In this corner of Norway’s far north, just five miles from the Russian border, road signs give directions in Norwegian and Russian. Locals are used to crossing from one country to another visa-free: Norwegian to fill up on cheap Russian fuel; Russians who go to 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 cross- Arctic shipping routes, connecting Asia with Western Europe. He wants to develop joint standards for maintenance and easier transportation between the two ports.
But then President Vladimir V. Putin sent his troops marching into Ukraine, halting the entire project.
“It may have built into something,” Mr. Jorgensen said of his initial discussions with the Russians. “But then the war came, and we scrapped the whole thing.”
The war may be more than a thousand miles to the south, but it has created a gulf in this part of the world, which prides itself as a place where Westerners and Russians can get along. Over the past year, business, cultural and environmental ties have stalled as borders have hardened, part of efforts to punish Moscow for its brutal war in Ukraine.
In Kirkenes, a town of 3,500 built around a small port, security fears have changed a business model focused on cross-border relations.
On a recent weekday, no shoppers braved the chilly June air in the tiny downtown. In a nearby mall, elderly Norwegians shop at the pharmacy while a lone tourist from Germany looks for rain gear.
Some chain stores, drawn here in part to sell their wares to Russians eager for Western brands and appliances, have warned they may leave 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 profits since the war began.
The ‘turn towards Russia’ is an economic strategy
The widening gap between the two countries is a rebuke to Norway’s policy, instilled after the breakup of the Soviet Union in the 1990s, to encourage business leaders to look east. Two shopping centers soon sprung up to serve Russians looking for Western clothes, gifts, disposable diapers and alcohol.
“It’s a local, regional and national strategy to focus on turning towards Russia,” Mr. Roine said.
More than 266,000 people from Russia crossed the nearby border station into Norway in 2019; last year, that number dropped by more than 75 percent. Cross-border hockey games and wrestling matches between students stopped, and the Arctic Councila multinational forum promoting cooperative ventures in the region, was disrupted.
At the same time, Russian can still be heard in the streets, and Russian fishermen, brought to the nearby waters by cod and other species, are allowed to tie up in the harbor, although they are no longer allowed to visit the shops and restaurant in Kirkenes and two other Norwegian port cities and their ships were searched by police.
For decades, the abundant cod in the Barents Sea — home to one of the world’s last surviving fish stocks — has brought people and businesses from both countries to this Arctic Circle community. Norwegian fishermen alone landed fish worth $2.6 billion in 2022, according to government figures. Kirkenes’ most important employer in the industry is Kimek, a shipbuilding company that prospered by repairing commercial fishing boats known as trawlers, especially Russian ones.
The sounds of war
The shared interest in maintaining cod stocks gave rise to a unique bilateral agreement made during the Cold War. Cod usually spawn in Russian waters but then reach adult size in Norwegian waters. Fishermen from Russia are allowed to catch their quota of cod in Norwegian waters in exchange for not catching juvenile cod in their own national waters.
“Major fish stocks move between 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 have to work together in managing them if they want to continue fishing,” said Ms. Jorgensen. “Both parties know this is necessary.”
But that agreement is strained. Last year, Oslo limited the access of Russian trawlers to only Kirkenes and two other ports. And this spring, as fears simmered that the Russians might, under the guise of fishing, sabotage critical infrastructure such as undersea cables, Norwegian authorities cut off the services they would receive at the port. Only necessities, such as refueling, food and emergency repairs, are now allowed.
That sent tremors through the Kimek shipyard, the largest industrial employer in the region. Its tall building can be seen almost everywhere in town.
In June, the boat repair company said the restrictions had led to the layoff of 15 people.
“I am worried, for all of you good employees and family members, but also for what society will look like here in a few years,” Greger Mannsverk, chief executive of Kimek, said in a statement announcing layoffs. “I hear that many other businesses here are noticing a decline in trade and turnover, and that they are also considering measures to tighten costs.”
‘We have a lot of political change here’
Mr. Mannsverk, who declined requests for an interview, is not the only official concerned about the region’s future.
“We are facing a very dramatic situation here,” said Bjorn Johansen, the regional head for LO, Norway’s influential trade union. He referred to several crises faced in the area, including the loss of jobs when an iron 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 businesses have cut ties with Russia and are trying to expand away from the giant neighbor to the east. One of those is Barel, a manufacturer of specialized electronics used in marine vessels and aircraft, founded in Kirkenes 30 years ago. After closing its Murmansk plant following the Russian invasion, it aims to expand production in Norway. The company is proud of its location near the Barents, selling it as a unique asset, but finding workers is a challenge.
After Russia’s invasion of Ukraine, Barel brought in Russian workers willing to move across the border, but it still needs another 15 workers to reach its goal of 50, said Bard Gamnes, the company’s chief executive.
“We’re trying to target coastal areas where fishing jobs are declining and show them that even though we’re a high-tech business, a lot of what we do is really manual labor,” Mr. Gamnes in an interview in Barel’s boardroom, upstairs from the company’s store.
Kenneth Sandmo, the head of business and industrial policy at the LO union, pointed out that such skilled labor jobs are essential for maintaining a strong local economy. Tourism jobs, which are often seasonal and lower paid, have had less of an impact, he said.
“If you have 80 people working in the industry, that creates an additional 300 jobs in the community,” Mr. Sandmo said. “You don’t see that in tourism.”
However, the Snowhotel in Kirkenes attracts guests all year round to sleep in rooms elaborately decorated to resemble igloos — the hotel recommends wearing long underwear even in summer — and the Hurtigruten cruise ships bring travelers to Kirkenes as the last stop on their journey along the coast of Norway.
Hans Hatle, the founder of Barents Safari, a tour company, spent many years as an army officer training guards to defend Norway’s border with the Soviet Union. He now escorts tourists by boat to the same border, telling the story of the role of Russians and Finns in the region.
“We’ve had a lot of political changes here,” he said, standing atop a rock on the edge of Western Europe. With warming temperatures making popular destinations in Spain and Italy hot, 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 can do it.”