‘Let’s Make a Deal’: A US Investment Proposal Shakes Up Denmark (and Greenland)

Approaching Thule Air Base by dogsled [Photo by Mikkel Schøler]
by Marc Lanteigne and Mikkel Schøler

Mikkel Schøler is CEO of the consulting firm Sikki

Less than a year ago, Greenland was pushed into the global spotlight in the wake of leaked reports about a United States government plan to purchase the country from the Kingdom of Denmark, despite the legal impossibility of such a proposal.

Now, Washington is trying again to secure a larger economic stake in Greenland via an announcement that the government of Donald Trump was seeking to offer an investment package [in Danish], worth approximately US$12.1 million (83 million DKK) to Nuuk, as an American consulate is scheduled to open in the Greenlandic capital later this year after being shuttered in 1953. The investment proposal underlined the ongoing interest on the US government in improving diplomatic and financial relations with Greenland, but also caused a political firestorm in Denmark, and unease in some Greenlandic political quarters over what this investment offer truly represents.

Since the beginning of 2019, the United States has begun to step up its Arctic policies, but in contrast to the previous administration of Barack Obama, the Trump government’s focus on the Arctic has downgraded the threat of climate change in favour of a sharp focus on great power competition, including the moving of military assets by Moscow to Russia’s Arctic regions, and China’s expanded Arctic political and economic presence under the aegis of developing a ‘Polar Silk Road’ as it furthers its interests in developing a distinct Arctic strategy [pdf].

The hapless attempt by Washington to buy Greenland from the Danish government, revealed in August 2019, was thwarted both by a dismissal of the idea from Greenland’s Prime Minister Kim Kielsen, as well as a lack of understanding of the Self-Rule Act of 2009 [pdf] between Denmark and Greenland, which enshrines the latter country’s right to self-determination and the option of independence. That the top tiers of the US government did not comprehend the specifics of the Self-Rule Act sparked temporary tensions between Denmark and the US, when the Danish Prime Minister, Mette Frederiksen, dubbed the discussion of selling Greenland ‘absurd’, as Prime Minister Kielsen had already declined the offer, thus underlining that the future of Greenland – both legally and politically – was in the hands of the Greenlandic people.

The American investment proposal, designed to promote US economic links with Greenland in key sectors such as education energy, resources and tourism, was nonetheless viewed by some policymakers in both Copenhagen and Nuuk as having a not-even-thinly disguised geo-strategic motive.

This impression may have been bolstered by a statement by US Ambassador to Denmark Carla Sands, shortly before the investment agreement was presented, which denigrated China and Russia as ‘governments who operate by different standards’ in contrast to the United States which espouses ‘transparency, collaboration, and democratic values,’. Only a very oblique mention of climate change, which has been affecting Greenland, and its Ice Sheet, to an alarming degree in recent years, was made, (‘with new sea lanes opening and milder inland climates, the Arctic’s landscape is rapidly changing,’), and there was no mention of the 2019 ‘purchase policy’.

During a follow-up press briefing by a US Department of State official after the investment plan was announced, it was made even more evident that the proposal was being made with a view to the recent regional activity of Russia, (which was acknowledged as having ‘legitimate interests’ in the Arctic), and China, which was described as ‘disconcerting’ followed by a reiteration, echoed by US Secretary of State Mike Pompeo last year, that China had no basis to refer to itself as a ‘near-Arctic state’.

The unnamed State Department official also added that the proposal was not another attempt to purchase Greenland, but was evasive on the subject of why the funding plans were not presented to the Danish as opposed to the Greenlandic government. It is worth noting that the US, and any other power, can freely interact with Greenland regarding any of the policy areas over which Greenland has already assumed jurisdiction, making the question difficult for the official, as the de jure and the de facto power relations within the Danish Commonwealth have collided in the past.

