they could receive at the port. Only essentials, such as fuel, food and emergency repairs, are now allowed.
That caused tremors through the Kimek shipyard, the largest industrial employer in the region. The towering building is visible from almost anywhere in the city.
In June, the boat repair company said the restrictions had led it to lay off 15 people.
“I am concerned, for all of you talented employees and family members, but also for what society will look like here in a few years,” Kimek CEO Greger Mannsverk said in a statement announcing the layoffs. “I hear that many other companies here are noticing the decline in trade and turnover and that they are also considering measures to reduce costs.”
‘We’ve had a lot of shifting politics here’
Mr Mannsverk, who declined requests for an interview, is not the only official concerned about the region’s future.
“We are dealing with a very dramatic situation here,” says Bjorn Johansen, regional head of LO, Norway’s influential trade union. He mentioned a number of crises the area has faced, including the loss of jobs when an iron ore mine closed in 2015 and the coronavirus pandemic. “And now,” he added, “the door to Russia has been closed for many, many, many years.”
Some companies have cut ties with Russia and are working to expand beyond its giant neighbor to the east. One of these is Barel, a maker of specialized electronics used in offshore vessels and aircraft, founded 30 years ago in Kirkenes. After the closure of the factory in Murmansk due to the Russian invasion, the company aims to expand production in Norway. The company prides itself on its location near the Barents Sea and sells it as a unique asset, but finding workers is a challenge.
After the Russian invasion of Ukraine, Barel brought Russian workers willing to move across the border, but it needs 15 more workers to reach its goal of 50, said Bard Gamnes, the company’s CEO.
“We are trying to focus on the coastal areas where fishing work is declining and show that although we are a high-tech company, much of what we do is actually manual labor,” Mr Gamnes said in an interview in Barel’s boardroom, above the factory floor from the company.
Kenneth Sandmo, head of corporate and industrial policy at the LO trade union, pointed out that such a skilled workforce is essential for maintaining a stable local economy. Tourism jobs, which are often seasonal and pay less, have less impact, he said.
“If you have 80 people who have manufacturing jobs, that creates 300 more jobs in the community,” Mr Sandmo said. “You don’t find that in tourism.”
Yet the Snowhotel in Kirkenes lures guests year-round to sleep in lavishly decorated rooms that resemble igloos — the hotel recommends long underwear even in high summer — and Hurtigruten cruise ships drop travelers off at Kirkenes as the final stop on their journey along the Norwegian coast.
Hans Hatle, the founder of Barents Safari, a travel company, spent years as an army officer training guards to defend Norway’s border with the Soviet Union. He now accompanies tourists by boat to the same border and talks about the role of the Russians and Finns in the region.
“We’ve had a lot of political shifts here,” he said, standing on a rock on the edge of Western Europe. With warming temperatures making popular destinations in Spain and Italy unusually warm, he is confident that Kirkenes has a bright future as a tourist destination.
“We have to keep thinking in new ways,” Mr Hatle said. “But I’m confident we’ll make it.”
