Greenland - icy Path to Independence

On November 25. Greenland held a referendum on 'Namminersorneq' – self rule. Many international observers seemed to be slightly misled by this and commented as if the Greenland community won it's independence from Denmark over night.
The purpose of the referendum was to obtain the Greenland Peoples acceptance of a new treaty between the home rule of Greenland and the Danish Government that will replace the current law of home rule from 1978. The content of the new treaty is to define the areas where Greenland step by step could take over the regulatory and administrative areas from Denmark, that is currently not covered by a treaty, which costs that Greenland will have to carry for each of these areas and which economic impact exploitation of oil (believed to be in plenty supply in North-East Greenland) will have on the Danish annual contribution to the Greenland Economy.
It also clarifies that Greenland will have the right to explore natural mineral resources.
But total independence is in no way just around the corner – the realities are too harsh.
The annual Danish contribution is 3.5 billions Dkr – about 590 Mio $, or one third of the Greenland GDP, 2/3 of the Home Rule income. Next year the Greenland fiscal plan has a deficit of 300 Mio Dkr, mainly allocated to investment in infrastructure , new water driven power plants, harbours and other items needed to attract mining industry. (Read Lars Emil Johansen’s comments to the fiscal law for Greenland for 2009 (In Danish))
So there is really not so much available to start financing new areas for many years to come – Police and Legal autonomy is estimated to cost at least 300 Mio Dkr, but the real problem is – as in many sectors – lack of skilled Greenland speaking trained policemen, judges, lawyers, administrators.
What was expected to improve this position has now been postponed for several years: The mines that would contribute to the Greenland economy by taxes on workers and spin off from investments, are faced with ice cold outlook: The Bloomberg metal ad mining index is down to 1/3 compared to spring time, the only working goldmine is closing down because of heavy deficit, and the Alcoa aluminum company that still has a LOI to start building an Aluminum plant once a couple of more power plants are installed, is faced with adverse trends, stopping new investments, closing down some facilities.
So there is not much hope for the Greenland self rule quickly to undertake new areas and being able to pay for it. Even if 75% votes yes.

So the referendum may be only little more than a political victory for the parties in Greenland that advocated for increased self rule. But as such it will be helpful for a more equal partnership with Denmark. The Greenland language will be the national language, Danish and English 2nd
and 3rd. Language. The People of Greenland will be recognized as a separate people according to the International Law. Even many resident Danes in Greenland voted for the acceptance of the treaty, and one of the stated that 'Now the handle is on the inside of the door, they are free to open it at any time!'. Some even expect the requests for support from Denmark from now on will be more realistic.

The strategic importance of Greenland has been clear since 2. World War – the Thule Radar is an important part of the US defense system ever since the Cold War and particularly since Ronald Reagan's 'star wars' project was launched. The latest treaty is dated 2004. A Greenland with substantial oil reserves would of course be even more interesting for US, and there is no doubt that the Greenland politicians are very much aware of their favorable position, particularly the more socialistic IA party would probably have hoped for a faster way to independence – but also very much aware of the risk of ending with a heavy embrace by the American neighbour.
But Greenland is also a symbol of the global warming – Al Gore was early to visit the melting glaciers, the Danish Climate Minister, Conny Hedegaard, enjoys showing her colleagues the glaciers at the Icefjord, now moving at a speed 20 times the speed in 1980'is.
It suddenly dawned on the Greenland political leaders that a part of the new treaty and earlier treaties with Denmark on the climate issues demanded that Greenland stuck to the Danish scheme of reducing the CO2 emissions. This however, may be completely impossible. Where could the savings come from once Alcoa's aluminum plant starts producing CO2 in a volume 20-40 times the current Greenland emission? As the Greenland Industry Association points out, Greenland has not yet become industrialized and should be allowed special treatment. This conflict is going to be interesting with an Obama administration in US and with Denmark hosting the UN climate conference in November in Copenhagen. From both sides the demand for CO2 reduction will be difficult to neglect.

And again, if the aluminum plants are postponed, and mines will be delayed for decades, the financing of increased independence is non-existing, and the best the Greenland Self rule Government can do right now is to invest heavily in education and try to become independent of Danish and other experts in key areas like mining, IT, transportation, construction – and administration.

The current financial crisis has not yet hit Greenland with any strength – I participated in a seminar for the ICT key players in Greenland, Nuuk last week and presented the overall problems with a particular twist on Greenland strategic options that are still open for discussion. The investment in infrastructure has called for the installation of a sea cable, and TeleGreenland expects to open this almost 1 billion Dkr. investment in March 2009. Still the radio stations transmitting the signals along the coast needs additional investments – probably around 100 – 200 Mio Dkr. during the next 5 years. This is a lot for a country of less than 60.000 inhabitants, and the political pressure from the Greenland Government to keep investing is enormous; during the last few years a GPS system for sheep farmers have been built up at a cost of 65.000 Dkr. pr. Sheep farmer. And still Tele Greenland has managed to deliver a surplus to the Home Rule – it’s only owner.

It is ironic to note that at the same time as the educational system and telemedicine suddenly becomes possibilities within reach, the politicians are trying to step in and open broadband connections to everybody as a low priced flat rate. It seems to be a recurring problem in Greenland where political participation in the major industries has been – to put it best – a very close alliance. In this case it would result in drowning the capacity and taking any sort of control out of a professional company management team. The price parameters could in stead be used as a budget support to education and health sector while TeleGreenland build up its capacity - and then eventually adjust rates downwards. Compare with the Tele Company in North West Canada that has been a heavy receiver of subsidies for decades.