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Greenland Prime Minister Kim Kielsen [Photo by Mikkel Schøler]
The issue of China as part of the rationale behind the US-Greenland investment plan demonstrates that the Arctic has become another arena in the rapidly developing zero-sum game between Beijing and Washington over influence, and the Trump government has been alarmed at what it saw as a growing Chinese economic presence in Greenland in recent years. However, although China does have economic interests in Greenland, especially in the area of potential mining projects, its economic footprint within Greenland remains tiny compared to that of Denmark, which continues to provide Nuuk with an annual block grant [pdf] of approximately DKK 3.8 billion (US$550 million) per year.

The investment plan received praise [in Danish] from Greenland Prime Minister Kim Kielsen, who viewed the offer as a sign that work to improve relations with Washington was beginning to show results. Danish Foreign Minister Jeppe Kofod also noted that the plan was a potential first step in the development of larger economic relationship with the US, but other Danish politicians were considerably more hostile to the proposal, with some interpreting the offer as an attempt to circumvent Danish sovereignty in Greenland and to drive a wedge between Copenhagen and Nuuk at time when relations between the two capitals have been rocky.

Still, Denmark touts its soft power attraction as a way of keeping Greenland within the Kingdom of Denmark, as a commentary [in Danish] in the Denmark’s news service Altinget noted this week. The editorial stated that the ongoing effects of the COVID-19 pandemic illustrated the importance of close Greenland ties with Denmark as well as the importance of the Greenlandic healthcare and welfare system, which could be adversely affected by a too-close economic relationship with the United States.

However, the Altinget piece missed noting the bargaining position Greenland has been put in through the enactment of the Self-Rule Act, namely that Denmark has committed to fixed expenses, including the block grant, and to handling certain policy areas for Greenlanders who are still regarded as equal Danish citizens. This leaves Greenland free to pursue other avenues of economic cooperation without breaking its ties to Denmark.

In spite of this position, some Greenlandic officials were more cautious [in Danish] with their responses to the US investment initiative, noting that the country has been seeking to diversify their trade partners in recent years, but expressing apprehension about possible American influence tied to the economic package. Former Greenland Prime Minister Aleqa Hammond, now representing the country’s Nunatta Qitornai party, also saw the plan [in Danish] as both potentially lucrative, and representing a significant step in Greenland’s independent foreign policy development, given that the United States had offered the package directly to Nuuk as opposed to via the Danish government.

[Photo by Mikkel Schøler]
However, Greenland’s main opposition party, Inuit Ataqatigiit (IA), expressed concerns [in Danish] that Americans, rather than Greenlanders, would be the main beneficiaries of the investment packages, and another opposition party, Partii Naleraq, suggested [in Danish] that the agreement would give the US a considerable tactical advantage over other countries in future economic dealings with Greenland.

This political positioning from IA is interesting, given that the party has been quite vocal [in Danish] in calling for American investments in Greenland as a trade-off for the risks associated with hosting the US Thule Air Base and Greenland’s contribution to the American missile defence system in the region. This stance has been echoed by all parties in Greenland since the US ousted [in Danish] the Danish / Greenlandic firm Greenland Contractors from servicing the Thule base in 2017, subsequently giving the job to a shell corporation subsidiary of the American company Vectrus.

Greenlandic interests in direct American investments have been voiced since before the US-Danish Igaliku Agreement [pdf] was signed in 2004, a document which sought to update the defence agreements involving Greenland in the 1950s. Due to the vague language used in that statement, so far the US has managed to largely ignore that part of the arrangement.

Uummanaq Mountain at Thule Air Base [Photo by Mikkel Schøler]
After Vectrus was awarded the contract, Greenland’s Foreign Minister at the time, Vittus Qujaukitsoq – travelling with a subcommittee, including then-leader of Inuit Ataqatigiit, Sara Olsvig – very vocally [in Danish] demanded increased economic benefits from the American military presence in 2016, going as far as to threaten to ‘renegotiate the defence agreement’. This move, however, was seen as a step too far, and Mr Qujaukitsoq had to be reined in [in Danish] by Prime Minister Kielsen, prompting Qujaukitsoq to unsuccessfully challenge [in Danish] Kielsen as party president of his Siumut party during the following summer.

