Vikings and Tigers : Finland , Sweden , and adoption of environmental technologies in Southeast Asia ' s pulp and paper industries 1

This paper examines stmctural dimensions of the influence of core-per iphery relations on adoption of environmental technologies in newly industria lizing countries (NICs), using Nordic involvement in development of Southeast Asian pulp manufacturing in the late 1980s and early 1990s as a case study. Contrary to cmv entional wisdom, Southeast Asia ,vas one of the first places in the world to employ new cleaner technologies in pulp and paper manufacturing. How did this happen? This paper argues that adoption of these technologies was influenced by dynamics within the world -system combined with the intentional actions of firms, states, and social movements over a 30-year period. The pap er concludes that diffus ion of the new environmental technologies is resulting in cleaner produ ction in the periphery even while being part of a trend toward increased polarization between core and periph eral states, economies, and firms. Data were gathered from fieldwork in Southeast Asia from 1993-96; correspondence with Nordic firms, organizations and individuals ; attendance and intef\iews at industry trade shows; and use of available data. Portions of the paper are derived from a larger study of adoption of environmental ) technologies in th e pulp and paper industries of Southeast Asia and Australia;" "I sell the same stuff here as we sell anywhere in the world ... it's economics that drives it. How they operate it, what they do when the was tewater treatment facility breaks down, that I can't say ... maybe trey keep on operating , get it fixed in a week. All I know is the equipment's there. -Singapore-b ased sales representative of a Nordic technology firm!


Introduction
In the early 1990s, Southeast Asian pulp firms adopted world-class cleaner production technologi es, defying conventional wisdom that "Third World" countries were simply sites for "First World" manufacturing activities to run away to, to avoid incrca~ingly stringent environmental controls at home --the so-called "pollution haven thcsis" (scc Leonard 1988; sec also Eskcland and Harrison 1997).How did this come to take place?This paper maintains that Southca~t Asian pulp firms' adoption of new, more environmentally-friendly pulping and bleaching technologies wa~ a product of structural dynamics within the world-system combined with the intentional actions of firms, states, and social movements in Nordic Europe (including especially Finland, Sweden and Norway) and Southca~t A~ia over at lea~t a 30-ycar period.
After Raumolin (1984;1990;1991;1992), l argue that Finnish and Swedish corporate and state interests --modern-day "Vikings" --have pursued a strategy of global specialization in forest industry technology as part of an effort to maintain competitive position within the structure of the world-system.In the late 1980s and early 1990s, under conditions of global recession compounded by political restructuring and realignment in Europe, Nordic countries targeted forest industry process technologies a~ part of a broader effort to expand high value-added exports to the newly industrializing countries ofSouthca~t Asia--the new "Tiger" economics.Southca~t Asia wa~ one of the few regions of the world booming at the time.
This paper begins with a summary of recent world-systems theory on industry, environment & the periphery, outlines the history of development of Finland and Sweden's specialization in forest industry technology, analyzes the establishment of "Viking" presence among the "Tigers" of Southca~t Asia, examines conditions under which Southca~t Asian firms adopted new, Nordic pulp and paper technologies, and discusses implications of these dynamics for world-systems theory.Data for the study were gathered from fieldwork in Southca~t Asia from 1993-96, correspondence with Nordic firms, organizations and individuals, attendance and interviews at industry trade shows, and use of available data.

Core, Periphery and Environment
ln Global Formation, Cha~c-Dunn (1989) suggests a number of ways in which corcpcriphcry relations arc changing in the course of the establishment ofa "new international division oflabor" (NIDL).Certain, especially more labor-intensive, forms of industrial production have been shifting from core to peripheral countries in the world-system.This shift docs not alter fundamental hierarchies in the world-system, however.As Arrighi and Drangel (1986) argue, the relative composition of core, scmipcriphcral, and peripheral components of the world-system remain largely unchanged.This is due to the concentration of research and development, ma~s marketing, and other high value -added nodes in the commodity chain remaining disproportionately in the core (Cha~c-Dunn and Hall 1997;Gcrcffi and Korzcnicwicz 1990;Wallcrstcin 1979) .
With the shift of industrial activity--the "muscles and nerves" of the world economy -to the periphery, relations between core and periphery change accordingly (Arrighi 1985, cited in Arrighi andDrangel 1986, p. 57).lncrca~ingly, core countries specialize in "brain" activities (ibid.),providing finance, technology/capital goods, and management skills as needed to the rest of the world-system.Scmipcriphcral and weaker core countries must continually scramble to keep from "falling down " in the hierarch y of the world-system, and arc particularly motivated to specialize, compete, and aggressively export key factors of domestic comparative advantage to all corners of th e globe (Wallcrstcin 1979).Global economic crises arc times of opportunity for weaker core and scmipcriphcral countries to incrca5c their share of world value-add ed (ibid.).

