GLOBAL and Loсal Socio-Economic processes in the North: Proceedings of the
international conference, 18-20 of March 1999. - Part II / Russian Academy of Sciences,
Department of Economics, Kola Science Centre, Institute for Economic Studies. - Apatity,
2001. - 116 p.
RUSSIAN-SCANDINAVIAN COMMERCIAL CO-OPERATION:
RESULTS FROM THE PROJECT _______________________________________
The Russian-Scandinavian Commercial Co-operation (RUSCA) is a joint research
project between the Institute of Economic Studies in Apatity, Norwegian Institute of Urban
and Regional Research in Alta, and Lapland University in Rovaniemi. The aim of the
project is to map the cross-border business co-operation in Barents region; how the trade is
conducted, the importance compared to other activity, what are the institutional,
economical, political and educational obstacles for development of business, and what can
be done to improve the conditions for trade in Barents region. On the basis of the results
from the research project, educational institutions in Norway and Finland have launched an
educational programme for companies.
The RUSCA-project consists of post inquiries and personal interviews of northern
Norwegian, Finish and Swedish companies with cross-border commercial co-operation
towards Northwest-Russia. The inquiries and interviews were made in 1997/98, and are
already published in reports and papers.
Russian part of the study started in late 1998, and the interviews were completed in January
1999. Personal interviews are made of company leaders in Murmansk oblast. The study covers
geographical areas were there are companies with cross-border cooperation. Only Russian
enterprises with present or former cross-border business and ideas with the western part of
Barents region are taken into the study. The "extended Barents region" with Uleeborg and
Vesterbotten regions are used to specify the geographical area of co-operation. We have
retained most of the questions from Norwegian and Finnish study to make it possible to do
comparative analyses between the countries. This allows us to present Russian data from the
study and make some comparisons with the already existing date from Norway, Sweden and
Number of respondents
Personal i nterviews Post inquiry
NORWAY: 83 493
Finnmark, Troms, Nordland Counties
FINLAND: 45 414
Selection of companies in Russian study
Personal interviews are made of 61 company leaders from several towns in Murmansk
region. Over half of the interviews are made in Murmansk, other important cities are Apatity,
Kirovsk and Kola.
All branches are included. Most dominating in cross-border co-operation are the
branches of retail trade and building and construction. The study covers companies of
all sizes (from 2 to 14.000 employees), with production, sale and purchase of products and
services. We will use figures from the year 1997 to make the values comparable with the date
from Finland and Norway.
The RUSCA-project will launch a competence programme in Finland and Norway
to help companies to get the needed knowledge about Russian market and how to operate
cross-border. In East-Lapland are these courses nearly completed, in Northern Norway they
will start in spring 1999.
Information obtained in the course of the survey in companies presents a rich material
for analysis. The questionnaire used for the interviewing contained 69 questions including
question groups on company description: goals and ways of its cooperation with partners
from the Barents region, experience acquired, barriers on the way of cooperation,
estimation of activity of governmental and other organizations on setting up
conditions for cooperation in the Barents region, development prospects. Within this paper
only a small part of the obtained results describing major aspects of transborder business
cooperation can be presented.
General idea about economic interests and goals pursued by companies when looking
for partners in Barents region is given in fig. 1 and 2 (appendix).
Figure 1 gives a comparison of estimation of activities that are the most important
for cooperation in the Barents region by company representatives. Russian companies gave
estimations with respect to any country of the Barents region while Norwegian and Finnish
ones- only with respect to Russian partners.
These data makes it possible to conclude that the main interests correspond to each
other well. It means that the largest number of Russian companies (66 %) noted importance
of commodities import and a large share of Norwegian and Finnish companies is interested
in export of goods (45 and 66 % respectively). Rather high share of companies in all the
considered regions point to importance of export of services (46% in Murmansk region,
37% in Northern Norway, 40% in Lapland).
Resorting to mediator services for transborder contacts is popular. It is shown by the
high share of companies pointed out importance of sales to consumers from their own
country oriented to the West (for Russian companies) and to Russia (for Scandinavian
companies). It is especially typical for Lapland where frequency of such answers is the highest
- 83%. In Murmansk region and Northern Norway these figures are 41 and 40 % respectively.
Use of mediators shows that cooperating parties also have an indirect effect (spin-off effect)
on other companies in their own country and the most developed network of such companies
is in Lapland.