In the aftermath, the government of Denmark declared [in Danish] that it supported Greenlandic efforts to get the US more financially involved in Greenland. Whether the Danish response to the current American investment offer demonstrates being caught off guard, or a surprise that these efforts have worked, is still up for debate. In Greenland however, the Danish response from left and right is bound to raise eyebrows, as this leads to the question of whether Danish promises to assist Greenland in bringing US investments to the country have been for show. Such would undermine Denmark’s own soft power policies, which have formed the basis for hopes in Copenhagen that Greenland will remain within the Danish Commonwealth.

In short, although the US investment offer was financial in nature, it also appears to represent another stage in what could be a developing great power game in the Arctic, with Greenland very much in the middle of things.

Arctic News Roundup: 13-19 April

Sea ice off eastern Greenland [Photo via NASA/GSFC/Jeff Schmaltz/MODIS Land Rapid Response Team]
by Mingming Shi

1) Vigdís Finnbogadóttir, former President of Iceland, celebrated her 90th birthday this week, as reported in the Iceland Monitor. Vigdís was first elected to the position in 1980 as a single mother, and she served as Iceland’s President until 1996. One of the most internationally significant events during her tenure was the 1986 Reykjavík Summit, also known as the meeting between the East and West camps during the Cold War, when US President Ronald Reagan met his counterpart Mikhail Gorbachev, President of the then-Soviet Union, at Höfði House.

2) This week, an article on the severity of climate change and ice loss in Greenland was published in the British news service The Guardian. Scientists who research climate change and monitor ice sheets in Greenland pointed out that the ice melting process on the island is proceeding at an accelerated rate, in contrast with past decades.

3) A number of relics, dating back more than a millennium, were found around a mountain pass in the Innlandet region of Norway by a team of archaeologists. The discoveries, including clothing, weapons, snowshoes and animal remains, as reported in the New York Times, will contribute to further understanding of the region’s Viking Age, which lasted from between the eighth and eleventh centuries.


Arctic News Roundup 6-12 April

Black stone beach at Snæfellsnes, Iceland [Photo by Marc Lanteigne]
by Mingming Shi

1) According to Morgunblaðið, a song written in the local language in Iceland during the COVID-19 pandemic has been going viral on social media and shared by Icelanders. In order to cheer up citizens, and encourage people to stay home, given the restrictions of public gathering in the country now, Ferðumst innanhúss, (or ‘Let’s Travel Indoors‘ in English), or better known as Góða ferð (‘Bon Voyage‘), was written, and a video made by a group of Icelandic musicians has been released online.

2) The short-term prospects for Icelandic tourism are not promising, and numerous tourism companies have been struggling to survive due to low and even zero revenues, considering the COVID-19 situation and its longer-term damage to this sector, as explained by Jóhannes Þór Skúlason of the Icelandic Travel Industry Association (Samtök ferðaþjónustunnar (SAF) ), in an interview with Morgunblaðið.

3) Greenland has been considering establishing its representation in Asia for over five years, with China being regarded as one of the most optimal locations, due to the country’s large domestic market and its geographic proximity to other regional powers like South Korea and Japan. In order to expand its diplomatic network and fuel the economy of the nation, Nuuk has already opened four representation offices abroad. Currently, opening the next representative office appears to have returned to the government’s agenda.

4) A analysis piece about the current regional virus situation provided by Peter Bakkemo Danilov was published on High North News this week. The article summarised the circumstances in the Arctic, with several specialists interviewed, and argued that even though the region is less resilient than its counterparts in more southern latitudes, due to weaker healthcare competence and other related factors, the circumpolar north has seen a slower virus transmission rate so far, partially thanks to lower population densities and longer distances between towns.

5) A hole in the planet’s ozone layer over the Arctic sky was discovered by scientists according to the British news service The Guardian. Researchers explain that this phenomenon is uncommon, and seemingly caused by the recent unusually low air temperatures in the region. They have also predicted that the hole would be short-lived, and would likely not threaten local populations. The ozone layer shields Earth from harmful ultraviolet radiation emanating from the Sun, and in 1987, the Montréal Protocol was struck by the international community to ban substances which could erode this protective band.

6) CBC Nunavut published a clip of a widely-circulated ‘brush video’ featuring a number of women of Inuit background from across Alaska, Greenland and Nunavut, profiling their makeup and traditional garments.