Journa I of World-Systems Research
While peripheral arca5 have historically been locations of extraction of raw mat erial s for export to the more capital-intensive core, for use in manufacturing, incr ca5ingly, both first-level processing and manufacture of intermediate goods takes place in the periphery.Today, not only arc labor-intensive consumer goods produced in the p criphcry, but also capital-intensive manufacturing takes place there, such a5 oil refining , chemical processing, and metallurgy.Labor costs remain a factor for ba5ic indu stry in the periphery, but more for extraction and transportation of raw mat erials than for the limit ed amount5 of skill ed labor used in capital-intensive production. 1 Locati ng manufa cturing near sources of primary raw materials can help minimize transportation costs.
Other rece nt world-systems scholarship analyzes cnviromn cntal dimensions of peripheral industrialization.Bunker and Ciccantcll (Bunker and Ciccantcll 1995, p. 3), argue that incrca5ing control of resourc e extraction in the periphery is an essent ial feature of efforts by "rising hcgcmons" to advance standing in the world-system.Hornborg (1988, p. 174) places natur e alongside labor a5 an essential ingredient of the world-system.Advances in technology , he suggests, create new ways for the core to redistribut e exprop ri ation of natural resources across space and time.Chew (1997, pp.388 -389) , posits that the shift of industrial production from core to periphery is a result of ecological degra dati on in the core combined with availability of inexpensiv e natural resourc es and low-wage labor in the periphery, with "the outcome for Natur e [remaining] the same ... " The global pulp and paper indus try prov ides an interestin g ca5c in core -periphery relations, industrialization and the environment.Historically, pulp and pap er production wa5 concentrated in North America, Europe, and Japan, locations also of the lions shares of pape r consumption.In recent years, pulp and paper production ha5 mov ed incrca5ingly to the periphery an d semi-periphery , especia lly in South America and Southca5t Asia, where, a5 suggested by Chcw's (1997) analysis, inexpensive resource costs allow the manufacture of pulp and paper more cheaply than anywhere else on the planet.Pulp and paper production arca5 in the North, then, arc facing incr ca5ing competition from the South .Northern countries which held comparative advantage in forest industries have been pressed to include more "va lue-added " service s, includin g the developm ent and manufacture of new proce ss technologies .
Finland and Sweden, both historic centers of forest industry production in Europe, have been among the most successful in making a shift in the new international division of labor to forest industry consulting services and pulp and paper technology development.The forward-looking practices ofNordic governmental and non-governmental organizations, technology firms, and research centers, in developing new, cleaner production technologies increased global demand for those technologies, including in Southeast Asia.This is one point at which earlier analyses of relations between the world-system and environment may be furthered.For multinational corporations and core states not only arc vehicles ofcnvironmcntal destruction (as posited, e.g. by Bergesen and Parisi 1997), but also may be agents of environmental advancement.Which aspect is dominant for particular industries and locations is an empirical question, addressed here for Southeast Asia's pulp and paper industries.Or, as Arrighi and Drangel's (1986) analysis may suggest, the core-periphery hierarchy may be heightened in the course of peripheral industrialization, regardless ( or even because) of the adoption of clean technologies.How do these dynamics play out in the case of the "Vikings and Tigers" --Nordic involvement in the development of Southeast Asia's pulp and paper industries?

Journa I of World-Systems Research Historical Dynamics of the World-System
Finland and Sweden have long had comparative advantages in forest industries and related industrial process technologies.A century ago, both countries were among the more peripheral states ofEuropc. 2Today both have leveraged human and natural resources and proximity to major European political and economic powers to develop substantial industrial, technological, and intellectual capabilities, rising into the ranks of the core states within the world-system.According to one prominent account, Sweden has been in the core since at least 1938, while Finland is a more recent arrival (Arrighi and Drangcl 1986).
Kvrerncr got its start in the pulp industry in the early 1970s, when it joined forces with the Ahlstrom Company, from Finland (sec below), and Myrcns Vcrk-.tcda/s, a holding of the Axel Johnson group of Sweden, to form Kamyr a/b, one of the world's leading pulp technology firms.In 1989, the Johnson group sold its share to the two other partners.Ahlstrom obtained exclusive marketing rights for the North American market, while Kvrerncr gained rights to use the Kamyr nam e everywhere else, including Southeast A-.ia.In 1993, Kvrerncr and Ahlstrom dissolved their partnership and Kvrerncr began using its own name.