Figure 2 shows data on economic motives and factors companies followed when
established contacts in the Barents region. Access to new markets is the most important factor
irrespective of the country considered. At the same time these factor is prevailing for
businessmen from Northern Norway and Lapland (frequency of answers is 82 and 88 %
Estimation of importance degree of other factors by Russian companies
considerably differs from motives followed by Scandinavian partners. Thus, for Russian
companies the second important factor for establishing business-like contacts is personal
relations in the region (63%). For Norwegian businessmen availability of raw materials
(20%) is the second factor by its importance, while for Finnish it is cheap raw materials
(36%). It should be noted that companies from Murmansk region in contrast to Scandinavian
partners don't have the only obviously marked factor or motive for establishing contacts.
Such answers as "access to western markets" (51%), "more profitable price" (48%),
"possibility to modernize production" (48%) also have
rather high frequency. The absence of motives coincidence when establishing mutual contacts
should be considered as a factor promoting development of cooperative links between
Russian and Scandinavian companies.
Ways of obtaining information and establishing contacts
Obtaining information about foreign market is the necessary step for organizing
transborder relations. Survey results concerning ways of receiving such information are
given in the tableS.
Obtaining information "through other Russian companies" (46%) and "through own
experience" (44%) is the most popular way for Murmansk region's companies. These two
factors are prevailing for Scandinavian companies as well, however, here "own experience"
occupies the first place (75% in Northern Norway and 63% in Lapland).
Role of governmental organizations in providing information is small on all the
territories under consideration. Relative frequency of answers varies from 16% in Murmansk
region to 12% in Northern Norway.
More considerable differences between companies from various parts of the Barents
region are fixed in ways of establishing contacts. As shown in figure 4 companies from
Murmansk region are more active. The highest share (44%) here falls to their own direct
contacts. For Scandinavian enterprises mediation from their own country is prevailing (36%
for Northern Norway and 54% for Lapland).
Evidence of Russian companies being especially active in establishing contacts with
Finnish partners seems interesting. Thus 47% of the Finnish respondents answered that
the Russian partner initiated the contact while Russian companies oriented to cooperation
with Finnish companies pointed out initiative from their western partners in 12% of the
cases (table 1). Data from table 1 also makes it possible to conclude that Norwegians are
somewhat more active in establishing contacts with Russian partners than other
Role of governmental programs in establishing contacts is small in all the considered
countries. However this role is relatively higher in Northern Norway (frequency of answers
is 12% comparing to 8% in Murmansk region and 9% in Lapland).
One of the important tasks of the project was to reveal difficulties and barriers
hampering cooperation development between Russian and Scandinavian companies. This
task was solved by including into the questionnaire a list containing 24 statements about
cooperation conditions each of which respondents should have estimated by 5 alternatives:
"completely agree", "partly agree", "somewhat disagree", "completely disagree", "don't
On the basis of the answers problem hierarchy (range) was formed, i.e. a sequence
from the most important to less significant problems. Comparison of the results of such
estimations by respondents from all the regions participating in the survey is given in table
2. These data in particular point out that the highest frequency is connected to the existing
administrative and legal regulation. Thus, for Russian
companies the most acute are problems connected to imperfection of the Russian legislation
on business issues. The same problem is on the first place for Finnish and Swedish
businessmen. Complaints of respondents from Northern Norway are mostly related to
bureaucratism and sluggishness of the Russian leadership (the 1st place). For Russian and
Finnish businessmen this problem occupies the 3rd place.
Respondents from Murmansk region and Lapland put on the second place problems
connected to the Russian customs legislation, for Swedish respondents this problem is on the
9th place. However it should be noted that such a divergence in estimations by Swedish
respondents can be connected to only few selected companies (about ten).
For all the Scandinavian companies high frequency of answers concerning the problem
of obtaining information is characteristic.
In the group of socio-cultural problems language barrier is of importance for all
companies. Criminal activity in Russia is a significant factor for Swedish and Finnish
respondents, it occupies the 3rd and the 4th places respectively.
In the group of infrastructure problems the most important for Scandinavian partners
are transport and for Russian - problems of financing and insurance.
Thus, it is apparent that in order to set up conditions for intensification of economic
cooperation in the Barents region it is necessary to concentrate first of all on those ones
which are mostly complained about by the direct participants of this process revealed in the
course of survey.