Arctic News Roundup: 30 March – 5 April

[Photo via Pixabay]
by Mingming Shi

1) Marc Lanteigne, Chief Editor for Over the Circle, penned an introductory article on the importance of the internet in the Arctic, especially under the current global situation. The piece summarised the state of connectivity in the far north, using cases from Finland, Greenland and Nunavut. 

2) Morgunblaðið, an Iceland-based news agency, reported the story of how the Icelandic President, Guðni Th. Jóhannesson, and his family have handled the COVID-19 pandemic. Generally, the President has issued two mock ‘presidential decrees’ to his family members, and has adjusted to the current social distancing directives suggested by experts, including in terms of delaying visiting his retired mother.

3) According to RÚV, the national broadcasting company in Iceland, the country has sold lamb meat to China for the first time. Currently, there is only one local company which has obtained the licence for lamb sales to China. The first shipment involved approximately twenty tons of meat, and appears to have been well-received in the Chinese market.

4) CBC News in Canada selected a series of photos from readers of the week. These eight pictures were taken in the Northern part of the country, featuring local scenery such as dancing northern lights, an eagle enjoying its hunting harvest, to the social lives of inhabitants in the High North cheering up their communities during the difficult time of the COVID-19 outbreak.

5) The Economist published a comment about the winter of 2019-20, the warmest-ever recorded in the northern hemisphere on land. One of the variables used in the study was  the phenomenon of ‘Arctic oscillation’ during northern winters, a term describing a natural phenomenon of the air pressure between the North Pole and lower latitudes. 

6) An article on the current situation of COVID-19 in Greenland was published on Arctic Today, written by Martin Breum, a Danish journalist on Arctic affairs. The piece gave a concise overview of the general situation of the pandemic on the island, noting that a small number of infected cases has been found in Nuuk, the capital of Greenland, but the rest of island was still free from the virus. To cope with the circumstances, a ban, set by the Greenlandic government, on normal entry into or exiting from Nuuk has come into force.

In addition, Greenland has temporarily cut most of its transportation ties with outside. It is not the first time that Greenland has suffered from imported deadly diseases, as this also happened back in the Danish colonial period. The article notes that nowadays, even though Denmark is still assisting Greenland, its former colony, in many ways, including medical support, Greenland itself has developed a much more modern and advanced healthcare system. 

The Internet in the Arctic: Crucial Connections

[Photo via Pixabay]
by Marc Lanteigne

The Arctic, like much of the rest of the world, has been trying to address the crises created by the COVID-19 pandemic over the past two months. Also, in the Arctic as with the rest of the globe, the internet has become an essential tool for education, information, and diversion as more and more people enter into lockdown in the far north.

Connecting the Arctic and its approximately four million inhabitants has been, to put it mildly, a logistical challenge, given the challenges of ‘north-south’ geographic isolation, difficult environmental and climate conditions, and huge expanses between population centres. In many areas of the Arctic, internet quality varies, and access suffers from low quality and high costs, as well as coverage gaps. Improved internet infrastructure, despite being considered a priority for many Arctic governments’ development policies, still lags behind that of many other parts of the world. This has been an issue for a wide variety of northern economic sectors, including communications and media, education, health services, social services and transportation, as well as emergency services and the protection and development of Indigenous languages and culture.

It was only late last year that the first truly high-speed internet reached the high Arctic, in the form of a satellite system serving the needs of the German research vessel RV Polarstern. The multi-state expedition teams housed on that ship, which is currently in the Central Arctic Ocean, north of Svalbard, have been able to make use of internet speeds of over 100 Mbps (megabits per second) to transmit data findings and communicate with the rest of the world.

‘Connectivity’ was a primary theme [pdf] during Finland’s period of chairing the Arctic Council in 2017-9, acknowledging the need for regional alternatives to landlines such as satellites, undersea cables and wireless. Helsinki sought to build on the recommendations outlined in the Council’s Task Force on Telecommunications Infrastructure in the Arctic (TFTIA), which was founded in 2015 at the Arctic Council ministerial meeting in Iqaluit.