[Page 32] Journal of World-Systems Research
The Kvrerncr group is based in Norway, with major units throughout the Nordic countries and elsewhere .In the early 1990s, pulp and paper was one of the company's five maj or business sectors, along with shipbuilding, shipping, manufacturin g oil and gas platforms, and mechanical engineering.Kvrerncr's Pulp and Paper Division empl oyed about 1500 of the group's 23,000 employees (sec Figure 9).In the 1980s, Ahlst:ri\m marketed pulping antl bleaching equipment umlcr its 0~11 name in Europe, imd a.~ Klllll)'T, Inc., in North America, •under terms oftl1c Kam;T partnership agrccmcn t.Since that partnc1,hip di~solvcd in 199:\, Ahl~t:riim ha.~ cxpimd.cdsales and marketing to S,mtl1 Africa, IhL~sia, und Japan, "strengtl1cncd its ci1pabilitics in China imd India amt opened a new office in Thailand" (Ahlstri\m 1991;1992;1993;1994b;and 1995).In the late 1990s, distinctions among Nordic technology finns, and between these finns and some of their S,mthcast Asum customers became blurred throngh arnsh of mergers in the wa.ki! of the "Asum Hn" financial crisis.One knowlcdgciiblc insider and observer referred to these developments as smh: "All the indicators for 'manic logic of global capitalism' (Greider) arc explicit here in onr little para;.lisc... it's the race within Finnish imb:IStly [to sec] who is quickest to make the next mo,1!"(Wilen ins 19:)9).UP)d-Ky1t11:rer.e.The K:,.mmcnc and Rimma-Rcpola comr1111ics merged in late 1997 to become the mcga•fbrcst indtL,tzy firm, UPM• K:,.mmcnc.ll At approximately the same time, UPM-K:,.mmcnc also imnounccd a major strategic alliance including ,nbst!mt:ial cquily holdings in a joint venture with the Singa:porc-biL,Cl~ Asia Pacific Rcsotirccs holding group (APRIL), operators of PT Rian Amlalan l"ttlp and Paper and PT Jnt:i Indorayon Utama, in Indonesia (UPM-Kymmene 1997).In 1998-99, UPM-Kymmene launched a joint venture with the Finnish state, principle shareholder of the Valmet Corporation, leading producer of papcrmaking machines, to form a new, combined technology powerhouse --the Rauma-Valmet Corporation, including Sund.., Defibrator (UPM-Kymmene 1998).
Stora Enso.UPM-Kymmene's mergers and acquisitions were in response to the earlier merger of two other Nordic forest sector powerhouses, the Swedish Stora company, and the Finnish state-owned Enso Oy_j pulp and paper firm (Wilenius 1999; Stora Enso Oy_j 1998). 12Like UPM-Kymmene, Stora Enso is poised to become a major player in Southea..,t Asian pulp and paper manufacturing.Enso is joint partner with the para..,tatal Inhutani III forestry corporation in Indonesia, together with the Gudang Garam group -manufacturers of clove cigarettes and one of Indonesia's largest consumer goods exporters (World Paper 1994a).The firms hope to construct a large-scale, exportoriented pulp mill in West Kalimantan, Indonesia, near several pulp plantations, including one of their own (World Paper 1994b;World Paper 1995).11Also, in 1998 Enso announced a strategic alliance with the Advance Agro Co., major integrated pulp and paper manufacturer, in Thailand (Nation 1998a; Enso Oyj 1998).Through Enso's mergers and alliances a.., well a.., the Valmet-Rauma (Sunds Defibrator) merger, the Finnish state and Nordic private capital have direct equity stakes in many a ... pects of global pulp and paper manufacturing, including in Southea..,t Asia.
Kvcerner/Ahlstr6m.Meanwhile, suffering heavily from the Asian flu (Kvrerner 1998b), in early 1999, the K vrerner group wa.., (re-)merging its K vrerner Pulp and Paper division with Ahlstrom's Machinery division (Kvrerner 1998a; Virtual Finland 1998) --shades of the old, failed Kamyr Corporation --though under good terms this tim e (Wil enius 1999).Both the Kvrerner and Ahlstrom Companies had been hit hard by the Asian financial downturn and were engaged in major organizational restructuring.

