This issue of the «Outlines of Global Transformations» taps on the problem of interaction between the state and big transnational businesses in presentday global economy.

The article considers the features of a new stage of globalization. The slowdown in the dynamics of interstate flows of physical assets, primarily foreign trade and capital in the post-crisis period, sparked a discussion about the end of globalization. It is shown that the slowing down of globalization processes is temporary, it concerns traditional assets, while the interstate flows of new assets triggered by the 4th industrial revolution are fundamentally strengthened. The driver of a new phase of globalization are the technologies associated with the Internet, new communications, 3D-printing, robotization, renewable energy, etc. They fundamentally change the view of the rational allocation of production and reduce the need for transportation of traditional goods and for foreign investment. As a result, in the future may occur reformatting of some existing value chains. New technologies also change the business strategy, which begins to create special technological platforms that eliminate intermediaries and ensure better and more competitive satisfaction of customers’ demands. The increased tendencies towards regionalization and transregionalization, which stimulate all states to remove barriers to trade and investment and improve the investment climate, is not an obstacle to globalization. In the future, their expansion will take place at the expense of new members, the conclusion of preferential trade and investment agreements between members and non-members of individual mega-partnerships. Another driver of the current stage of globalization is informal consumer globalization, or “globalization from below,” which is connected with the activity of citizens. The number of foreign tourist trips, studying and working abroad, and purchases abroad via the Internet is growing. This is a fundamentally new stage of globalization, which will be gradually formed a world without economic borders, common economic space without participation of supranational formal institutions.

Having moved to the global level, capitalist political economy today is turning into a dominant way of governance in world politics, undermining the state-centrist model that has been developing since the time of the Westphalian peace treaties. As a result, we are witnessing a Schumpeterian phenomenon of “creative destruction” i.e., destruction of old accompanied by creation of new. The current world politics is dominated by the logic of destruction, and this destruction is not limited to changing interstate relations, as it is represented in most studies, but involves at the same time at least three levels of political organization of the world, forming a synergy effect: the level of the Westphalian world order; the level of interstate relations; the level of the national state. The Westphalian ststem is being blurred largely by transnational business activity. Entrepreneursinnovators form capitalism of co-participation. This capitalism rests not on interest, but on values and social ties that unite people in networks. Examples of such capitalism are various forms of sharing, peer-topeer networks, wiki-platforms, block-chain technology. Capitalism of sharing unites in- formational networks and human potential, the main resource of such capitalism is precisely human capital, human trust and social relations. The sharing is being transmitted to the international political sphere, supplementing the principle of the Westphalian sovereignty with the potential of eventually replacing it. At the same time, practices are being introduced into the political organization of the world from other projects of the political organization of the world, in particular Islamic (Islamic banks, hawala money transfer system, etc.). 

In recent decades, transnational business actors have substantially strengthened their role in global economic governance. Although this trend became less pronounced after the global crisis of 2008–2009, it was by no means reversed. With multinational companies (including those from developing markets) increasing scale and scope of their operation and national governments competing for foreign direct investment (FDI) as a development resource, both official and public-private economic governance mechanisms shape their agenda with a reference to transnational business interests. As a result, FDI promotion policies prevailed in post-crisis years, in contrast with a remarkable growth of protectionism in international trade. At the same time, as the case of economic sanctions shows, with increased tensions in international relations business interests are readily sacrificed, and thus far transnational business actors have no reliable tools to change the situation. 

What is the impact of the ongoing transformations in the Arctic region – global warming, socio-economic and institutional changes – on internationalization in the Arctic and the activities of multinational companies in the polar regions of the Arctic countries? What is the role of multinational companies in the sustainable development of these regions, including the ensuring of the welfare of the northerners? The article attempts to answer these questions and discuss new approaches to the problem of sustainable development in the Arctic region with its extremely vulnerable and severe nature, large reserves of natural resources, unique human potential, dynamically developing economy, infrastructure and active involvement in the world economy. The main emphasis is on the assessing of the social component in the triangle of the interrelated priorities of sustainable development  – social, environmental and economic. The analysis showed that the consequences of systemic transformations form a new context for the activities of multinational companies, which have to adapt their corporate strategies to the Arctic specifics. The northern regions are actively involved in internationalization; a significant part of their GRP is produced by enterprises controlled by multinational companies. Assessments of the role of multinational companies for the local population and sustainable development are mixed. Such companies help to modernize the economy and infrastructure, create jobs, place orders with local producers, and develop human potential. In a number of countries, the control of the local population over the activities of multinational corporations (USA, Canada) is strengthening. At the same time, serious social and economic imbalances arise, including social disproportions and stratification of the population, as well as challenges for traditional activities and nature. The contribution of the Arctic regions to the world economy is almost five times higher than their share in the world population. Obtaining a social license from the northerners, implementing corporate social responsibility is becoming a popular instrument used by multinational companies to support their activities in the Arctic. The interaction between the state and multinational companies is strengthening, and the forms of state regulation of the access to natural resources and infrastructure are being diversified. The study is based on the analysis of the practices of foreign Arctic countries, rich in mineral and energy resources – the USA, Canada and Norway; their approaches and practices may be of interest to Russia and its northern regions. In conclusion, new scientific concepts of adaptive governance of sustainable development and its inclusiveness in the context of the interaction between transforming natural and social systems in the Arctic are summarized. 