[Photo by Whrelf Siemens via Picspree]
In the TFTIA’s 2017 report [pdf] on the state of telecommunications in the Arctic, it was noted that the region is unsuited for a single method of providing improved connectivity, and that quality varied considerably around the region. The report concluded more effort was needed on building infrastructure, taking into account the specific needs of Indigenous persons, while encouraging cooperation between governments, business and research institutions in networking the Arctic. Since assuming the Chair of the Arctic Council in 2019, Iceland also has been seeking to make telecommunications a priority for the region as part of its platform of addressing the specific needs of far northern people and communities.

Yet, these ambitious communications infrastructure plans have at times run into both economic and logistical roadblocks. For example, in December last year the Canadian government published a strategy paper regarding the country’s connectivity, and among the recommendations were addressing the gaps in access both between urban and rural regions but also between the Canadian North and the rest of the country.

The paper explained the vulnerabilities of Northern communities to breakdowns due to the limited number of routing options, as well as the problems of improving connection speeds, stating that, ‘They are clearly too slow when an x-ray cannot be uploaded in a Northern community unless other Internet users are temporarily kicked off the Internet.’ Northern communities have been cautiously welcoming of Ottawa’s plans to develop universal broadband systems, but local specialists have stressed that small providers should be allowed to assist in that process, arguing that large national-level firms in the country have not so far delivered on their own promises of improving northern internet services.

The fragility of Northern Canadian internet networks was again illustrated last month when a cable was accidentally cut in northern British Columbia, resulting in loss of internet, long distance phone and television services in parts of the Northwest Territories and Yukon for a period of several hours. A similar incident took place in 2016 when a fibre-optic cable was inadvertently damaged during construction work, also in Northern BC, resulting in the breakdown of internet services in parts of Canada’s northern territories. As well, two separate internet cuts in the Yellowknife region during the summer of 2019 were estimated to have cost C$10 million (US$7 million) in lost revenue.

The arrival of the coronavirus in the Canadian North, and calls for citizens to self-isolate as a result, will likely place further strains on the network, resulting in requests in Nunavut for citizens to avoid overuse of the internet and with telecom companies operating in the Canadian Arctic urging the easing of usage caps and limits to data speeds. Other areas of the Arctic are also relying more directly on internet services as a result of the coronavirus, including due to the closing of schools and the moving of classes online.

Plans to create new options for internet connectivity in the Arctic have also met obstacles of various types. In late 2019, the British firm OneWeb announced it was developing an enhanced satellite-based system, which would vastly improve internet quality in much of the Arctic. However, last month the economic fallout from the coronavirus forced OneWeb to file for Chapter 11 bankruptcy, placing the Arctic satellite constellation plans in doubt. As well, last year an Alaskan firm, Quintillion Subsea, was jolted by a massive wire-fraud scandal, affecting that firm’s plans to lay down internet cable in the Arctic Ocean.

Another regional cable project, Arctic Connect, backed by the government of Finland and involving the deployment of new cables to connect East Asia with northern Europe via Siberia, potentially as part of China’s developing ‘Polar Silk Road’ initiatives, has also run into both economic and political headwinds over the past year. Meanwhile, Moscow confirmed in March of 2019 that it was seeking to develop its own closed cable system, named the ‘Multi-service Transport Network System’ (Мультисервисная транспортная сеть связи), along the Siberian coast for strictly military purposes, according to the Russian news service Izvestia [in Russian].

[Photo via Pixabay]
Finally, plans for an internet underwater link connecting Nunavut and Greenland, specifically developed to assist the north-eastern Nunavut region of Qikiqtaaluk, encountered an obstacle when the estimated cost of the project increased considerably in October 2019 to C$209 million (US$147 million), raising questions about the project’s cost/benefit ratio. However, as much of the Canadian Arctic is dependent upon satellite networks to gain access to the internet, undersea cables are still viewed as a potentially cheaper and more efficient alternative.

