In this corner of Norway’s far north, just five miles from the border with Russia, road signs give directions in Norwegian and Russian. Locals are used to crossing from one country to the other visa-free: Norwegians to fill up on cheap Russian gasoline; 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 surging interest in cross-Arctic shipping routes, which connect Asia to 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 marching into Ukraine, bringing the whole project to a halt.
“It could have been developed into something,” Mr. Jorgensen said of his preliminary discussions with the Russians. “But then came the war, and we deleted the entire thing.”
The war may be more than a thousand miles south, but it has created a chasm in this part of the world, which had prided itself as a place where Westerners and Russians could get along. Over the last year, business, cultural and environmental ties have been frozen as borders have stiffened, part of efforts to punish Moscow for its brutal war in Ukraine.
In Kirkenes, a town of 3,500 built around the small port, security fears have upended a business model focused on cross-border ties.
On a recent weekday, no shoppers braved the chilly June wind in the tiny downtown. At the nearby mall, older Norwegians shopped in the pharmacy as a lone tourist from Germany looked 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 might 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 revenue since the war began.
‘Turning toward Russia’ was an economic strategy
The widening separation 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 promptly 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 turning toward Russia,” Mr. Roine said.
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 games and wrestling matches between students have ground to a halt, and the Arctic Council, a multinational forum that promotes cooperative ventures in the region, has been disrupted.
At the same time, Russian can still be heard in the streets, and Russian fisherman, drawn to nearby waters by cod and other species, are allowed to tie up at the port, although they are no longer allowed to visit the shops and restaurants in Kirkenes and two other Norwegian port cities and their ships are searched by the police.
For decades, the vast amounts of cod in the Barents Sea — home to one of the world’s last surviving stocks of the fish — have drawn 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’s most important industrial employer is Kimek, a shipbuilding company that has prospered by repairing commercial fishing boats known as trawlers, especially the Russian ones.
The reverberations of war
A shared interest in maintaining the cod stocks yielded a unique bilateral agreement forged during the Cold War. The cod tend to spawn in Russian waters but then reach adult size in Norwegian waters. Fishermen from Russia are permitted to catch their quota of cod in Norwegian waters in exchange for not catching the young cod in their own national waters.
“The main fish stocks migrate across both countries’ zones,” said Anne-Kristin Jorgensen, a researcher with the Fridtjof Nansen Institute, which focuses on international environmental, energy and resource management.
“Norway and Russia have to cooperate in managing them if they want to continue fishing,” Ms. Jorgensen said. “Both parties know that this is necessary.”
But that agreement is coming under strain. Last year, Oslo limited the Russian trawlers’ access to only Kirkenes and two other ports. And this spring, as fears simmered that Russians, under the guise of fishing, could sabotage critical infrastructure like sub-sea cables, Norwegian authorities cracked down on the services they could receive in port. Only necessities, such as refueling, food and emergency repairs, are now allowed.
That sent tremors through the shipyard of Kimek, the largest industrial employer in the region. Its towering building is visible nearly everywhere in town.
In June, the boat repair company said the restrictions had led it to lay off 15 people.
“I’m worried, for all of you talented employees and family members, but also for what society here will look like in a few years,” Greger Mannsverk, Kimek’s chief executive, said in a statement announcing the layoffs. “I hear many other businesses here are noticing the decline in trade and turnover, and that they are also considering measures to tighten expenses.”
‘We’ve had a lot of shifting politics here’
Mr. Mannsverk, who declined requests for an interview, is not the only official worried about the region’s future.
“We are facing a very dramatic situation here,” said Bjorn Johansen, the regional head for L.O., Norway’s influential labor union. He ticked off 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 is closed for many, many, many years.”
Some businesses have cut ties to Russia and are working to expand away from the giant neighbor to the east. One of those is Barel, a maker of specialized electronics used in offshore vessels and aircraft, founded in Kirkenes 30 years ago. After shutting its plant in Murmansk following the Russian invasion, it is aiming 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 Russian workers who were willing to relocate 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 are trying to target the coastal areas where work in fisheries is dropping and showing them that even though we’re a high-tech business, a lot of what we do is actually manual labor,” Mr. Gamnes said in an interview in Barel’s boardroom, above the company’s shop floor.
Kenneth Sandmo, the head of business and industry policy at the L.O. union, pointed out that such skilled labor jobs were 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 working jobs in industry, that will create an additional 300 jobs in the community,” Mr. Sandmo said. “You don’t find that in tourism..”
Still, the Snowhotel in Kirkenes lures guests year-round to sleep in elaborately decorated rooms resembling igloos — the hotel recommends wearing long underwear even during high summer — and Hurtigruten cruise ships drop off travelers in Kirkenes as the final stop on their trip up Norway’s coast.
Hans Hatle, the founder of Barents Safari, a tour company, spent years as an army officer training guards to defend Norway’s frontier with the Soviet Union. He now escorts tourists by boat to that same border, recounting the role of the Russians and Finns in the region.
“We have had a lot of shifting politics here,” he said, standing atop a rock on Western Europe’s edge. With warming temperatures making popular destinations in Spain and Italy unseasonably 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 am confident that we will make it.”
