In spotlight after Trump offer, Greenland sees chance for an economic win

"When you stimulate investment in an area like Greenland, magic wonders can happen in mining, tourism, and infrastructure."

By Jacob Gronholt-Pedersen, Reuters - August 27, 2019
Snow covered mountains rise above the harbour and town of Tasiilaq, Greenland, in a June 15, 2018 file photo.(Lucas Jackson / Reuters File Photo)

COPENHAGEN — Greenland’s leaders want to use global interest in the Arctic island aroused by President Donald Trump’s eye-catching offer of a sale to stimulate investment and earn more from U.S. military activity there.

Some business leaders and officials are seeking to translate the unexpected publicity into badly-needed ventures in roads, airports, hospitality and mines.

“When you stimulate investment in an area like Greenland, magic wonders can happen in mining, tourism, and infrastructure,” said Verner Hammeken, chief executive of Greenland’s Royal Arctic Line.

Trump last week called off a planned visit to Copenhagen, where he was to meet Greenland’s leader, after his idea to buy the vast island, home to only 56,000 people, was rebuffed.

Greenland is important for the U.S. military and its ballistic missile early warning system, as it balances growing concerns over Russian and Chinese activity in the Arctic.

The United States maintains an air base in Thule in Greenland’s northwest but doesn’t pay any rent under a 1951 treaty with Denmark.

Greenland had long wanted more in return for the base’s use. But discontent worsened in 2014 when the U.S. military canceled a contract with Greenland Contractors, a partly state-owned firm that had serviced the base for more than four decades.

And in 2017, the Department of Defense picked a U.S. company instead of Greenland’s Royal Arctic Line to ship goods to the base, causing further resentment among politicians and locals.

“It is only natural that we should make the most of the U.S. presence in Greenland, as we accommodate the defense cooperation on our land,” Greenland’s minister for foreign affairs, Ane Lone Bagger, told Reuters in an interview this week.

‘Our fair share’

The service contract with Greenland Contractors was worth about 600 million Danish kroner ($89 million) a year before it was ended and was an important contributor to the small economy, which mainly relies on fishing and annual grants from Denmark.

“To the greatest extent possible, it must be Greenlandic companies as well as Greenlandic workers who service the base. It is only natural that we get our fair share,” she said.

As a result of the strained relations, formalized annual meetings in the so-called Joint Committee between officials from Nuuk, Copenhagen and Washington have been on standby since 2014.

“For five years we’ve tried to get the Thule contracts back, but at this point I don’t have much hope,” Aaja Chemnitz Larsen, a lawmaker from opposition party Inuit Ataqatigiit told Reuters.

“The current America First strategy has not helped the relationship between Greenland and the United States,” she said.

The White House did not respond to a request for comment. The Pentagon said it “will prioritize activities in the Arctic that support homeland defense” and contribute to maintaining “balances of power in the Indo-Pacific and Europe.”

Last year, the U.S. Department of Defense said it wants to “pursue potential strategic investments vigorously,” including airports in Greenland for both military and civilian use.

The Danish foreign ministry said it is in contact with the U.S. administration about resuming Joint Committee meetings and that it will work “to ensure maximum benefit to Greenland.”

Greenland is an autonomous Danish territory, but Denmark handles the island’s security and foreign affairs.

Royal Arctic Line, a state-controlled company that lost the shipping contract to Thule, continues to sail to nearby towns.

“It seems a bit strange that you use an area in a country without supporting that country’s infrastructure,” said Royal Arctic’s Hammeken, formerly of Danish shipping giant Maersk.

He said he regrets losing the contract, and there is “clear value in combining civilian supplies with military activity, especially in rural areas that are difficult to access.”

He would like more U.S. investment: Greenland has no roads between its 17 towns and one commercial international airport.

“We’ve seen that when the United States catches interest in certain areas around the world, investments from private American companies follow,” he added.

Additional reporting by Idrees Ali and Steve Holland in Washington.