As for China, the Arctic has become a major area of interest for that country’s flagship ICT (information and communications technology) firm, Huawei (华为) as the company seeks to promote its fifth-generation (5G) communications infrastructure to other states. However, Huawei’s results in the Arctic markets have been mixed at best. The US government has been pressuring other governments to shun 5G investment offers from Huawei, and in the Arctic, some states have remained ‘on the fence’, such as Canada and Iceland. Others, such as Norway, have opted to select alternatives, with the Norwegian firm Telenor announcing in December last year that it would choose a rival firm, Sweden’s Ericsson, for its 5G development plans, in the wake of security concerns expressed by the country’s intelligence services.

Relations between Huawei and the government of Denmark have also been rocky. Elsewhere in the Danish Kingdom, Greenland decided in December 2019 to also select Ericsson for its 5G development, (the island nation was formally upgraded to 4G connectivity in late 2018). [Addendum: In making the announcement that Ericsson would be chosen for 5G upgrading, Greenlandic communications firm Tele-Post explained [in Danish] its decision by noting the logistical problems of switching from Ericsson, which has been the provider of Greenland’s 4G network since 2017, to another company.]

As well, in the Faroe Islands, reports surfaced during the same month that Chinese officials had attempted to link the prospect of enhanced Chinese trade with the Faroese government accepting a Huawei bid, resulting in a backlash from the United States.

Microsoft office in Tromsø [Photo by Marc Lanteigne]
Unsurprisingly, given the growing closeness of Sino-Russian relations, Moscow has welcomed Huawei investment to develop high-speed wireless network infrastructure, as well as viewing the Chinese company as a promising partner for research in emerging technologies such as artificial intelligence. However, despite ongoing brittle relations between Canada and China, Huawei announced in July 2019 that it was partnering with two Canadian firms to provide high-speed internet to the Arctic territories and northern Québec, sparking much debate, considering Ottawa had yet to decide whether to permit Huawei to invest in Canadian 5G infrastructure.

In addition to the prospect of new and enhanced internet connections in the Arctic, the region has been viewed as a potential data storage site, given its cold climes which reduce the need for cooling systems. Sites in the Nordic region have been especially popular for data storage infrastructure. For example, Iceland has become known as an ideal site for various data storage facilities, as well as cryptocurrency production farms, and in 2013, Facebook opened a data centre of its own in Luleå in northern Sweden. In May last year, Google announced it would be investing €600 million (US$670 million) in the expansion of its data facilities at Hamina, Finland. More recently, parts of Siberia have become known for data storage potential, including for the purposes of Bitcoin mining.

Global demand for data storage is expected to accelerate even further in the coming years after several milestones were reached in the past decade. In 2016, the world officially entered the so-called ‘Zettabyte Era’, meaning that the total amount of internet traffic had exceeded one zettabyte, or 1,000,000,000,000,000,000,000 [1021] bytes, while in 2012, it was estimated that the total amount of digital data produced had reached one zettabyte during that year. More recently, there have already been initial signs that the current pandemic is further driving global demand for data storage and cloud computing services as more people are self-quarantining. As the need persists for energy efficient and green solutions to housing data, the benefits of building in the Arctic are likely to factor into such future planning.

[Photo via Pixabay]
This month, it was reported that the software development firm GitHub, owned by the US computer firm Microsoft, was preparing to use an abandoned mine on Spitsbergen Island in Svalbard to store data, specifically open-source code, on film reels as a backup system which, in theory, could protect the information for centuries. Svalbard already houses the Arctic World Archive (AWA), a data storage project jointly overseen by the Norwegian firms Piql and Store Norske Spitsbergen Kulkompani, which was established in 2017. The AWA site is being used for various types of data storage by several organisations, including the European Space Agency, UNICEF, and the Vatican Library.

The opening up of the Arctic to greater economic activity may slow as a result of the pandemic. However, the attractiveness of the region to numerous sectors, including extractive industries and shipping, as well as growing international scientific interest in the Polar Regions, will mean that future development of the region will rely more directly on the virtual world. The question now is whether the current (and future) building blocks of the internet are prepared to meet that demand in the Arctic.

[The author would like to thank Mikkel Møller Schøler and Mingming Shi for their valuable assistance in the writing of this article.]