••• And T~t.Jers
Who were the Southea..,t A..,ian firms who in the la..,t three decades sought help from Nordic corporat e "travel ers " in the expansion of pulp and pap er manufacturing in th e reg ion, purcha.., ed capital good.., including cleaner production technologies from Nordic "traders," and most recentl y have woo ed and been wooed by Nordic public and private "take-over" interests ?Key "Tiger" firms includ ed the Phoenix Pulp and Pap er Co. and Advanc e Agro Corpora tion, in Thailand ; and PT Indah Kiat Pulp and Paper (IKPP) and PT Riau Andalan Pulp and Paper (RAPP) in Indonesia.

Phoenix
Phoenix Pulp and Paper wa.., the first company to bring an ECF bleached chemical pulp mill into commercial production in Southca..,t Asia, in July 1994.Phoenix began exploring adding a second pulp line at its facilities in northca..,t Thailand in the mid-1980s.They hired Jaakk:o Poyry to conduct a fea..,ibility stud y for them.While planning the expansion, Phoenix came into conflict with local community residents concerning pollution from the company's existing pulp line (sec Sonnenfeld 1998a).Phoenix upgraded its wa..,tcwatcr treatment facilities (using Ahlstrom equipm ent), but wa.., nevertheless notified by government authorities that they would have to completely eliminate discharges into the neighboring Phong River (Nam Phong) within a few years.
In this context, Phoenix decided to "turn necessity into a virtue" and adopted an ambitious new corporate goal --to become one of A..,ia's first "zero-discharge" pulp mills.To attempt to achieve this goal, Phoenix also added oxygen dclignification ~o its existing pulp line and initiated a program to use treated wa..,tcwatcr to irrigate eucalyptus plantations on nearby lands.Phoenix's new pulp line wa.., planned to incorporat e the lat est pulping and bleaching technology to help meet this goal.Phoenix's expans ion and environmental upgrading wa.., underwritten by a US $108 million interest -free loan from Finnish development authorities (Reuters News Service 1994b).Sunds Dcfibrator supplied an ECF SupcrBatch™ fibcrlinc 12 for Phoenix's new mill.w At the time of my sit e visit in August 1994, officials hoped that Phoenix's faciliti es wou ld be clean enough to merit cco-ccrtification for its products.If obtained, cco -ccrtificat ion would position Phoenix a.., a low-cost "environment al pulp" producer, since a substantial portion of its pulp is from non-wood (bamboo and kcnaf) sourc es.Such a position could command premium prices in countries with "green" consumer mark ets --in th e mid-1990s, Phoenix claimed to be obtaining high prices in Japan for its kcnafp ulp for use in "wood-free" paper products ...u

Advance Agro
Advanc e Agro is one of Thailand's newest pulp and paper mill s.It wa.., built in the north ca..,t crn reg ion of the country by the Soon Hua Seng (SHS) group, one of Thailand's largest integrated agro-industrial business groups.SHS wa.., mir ed in controversy in the 1980s for the role of a subsidiary, Suan Kitti, in cutting natural forests to establish eucal yptus plantations (sec Sonnenfeld 1998a).Originally planned a.., the "Suan Kitti Pulp Mill," the mill's nam e was changed to insulat e it from public and political pressur e. Jaakk:o Poyry and H.A. Simons, a Canadian firm, were hired a.., technical consultants for the mill.SHS, wanting to minimi ze the impact of the Suan Kitti controvers y on governm ent approva l of its pro posed pulp and paper complex, hir ed the Finnish-owned and Bangkokba..,cd, Prcsko public relations firm for adv ice on environmental matters.Sunds Dcfibrator pro vided ECF pulping and bleaching equipment for th e mill, which began operations in 1996.In 1998, Advance Agro formed a "strategic alliance" with the Finni sh Enso Company and Japanese Oji Paper Co. (Nation 199b).

IndahKiat
The Sinar Ma.., Group, a diversified, integrated agro-industrial, real estate and financial group of companies ba..,ed in Jakarta, began producing pulp at its IKPP mill in Riau , in 1984, using imported second-hand equipment from one of its Taiwanese joint venture partners.With substantial production and demand already for its various lines of bleached paper products, IKPP added a second pulp line (its first new pulp mill) in 1990, using Kamyr pulping equipment.
IKPP and its sister companies were so wildly successful that, with a downturn in the world's pulp and paper indrntry in the 1990s, the group seized on an opportunity to purcha..,c new pulp and paper technology at "rock bottom" prices.Two new large pulp lines were built, one (Pulp Mill #8) at IKPP at Perawang, and one at PT W ira Kary a Sakti, a sister mill in Jambi province, also on the island of Sumatra.Both arc in operation today with Kvrerncr's ITC™ ECF pulping and bleaching technologies.Jaakko Poyry ha.., worked closely with IKPP over the years both in the company's plantation forestry program and a.., technical advisor.Funding for the new mills came at lca..,t in part from the international corporate bond market.
