The promise of the geoeconomic Arctic: a critical analysis

Abstract

Due to global climate change, the Arctic is losing its ice cover with two expected economic consequences: new accessible natural resource reserves and opening maritime routes are anticipated to become accessible. As a result, the Arctic is expected to transform into a globally important geoeconomic space. The article approaches the geoeconomic Arctic by asking whether this transformation is plausible and forthcoming. In particular, the article analyzes critically practical challenges for Arctic economic development as well as geopolitical challenges to the region as a favourable investment and operating environment. The article concludes that while the Arctic will develop economically, the pace and scope of developments are likely to remain moderate due to complex challenges, and that the geoeconomic importance of the region may be exaggerated. Furthermore, external geopolitical dynamics can hinder the realization of the geoeconomic potential of the Arctic. Due to various spill-over effects, illustrated by the crisis in Ukraine, the Arctic is not necessarily as stable an investment and operating environment as often assumed.