Rouble devaluation effect
Changing exchange rate is an important factor of international economic cooperation.
In order to evaluate how the Russian rouble devaluation started in August 1998 has
affected foreign economic activity of Murmansk region's companies a corresponding open
question was included into the questionnaire. Answers were divided into three groups by
their matter. Estimation of the devaluation consequences has also been divided taking into
account company size depending on number of employees.
As it can be seen from tables 3, of 57 respondents answered this question 41 or 71%
estimated the devaluation as a negative factor for foreign economic activity of their
companies. At the same time small companies were subject to such a negative influence to a
larger extent (28 of 35 companies or 80%).
7 companies or 12.2% answered that they expected to reorient their business which
mainly would mean going from import to export as this activity is much more profitable after
Three of the five large companies (having more than 500 employees) noted that the
devaluation did not effect their foreign economic activity that is obviously related to their
After considering motives and barriers as regards Russian-Scandinavian cooperation
it was interesting to learn about a result of these counteracting forces, i.e. about future
In Table 4 there is given estimation of expected change of cooperation scales with
partners from the Barents region in the nearest future by respondents from Murmansk
region. These data are given taking into consideration industry a company belongs to.
In general most of the respondents are optimistic about future cooperation
prospects. Thus 69 of those answering this question 38 (63%) expect that it will
extend in the nearest future. 3 (5%) of he companies expect that relations will end, and
6 (10%0 of the companies expect decreasing cooperation. The rest 22% suppose to keep
the intensity of contacts.
If to consider plans of the companies taking into consideration the industry they
belong to, it can be noted that 2 of 3 companies expecting ending business
cooperation relate to trade. It is obvious, that it is connected to the rouble devaluation and
caused by it worsening conditions for import of goods. At the same time even under
these conditions most of commercial enterprises (7 of 10) expect expanding cooperation in
the Barents region.
Expectations of most of representatives of such important for Murmansk region
industries as fishing, mining, forest, transport and communication are optimistic.
However 2 of 4 companies of fishing industry expect decreasing cooperation.
Briefly the survey results can be described as follows:
1. Preconditions promoting Russian-Scandinavian economic cooperation between
companies in the Barents region are lack of coincidence of motives for setting up such
links. On the one hand this is the interest of most of Russian companies - participants
in foreign economic activity in import of high quality commodities, in entering the
world market through such connections, in possibility to modernize production. On
the other hand, Scandinavian companies are first of all interested in access to sources
of cheap raw materials and labour force though the first factor considerably prevails.
2. When establishing contacts companies of the both cooperating sides either rely upon
their own efforts and experience or resort to help of other companies. Governmental
programs play a negligible role in both providing information and the process of
establishing contacts. It has been revealed that Russian companies are more initiative
when establishing contacts.
3. The most difficulties for development of Russian-Scandinavian cooperation are
caused by imperfection of the Russian legislation and in particular by customs
regulations, by "bureaucratism and sluggishness of the Russian government".
Dissatisfaction connected to the problem of obtaining the necessary information as
well as the conditions of transport are typical for Scandinavian companies. Language
barrier, criminal activity in Russia, imperfection of financing and insurance systems
in the Russian part of the Barents region are indicated among important problems.
4. About 72% of the interviewed Russian companies noted negative influence of the
rouble devaluation on their foreign economic activity.
5. In spite of the existing barriers a rather optimistic estimation concerning future
development of their connections with the Barents region prevails among the Russian
respondents. About 63% of the companies participating in the survey expect
cooperation growth and 21% - its keeping at the previous level.
Figure 1. Importance of activities of the total trade to Barents region (important/ some importance)
Figure 1. Importance of activities of the total trade to Barents region (important/ some importance)
Figure 2. Economic motives (factors) among enterprises for developing business relations to partners from Barents region
Figure 3. The way of establishing new business contacts with partners in the Barents region
Figure 4. The way of establishing business contacts with partners
Table 1 The way of establishing new business contacts with partners in the Barents
region by Russian enterprises depending on partner's country
Contact form Percent in Including having partners
average in Finland 1 in Norway in Sweden
Direct contact with the 44 46 39 47
Through other Russian 28 32 32 31
On fairs and/or seminars 20 20 20 21
The western partner 13 12 18 16
Through other foreign 10 10 7 5
Through public programs 8 8 9 16
Number of enterprises in (61) (50) (44) (19)