In 1995, the Sinar Ma.., Group "spun ofr' its pulp and paper interest s to Singapore-ba..,ed A..,ia Pulp & Paper Co. Ltd. (APP).Shortly thereafter, APP successfully floated millions of dollars of corporate bonds on the international markets, includin g in the USA, for expanded paper production in India and China.In 1998, APP announced plans to participate in a joint venture in a pulp mill in the Malaysian Borneo state of Sarawak.Also in 1998, APP announced a "global strategic alliance" with the Japanese Itochu corporation (APP 199b).A.., of the writing of this article, reports suggested that APP had over US $3 billion in debts on international capital markets (Reuters News Service 1999).

[Page 35] Journa I of World-Systems Research Riau Anda/an
The Raja Garuda Ma.., (RGM) group, headed by the Tanoto family, among Indonesia's foremost plywood industry entrepreneu rs, got into pulp production in North Sumatra in 1988 at their PT Inti Indorayon Utama (PT IIU) cellulose mill.They reported ly used second -hand equipment for the mill from Finland, includin g pulping and bleaching equipment from Rauma Repola, imported via a Taiwanese equipm ent company the Tanoto's had an interest in.
Despite a rocky history of engineering and political problems at the PT Ill mill (sec Sonnenfeld 199b), RGM planned what today is one of Indonesia 's newest, and one of the world's largest pulp mills, in Riau, operating a<; RAPP.RGM hired J aaldco Poyry to conduct a fca<;ibility study and act a<; design consultant for the mill.Riau Andalan Pulp and Paper's entire fibcrlinc, including ECF pulping and bleaching equipment, wa<; provided by Sunds Dcfibrator.Funding for the project came at lea<;t in part from th e international corporate bond market.
In 1995, like its competitors, the Raja Garuda Ma<; group spun off its pulp andpap cr companies to a separate, Singaporc-ba<;cd holding company, Asia Pacific Re sourc es International Holdings Ltd. (APRJL).Like APP, APRJL also sold corporate bond s on international capital markets to raise funds for continued expansion.In 1997, UPM-Kymmcnc initiated a strategic alliance with APRIL, taking partial ownership of various APRIL facilities.(One ofUPM-Kymmcnc's subsidiaries, Sunds Dcfibrator, had supplied pulping equipment to the RAPP mill.)In early 1999, APRJL spun off PT IIU , du e to continued conflict surrounding that operation (APRJL, 1999).

Summary
Result<; of three decades ofNordic invol vement in the industrialization of Southca<;t A'lia's forest sector arc summari zed in Table 1, below.From 1981 through 1996, almost all bleached kraft pulp mills built in South ca<;t Asia used Nordic pulping and bleaching technology (sec column 5, "pulping technology suppli crl!).1992-94 were wat ershed years for adoption of the mor e advanced ECF pulping and bleaching technology in South ca<; t A'lia (sec column 6, "bleaching sequence"). 22Jaaldco Poyry serve d a<; contracting engineer for approximately two-thirds of those ventures (sec column 7, "contracting engin eer").The five bleached chemical pulp mills which commenced production in Southca<;t Asia from 1994-96, all use technology designed to produce ECF pulp, and t o be adaptable to producing TCF pulp a<; demanded by global and dom estic pulp and pap er markets.

Journa I of World-Systems Research Teclmology imwvation
Where had the new technologies come from?In the 1970s and '80s, Sweden and Finland experienced rising environmental movements and concerns, including those focused on pulp and paper manufacturing (Hellstrom and Reunala 1995;Raumolin 1992).Nordic pulp producers --many of them state-owned --were forced to meet increasingly restrictive environmental standards --now among the toughest in the world.Sunds and Kamyr, in cooperation with university research institutes, launched research and development programs to modify existing technologies and develop new ones to meet the new standards (Na<;man and Lindstrom 1994).By the end of the 1980s, these programs were bearing fruit, with Sunds' SuperBatch™ technology being launched in 1988, and Kvrerner's ITC™ technology and Ahlstrom's ozone bleaching systems in 1992 (Sunds Defibrator 1994c; Kvaerner Pulping 1994;Ahlstrom 1993).In taking a process reengineering approach to meeting environmental requirements, these firms travele d a different road than their North American counterparts who focused on developing new end-of-pipe technologies.
