The battle for the Arctic: A new hotspot for global power politics

The Arctic is evolving from a remote peripheral region into a new geopolitical hotspot. Global warming is acting as an important catalyst, accelerating the melting of polar sea ice. This is opening up new shipping routes and access to previously untapped raw materials. "This prospect is arousing enormous interest, especially among the three major powers; their clash makes the Arctic the central stage for a changing world order,“ says Dr. Heinz-Werner Rapp, founder and director of the Cognitive Finance Institute. In its latest analysis (available in German), ”Kampf um die Arktis: Globaler Wettlauf um Rohstoffe, Macht und strategische Dominanz", the institute examines potential opportunities for the economy as well as emerging geopolitical risks.

The Arctic is becoming a hub of global power politics

“In the far north, economic and security interests intersect with such intensity that they not only challenge the existing world order, but also redefine global power lines,” Rapp emphasizes. For the time being, the relative winners of this development are primarily anti-Western powers: while Russia is exploiting the new circumstances to massively expand its military presence in the polar region, China sees the newly opening shipping routes primarily as an advantage for more efficient trade routes and the expansion of its global ambitions. 

Mirroring this, Europe, but also the US and NATO with its new members in Northern Europe, came under strategic pressure. The US has already responded with a realignment of its security policy, as evidenced by its interest in Greenland. “The US wants to reduce its vulnerability in the far north, but also to reduce its dependence on Chinese raw materials,” explains Rapp. Europe, on the other hand, which does not pursue an independent military strategy, has not yet fully grasped the extent of the risks and remains caught in the “geopolitical vice” between the three major powers. 

Accelerated ice melt opens up new economic opportunities

At the same time, melting ice caps would bring new economic opportunities, such as shorter trade routes, rich raw material deposits, and new fishing grounds. “For many investors, the Arctic is still a relatively unknown factor, but one that should already be included in strategic considerations and decisions today,” says Rapp. However, as the analysis shows, the potential opportunities in the Arctic are inextricably linked to new geopolitical risks. Against this backdrop, forward-looking planning and ongoing monitoring are becoming increasingly important for entrepreneurs and investors. They should therefore take a long-term perspective and keep a very close eye on the risk scenarios outlined in the analysis. 

With its cognitive briefing “Kampf um die Arktis: Globaler Wettlauf um Rohstoffe, Macht und strategische Dominanz”, the FERI Cognitive Finance Institute provides investors and entrepreneurs with deep insights into the rapid transformation of the Arctic and assists them in classifying and evaluating the implications. The analysis is available in German for download on this page.