But so far TeleGreenland has got its financing in place – next in line may not be so lucky – whether it is Royal Greenland, Umiaq Line, the construction sector, AirGreenland. Tourism will probably soon begin to drop slightly housing is still in short supply in the bigger cities.
In the short run the lower price of oil will benefit the fishing industry, but demand for fish is also likely to drop.
There is no doubt that even if Greenland so far is hiding behind Denmark, the global crisis will be felt. And the first victim will be the mines - and with the mines the hope of early independence.

But the Greenland people will undoubtedly struggle to protect their culture, language. If you have never really encountered this people, listen to this beautiful christmas carol performed by a choir of Greenland women in their traditional dress: Guuterput on Facebook.
Merry Christmas – Santa Claus is highly needed everywhere this year. But remember: He lives in Greenland! I met him at his home last Saturday!

Arctic Challenges (1)

In May ministers from the 5 arctic countries surrounding the Northpole met in Ilulissat, Greenland to try to reach agreement on the process needed to determine rights for exploration as well as rights for sailing in the arctic area; as a consequnce of the global warming, it is now evident that explorations for oil and natural resources would be only a matter of few years away, and as the polar cap ice cover will retreat, new lines for freighters and cruising vessels would open up for more traffic. Both activities are bound to have a huge impact on the very fragile environment in the Arctic. (See http://benmuse.typepad.com/arctic_economics/2008/05/representatives-of-the-five-arctic-countries-russia-the-us-canada-denmark-and-norway-meet-tomorrow-at-ilullissat-on-greenlands-baffin-sea-coast-to-discuss-their-territorial-claims-arctic-powers-hold-summit-in-greenlandafp-may-27.html )

The choice of Ilulissat for this conference is not a coincidence: The glacier at Ilulissat Icefjord is the most productive glacier on the Northern Himesphere producing more than 20.000 million liters of water pr. day corresponding to the City of New York's water consumption in a year.

It is a part of the World Heritage and Denmark/Greenland's 4th landmark on this prestigeous list. http://whc.unesco.org/pg.cfm?cid=31&id_site=1149

The glacier is running faster and faster - from 20 kilometres pr. year a few years ago to now 40 km/year.

The meeting ended on a positive note, in spite of the fact that US never ratified the UN 1982 Sea Convention, Canada, Russia, Norway, US and denmark/Greenland agreed to use this as a foundation for defining rights of traffic and exploration in the future.

As part of my trip to participate in the IT Council Meeting in Sisimiut on June 11-12th, we first visited Ilulissat, located 250 km. north of the Polar circle. A beautiful city on the brink of the Disco Bay. It is the 3rd largest city in Greenland, but with it's 3.500+ inhabitants, the humans are outnumbered by the sledge dogs. These huge dogs are out of work during the summer period, and they spend the time breeding and changing their fur.

The noice these dogs are capable of producing is unbeleiveable, so they are located just outside of the city - but for vistors probably not far enough. They are definitely NOT pets - each year tourists and children are attacked by these half-wild animals. In this case the procedure is that they are shot immediately. In winter time it is a real tourist pearl to sit on top of a Dogsledge - typically 2-3 meters long and drawn by 8-10 dogs. The leader dog is almost always an old female. A young male dog is tied directly behind her to ensure protection from the old 'rouges'. The strongest and biggest males are tied closest to the sledge beside each other to compete. The first hour or so should be awful sitting on the sledge; only by that time the air has left the dogs' stomachs and then the air feels a lot better !

During our stay in Ilulissat we took a boat to Rodebay, a small village with 50 inhabitants an hours sailing up the Disco Bay. This place - The Red Bay - was originally used by the Dutch whalers, who in 1600 and beginning of 1700 used the bay for extracting the whale oil, by then a very precious thing as it was lightning the houses of Europe. As Denmark started to exploit Greenland, at that time and until May 1. 1979 where the new law on Homerule for Greenland was accepted, a genuine colony with a mixture of nice preachers and rough merchants. One of these, Jacob Severin, manned his vessels, took 5 dutch ships as prison and created the alternative whaling spot Jacobshavn, now adays Ilulissat, in 1741.

http://www.go2greenland.com/pages/Settlements-and-Icebergs-of-the-Diskobay.html

Ilulissat has 3 hotels and a youth hostel and is a marvelleous starting point for Arctic ventures. Because of the reputation, the city is now hosting more than 20.000 tourists a year and it is beginning to take it's toll on the route along the Icefjord. (Seee the upper picture). The area holds old graves from the original pre-escimo people, the Saqqaq culture, believed to come from Sibiria. The current population comes from the Aleutian Islands and arrived only around year 800, aproximately at the same time as the Nordic Vikings reached the southern tip of Greenland sailing from Iceland.

Ilulissat does not any longer rely on whaling; A quota of whales are each year allocated to Greenland, but the main catch is shrimps and fish. Because of the content of oxygen in the large icebergs that are melting in the Disco Bay and outside the Icefjord, this gives life to plankton and hence create a very rich environment for a lot of fish - and seals - to thrive. But the global warming is also chaning the pattern of fishing: Some years ago the cod declined sharply, and now the shrimps are declining. This is a potential threat to the economy of the Greenland fishing industry. But more about alternatives in the next blog.

We left Ilulissat on a sunday evening sailing through the sunny polar night to Sisimiut. The traffic between the cities on the east coast relies mainly on this line, the Umiaq line, and the passenger ship arrives twice a week to the towns from Narsaqq in South to Ilulissat in the north.

Also Greenland Air is an important means of transporation, relying mainly on their fleet of Dash 7 - 4 engined monoplans with a very robust landing gear (compared to 'crash 8' )