These factors came together in the early 1990s, resulting in the availability of Nordic environmental pulping and bleaching technology, urgent needs for new markets, and creative financing.Fortunately for the technology firms, this coincided well with the needs of Southeast A..,ia's new "Tigers."Jaakko Poyry's forestry/ forest industry consulting work provided important contacts and experience (Ha..,s 1978;Jaakko Poyry 1993g;Ulvila 1994a;Wallgren 1995).The history oflocal cnviromncntal conflicts around expansion of the industry, restrictive cnviromncntal regulations, and growing green international markets, provided additional rca..,ons for the adoption of environmentally-friendly technologies in Southca..,t A..,ia's pulp sector.
The technologies utilized in these mills arc world-cla..,s.This is in part a result of local community, cnviromncntal, and regulatory pressures.Nordic firms and governments have become major agents oftransfonnation in Southca..,t A ... ia, however, by providing these technologies a.., well a.., the engineering, project management, and financing for many of these projects.
The long-term trend in the pulp technology worldwide is away from elementally chlorine (Cb) ba..,cd, to ECF (Cl02), to closed-process (Edstrom 1994).How fa..,t the industry moves in any one region depends on a variety of factors, some of which have been touched on in this paper, including the availability of technology, its price, general world economic conditions, local community conflict, national environmental regulations, 2:1: th e pull of green consumer markets, etc.The five bleached chemical pulp mill.., built in Southca..,t Asia in the mid-1990s had many of these factors working in their favor.
Social activism will continue to influence how much environmental technology gets adopted, however, and how it is used.Without continuing pressur es from outside forces --government oversight, community pressure, consumer demand --paper produc ers will likely optimize their mix of bleaching chemicals to suit their economic needs and product requirements.Thus for example, while lndah Kiat's Pulp Mill #8 ha.., ECF-capable technology, the company ha.., run their new line with a chlorin e dioxide-elemental chlorine (DIC) mix (Meadows 1995).

Journal o.lWorld-Systems Research Co11clusio11
What arc the implica tions of the dynamics analyzed above for world-systems theory?First of all, the parallel rise of prominence of Nordic pulp technology firms and development of Southeast Asia's pulp and paper industries illustrate s the consolidation of scctorally specific relations --first cooperative, then incrca..,ingl y exploitati ve --between core firms and states and their peripheral counterparts, in the context of an evolving "new international division of labor," including peripheral industrialization.This is consistent with world-systems analysis of the development ofscmipcriphcral and weaker ("peripheral-") core states into full core status (Arrighi and Drangel 1986), and of the tendency towards increasing polarization between core and periphery.Indonesia and Thailand show limited characteristics ofscmi-pcriphcralncss in the forest industry/pulp and paper sector, especially since the "Asian Flu" financial crisis of 1997.Core -periphery relations have become increasingly polarized in the wake of the crisis, as a result of accelerated mergers, acquisitions and strategic alliances in the forest industry and related technology sectors globally, including in Southeast Asia.
The sale of capital goods associated with peripheral industrialization --including now cleaner production technologies --has multi-dimensional effects.Contrary to the conventional wisdom of the "pollution haven" hypothesis, in at least some sectors transnational firms, including technology firms, may actually be leading modernization of industry in newly industrializing countries.This suggests a further "advantage of backwardness" (Gcrshcnkron 1966, cited in Chase-Dunn andHall 1997, ch. 5) --the ability to industrialize using cleaner production technology.
While arguably "cleaning up" manufacturing in Southeast Asia, sale of capital goods is a stepping stone in the incrca~cd domination of core over peripheral firms, states, and economics.This is in accordance with Arrighi's contention that: ... the industrialization of the ... periphery ha~ ultimately been a channel, not of subversion, but of reproduction of the hierarchy of the world economy ... The relevant distinction is between activities that involve strategic decision making, control and administration, R&D, on the one hand, and activities of pure execution, on the other.The core zone tends to become the locus of the "brain" activities of corporate capital, the peripheral zone tends to become the locus of the "muscle and nerves" activities ... (Arrighi and Drangel 1986, pp. 56-57).
a~ well a~ Cha~c-Dunn's and Hall's argument that upward mobility and transformational action arc not necessarily the same thing.It is possible to succeed within a system without transforming the rules of that system.And it is possible to change the logic of social action without moving toward a more powerful or central location in a system (Cha~c-Dunn and Hall 1997, ch.5).