This article aims at contributing to the current debate over the effects of illicit transnational activities on states. Recent avenues of conceptualizing transnational organized crime call for defining it as an economic activity with the scope of profit, rather than a criminal activity. Illicit transnational business activities largely follow the trends in development of legal business. The transnational criminal enterprises emerged in parallel to the growth of multinational corporations, making use of the same opportunities as legal business did. The article discusses violence by illicit enterprises and reviews current theoretical debate on the linkages between illicit enterprises and the state. The paper then proceeds with an empirical analysis of the effects of the presence of illicit enterprises on state weakness. We have hypothesized that weak states may have higher presence of criminal businesses. The findings generally confirm significant correlation between the two variables. State fragility is positively correlated with the presence of organized crime. Testing these results against empirical evidence partially confirms the findings. However, this correlation might be weakened by the observation that the presence of illicit enterprises alone does not determine state fragility or strength. 

In recent years (since late 2013) the federal government has intensified the policy of foreign investors attracting to the Russian Far East, proclaiming the need to integrate this macro-region in the Asia Pacific region and creating development institutions of the Far East, as well as preferential conditions for investors – the territories of priority socio-economic development, free port of Vladivostok. Investors are given massive tax preferences, regime of free customs zone, a number of other preferences. However, from the point of view of foreign investors many instruments of state investment policy – rather its lack, than advantage. Investment policy of regional authorities in the Far East is currently ranked low, in the National ranking of investment climate in subjects of the Russian Federation Far East regions, with the exception of Khabarovsk Krai, located in the second half. By the volume of foreign direct investment (FDI) stock Sakhalin oblast stands out among the Russian Far East regions, occupying on this indicator the second place among all subjects of the Russian Federation due to the action of agreements on production section, which appeared in 1990- ies. The shares of other Far Eastern regions in the FDI stock in Russia is still small. The state’s efforts in recent years to attract FDI to the Far East led to some increase in the volume of FDI stock in the macro-region, but not in all subjects of the Russian Fed eration. Preferential regimes are increasingly attracted domestic rather than foreign investors. Among the projects with participation of foreign capital projects focused on the domestic market of the Far East (agriculture, services) and the use of macro-region natural resources dominate. Projects on creation of manufacturing industries which products can be delivered beyond the Far East, including for export, yet few. The prospects for improvement, given the existing experience of the gradual development of new regions by foreign investors, but it requires improvement of the state investment policy both at federal and regional levels.

The article based on the touristic transnational corporations’ activity in Russian is dedicated to not only negative but also positive sides of interaction between Russian business and power institutions. Talking about transnational corporation in toutistic sphere we should consider at least three factors: internationalization and globalization of intertational tourism; connected with this factor tranformation of transnational corporations’ structure and functions in recreational industry; specificity of so-called «soft power» implementation in the area of state and transnational business interaction. Unification of consumers’ attitudes equally as common cultural values coming from globalization are able to not only simplify the organization of international touristic business but also put to use this business as the channel of “cultural diplomacy”. Herewith the authors are invocating to treat with caution with the concept of “soft power”: commercial aims of touristic companies’ activity predominate over humanitarian duties and balance between state and private interests is not an easy course. This fact set the whole complex of obstacles in analysis of peer interaction especially in forming (or redesigning) and promoting of state image on the world stage. The authors try to overcome these obstacles and show why and whereby resource potential of foreign (needless to say about Russian ones) transnational corporations could be used for forming and promoting of Russian Federation’s positive image on the world stage. 