La~tly, this ca~c highlights capabilities and limitations of independent social movements across the world-system.As in Logan's and Molotch's (1987) work on the political economy of place and urban growth machines in the USA, social movements have largely not been able so much to affect the ultimate outcomes of economic development, but rather more to shape conditions under which that development takes place.In recent decades, social movements been more able to influence the nature but not fact of growth, development, and industrialization.In the present ca~c, social movement activism ha~ led to the relative greening of technologies employed in Southea..,t Asia's pulp and paper sector, while core-periphery relations have become incrca..,ingly polarized in the course of large-scale industrialization of the periphery.
J. 2. The history ofrelations between the two countries goes back centuries.In th e 18th century, Finland wa.., under Swedish rule.Many social and economic ties remain between the two neighbors.
Q.At the end of the 20th century, Finland is benefiting once again by it.., geographic proximity to Russia.As the Russian economy and society continues its chaotic gyrations, Finland ha.., become a reliable source of raw materials, business services, consumer good..,, and even a favored tourist destination for its neighbor s (Ibrahim 1998).
1. ~-The availability of large quantities of raw materials a.., a positive condition for economic development is consistent with (Gershcnkron 1966, cited in Cha..,e-Dunn andHall 1997, ch. 5).W c know now, after the onset of the "A..,ian Flu" economi c crisis of the late 1990s, that some of South ca.., t A..,ia's rapid growth of the previous decade can also be attributed to huge, loosely secured speculativ e investments in the region by th e world's financial community.
2. .Herc, the structur e and organization of these firms arc analyzed largely a.., th ey were during the Southeast A ... ian boom from the late 1980s through mid-1990s.In the late 1990s, spurred in part by their overextension in Asia, all of these firms were invo lved in mergers (Sec below).
[  1996).In 1997, the Rauma-Rcpola group merged with the Kymmcnc Corporation to become UPM-Kymmene ; in 1998, UPMKymmcne and the Finnish state launch ed a joint venture between Rauma and the Valmct Corporatio n, the latter a privati zed technology company in which the state retains the largest block of shares.As of this writing, Sund.., is a subsidi ary of the new Rauma-Valmct corporation, jointly owned by UPMKymmenc and the Finnish state.(Sec below).
ll .Elementally chlorine-free (ECF) pulping technologies were developed in response to concerns about toxic effects of dioxin, a byproduct of using elemental (gaseous) chlorine (Cl 2 ) in pulping and bleaching.ECF pulping technologies use chlorine dioxide (CI0 2 ), a compound more stable than C'2,that is nearly a-; effective in removing lignin from wood pulp.Other contemporary pulping technologies abandon chlorine altogether, using bleaching processes ba-;ed on molecular oxygen (0 2 ) or hydrogen peroxide (H 2 0 2 )-Such technologies are commonly referred to as totally chlorine-free (TCF).
12. As of this writing, Kv~rner Pulping wa-; being merged with the Ahlstrom Corporation's Machinery division.(See below) .
.U.Data from a presentation at a ceremony dedicating the opening of Kv~rner Pulping's new Singapore office, April 1994.
H . Ahlstrom ha-, important historical links with the Jaakko Poyry group (see below), including through members of the Ehrnrooths, "the richest family in Finland" (Ulvila 1995).Eric Ehrnrooth wa-; one of the founders of Jaakko Poyry Oy, in the late 1950s.He later went on to head Jaakko Poyry Engineering (Ha-;s 1978 ).Jan Ehrnrooth wa-; an executive officer of Ahlstrom during the 1970s and '80s (Ahlstrom 1975;1990;1991) li.In 1994, prior to its recent spate of mergers, UPM-Kymmene wa-; the second largest producer of paper in the world, behind only International Paper (Carrere and Lohmann 1996, p. 106).
16.In 1994, Stora and Enso were the fifth and sixth largest paper producers in the world, respectively (ibid.).Again ba-;ed on 1994 figures, Stora Enso combined would now be the largest paper producer in the world.
ll_ ."Oxyge n delignification" is a totally chlorine-free pre-bleaching process used to remove lignins --the chemicals which make unbleached paper brown --from pulp.Adding this relatively environmentally benign process prior to bleaching facilitates manufacturers' obtaining market-acceptable levels of pulp whiteness and brightness while using less or no elemental chlorine.
19.A "fiberline" is t he comple te set of technologies used in pulping and bleaching woody raw materials for producing finished pulp.