The article is devoted to the analysis of the inter-territorial cooperation of Russia and France at the present stage. It is the cooperation at the level of individual territories that become one of the forms in which countries are interested in, and France is not an exception. Russian regions also seek to develop relationships with the French side though this direction of foreign economic activity is not a priority for them. Authors’ attention is focused on those regions, which are the most involved in the investment ties between the two countries. Regional authorities play a particular role in the development of inter-territorial economic cooperation that is reflected in the analysis of activities of the regional authorities of France and Russia in the direction of development of bilateral ties in crisis conditions. Forms and dynamics of cooperation are considered; prospects of Russian-French interregional ties in the current political and economic conditions is assessed. Russian regions with comprehensive cooperation with French side are given. Investment cooperation is the most important for regional economy and only a part of French regions and of the subjects of the Russian Federation is involved. A characteristic feature of such cooperation is the concentration of investments of both countries mainly in the capital territories of France and Russia, as well as the territorial narrowness of investment activity in general that is predefined by the investment strategies of big Russian and French companies. Special attention is paid to the companies, which have the most geographically diversified structure. The experience of the Kaluga region as one of the active participants of the Russian-French inter-territorial cooperation is analyzed at regional level. Kaluga region in particular adopted French experience of regional innovation development. Nowadays Kaluga region is one of the biggest recipients of French companies’ FDI. Their projects are concentrated in the field of mechanical engineering, food and chemical industry, and the construction materials industry. The existing level of inter-territorial cooperation between France and Russia allows us to say that this form of cooperation is perspective and will develop in the future. 

The article establishes stable codependencies between international financial markets and their underlying cause and effect mechanisms, as an object of a global transformation. We demonstrate an intense co-integration between the financial markets of Russia, Brazil and the other emerging markets of Latin America (through the lens of stock markets and national currencies). The cause and effect mechanisms of this dependency are examined. We characterize the countries as analogous substitutes for investors (abundant similarities include: models of collective behaviour, ideology, model and structure of the economy, model of the financial sector, highly speculative markets in shares and currencies). The article explains an extremely limited role of the internal (primarily retail) investors in determining dynamics of the financial market. The central role of non-resident actors (global financial institutions and institutional investors) in the dynamics of the markets of Russian and Brazil is established. We demonstrate that for Russia and Brazil sources of foreign portfolio investments coincide. This includes Anglo-Saxon centers, specifically the US and British offshore jurisdictions, and the global centers of secondary importance (the Netherlands and Luxembourg). The decision making models of global investors in Russian and Brazil are examined: stock prices are driven by the oil prices, and in part by the US stock market, and rouble and real exchange rates follows oil prices and the EUR-USD currency pair. Analysis and conclusions made in the article are supported by a significant volume of statistical modelling. 

The policy of the Cypriot authorities, aimed at attracting foreign capital, is deeply rooted in history. Having created a flexible tax system, since its first years as an independent state Cyprus has managed to attract numerous foreign shipping companies and in the 1970s it turned into a regional financial hub through which economic cooperation between the countries of the West and the Middle East was carried out. The Cypriot economy flourished in the 1990s – 2000s, when thanks to favorable taxation regime, transaction confidentiality, convenient geographical location, eased visa regime and a number of other factors it became the main transit point for capital from Eastern Europe, first of all  – from Russia. However, the future of Cyprus as an international financial center is in question. Under the pressure of the EU, OECD and a number of individual countries, the Cypriot authorities are forced to bring their tax legislation in line with international standards. Negative impact on the investment image of the country was rendered by the national 2012-2013 banking crisis, followed by the collapse of the largest national banks, a sharp deterioration in macroeconomic indicators and the implementation by the government of a number of reforms that affected the attractiveness of Cyprus in the eyes of international business companies. In these circumstances, the Cypriot authorities have taken a number of measures aimed at preventing the outflow of foreign capital, including the abolition of the property tax in the housing stock, the extension of benefits for new tax residents and the introduction of a simplified procedure for the granting of Cypriot citizenship for investments. Thanks to these innovations, Cyprus managed not only to retain interest from TNCs of Russian origin, but also to attract investments of small and medium-sized companies, primarily those working in the field of information and communication technologies. 

As an organisational failure may teach more than an organisational success, this article describes the failed foreign investments of two Finnish stateowned enterprises (SOEs), namely Sonera and Stora Enso. In 2000, Sonera acquired a mobile phone licence in Germany and Italy for USD 4,000 million. Two years later, it turned out that the licence was worthless. In turn, Stora Enso acquired an American paper firm for USD 5,000 million in 2000, but seven years later Stora Enso sold this US unit at a loss of USD 2,000–3,000 million. These two cases reveal that the major reason for these failures was the inability of SOE management to predict business development. Other major reasons for failure were the conflicting motives of the management and the company (the main shareholder), and inadequate state control. Passive control of the state may encourage SOE management to exercise adventurous investment policies and take major risks. In Sonera’s case, unrealistic risk taking led to serious financial difficulties, and finally, to a forced sale of the entire group to Telia, the Swedish telecom company. Stora Enso’s stronger financial position saved it from an organisational failure. A lesson to policy-makers: a responsible minister and the minister’s subordinates should exercise a more active ownership policy and keep the political interests of his/her party subordinate to the strategic interests of the state. Recent public discussion on SOE governance in Finland reveals that the Finnish Government still experiences difficulties in fully digesting the wisdom of the OECD Guidelines of Corporate Governance of StateOwned Enterprises.