24. Minister Sarwono Kusumatmadja, of Indonesia's Environmental Impact Management Agency (BAPEDAL), declared in December 1993 that all new pulp mills in his country 'had to be ECF or better' (World Paper l994c).In Thailand, government officials use stringent site-licensing reviews as well as pollution guidelines to minimiz e new pulp mills' environmental impact.
[Page 40] Journa I of World-Systems Research
.:;t A..:;ian Jaakko Poyry 1993b;1993c;some of the hMarchak 1995) development of the new technologies themselves.The article concludes with a discussion of the relevance of this ca..:;e for theory of the world-system.[Page30]JournaI of World-Systems ResearchVikingsThe groundwork for incrca..:;ing Nordic economic involvement in Southca..:;t Asia's forest sector wa..:; laid over at lca..:;t a 30-year period.Jaakko Poyry, a Finnish consulting engineering group, began work in Southeast Asia in the 1970s.In the late 1980s and early 1990s, Finnish and Swedish forest industry technology firms exported major amounts of capital goods to the region, aided by generous government grant..:;, loans and credits.At the end of the century, Nordic firms and states have been taking advantage of global economic crises to establish world-dominant pulp and paper sector frames, including both manufacturing and technology.Moving from traveling, to trading, to taking substantial equity interest..:; in and managing day-to-day operations of major Southca..:;t Asian pulp and paper ventures, Nordic firms and states have progressivel y deepened their sectoral block with Southca..:;t Asian firms.TravelersJaakko P6yry.Chief among early con temporary Nordic corporate trav elers in Southeast A..:;ia wa..:; the Jaakko Poyry Co.The Jaakko Poyry Group of consulting, contracting, and manufacturing companies ba..:;cd in Helsinki, Finland, founded by a pulp and paper engineer of the same name, ha..:; been of singular importance in the shaping of th e forcstrelated industries not only in Southea..:;t Asia but also throughout the world(Ha..:;s 1978;Jaakko Poyry 1993b;1993c; Kcrski 1995;Marchak 1995).Beginning and Advance Agrn in Tiiail~d; and otl1c.TS.Last but not least --and key to the topic of this p~c.T --the Jaakko Pi\yry gn;-np plit)'C(l a critical rn le in brnk-c.Ting the sale ofp(tlp ~d p~c.T technology in Southeast Asia.
23[Page 36] Presented at the Center for Western European Studies colloquium series, University ofCalifornia, Berkeley, April 15, 1999, andan earlier version at the annual meeting of th e PacificSociological A..,sociation, Seattle, Washington, March 21-24, 1996.This article wa.., completed while the author wa.., Ciriacy-Wantrup Visiting Scholar at the Institute of International Studies, University of California, Berkeley.Mr. Marko Ulvila, Tampere University, and Professor Judith Mayer, Virginia Polytechnic Institute, were instrum ental in the birth ofmy interest in this topic and have been faithful and encouraging colleagues and informant.., in the paper's long gestation.Professor Walt er Goldfrank, University of California, Santa Cruz, also has graciously encouraged this project from its earli est stages.Dr. Markku Wilcnius, University ofTurku, whom I encountered by chance at a meeting of the American Sociological Association, wa.., gracious in sharing mat erials from his personal Ahlstrom family archives.Professor Jussi Raumolin, University of Helsinki, kindly sent copies of his published materials, helpin g me commence thi s research.Officers and staff of Finnish and Swedish organizations and institutions too numerous to name here were universally friendly and supportiv e. Professo rs John Bellamy Foster, University of Oregon and Christopher Cha..,c-Dunn, Johns Hopkins University, and an anonymous reviewer for the Journal of World Systems R esearch provided helpful comments on previous drafts.Financial a..,sistancc wa.., rece ived from the Australian-American Educational Foundation (Fulbright Commission); the University of California; the Switzer Foundation; the Centre for Resource and Environm ental Studies, Australian National University; and Wa..,hington State University.Th e views expressed here arc the author's alone.
Statistics Finland 1999)nged its definition of unemplo yment to bring it into accord with that of the European Union.Finland's official unemployment rates dropped 1-2 per cent a.., a result (secStatistics Finland 1999).Data for 1981-84 in Figur e 2 reflect the old definition; for 1985-98, the new definition.
. Another Ehrnrooth, Ca.:;imir, wa-; chaim1an of the Board of the Kymmene Corporation, and a founding member of the Board of Directors of the UPMKymmen e Corporation (see below) (UPM-Kymmene 1995).Poyry's "longrange, ten-year 1967-77 program for A. Ahlstrom's Varkaus mills ... wa-; followed quite closely and Varkaus became one of Europe's most efficient forest products complexes" (Ha-;s 1978).