The United States will open a consulate in Nuuk, the capital of Greenland this year, and provide $12.1 million in economic aid to the country in anticipation of expanding its presence in the Arctic area and also to protect its interests amid growing competition from Russia, and China.
“We … are in the process of adjusting our Arctic policy to today’s new strategic realities,” a senior U.S. State Department official said at the briefing on April 23, “we can expect, … the rapidly changing Arctic system to create greater incentives for the Kremlin and the PRC to pursue agendas that clash with the interests of the United States and our allies and partners.“
The $12.1 million aid package, developed “in consultation with the Kingdom of Denmark and the Government of Greenland,” focuses on promoting “competitive and transparent” investments and new technologies in the energy and mining sector, said the official. It also includes a capacity-building program aimed at university education in the fields of tourism and sustainable management of land and fisheries, as well as the development of tourism in Greenland.
The Greenlandic government accepted the package and expects that the aid will primarily take the form of ”consultancy and advisory assistance from U.S. experts,” and will include the participation in the existing U.S. programs, according to a Greenland government statement.
The U.S. consulate in Greenland is due to open this summer or later this year, depending on the COVID-19 situation. It will be staffed with two U.S. officers and will hire five local people, said the official.
Greenland established its representation in Washington, DC in 2014 but the United States has not had any diplomatic presence in Greenland since 1953.
The announcement came less than a year after President Donald Trump expressed an interest in buying Greenland which was dismissed by Greenland’s Foreign Ministry and Denmark’s Prime Minister, Mette Frederiksen.
“They have clearly crossed the line,” said Karsten Honge, member of the Danish parliament’s foreign affairs committee for the Socialist People’s Party, a government ally.
“It’s completely unheard of that a close ally tries to create division between Greenland and Denmark this way,” Honge told Reuters.
However, Danish Foreign Minister Jeppe Kofod welcomed the move, saying Greenland had for years sought to develop its small economy by opening up to the world and seeking foreign investments.
“I think it’s encouraging that it is the United States, a neighbor, and close ally, who is making this grant,” Kofod told Reuters.
The State Department official denied Washington’s efforts were intended to create divisions, saying the United States had been working closely with Denmark for months on this initiative.
“I think what we’re doing here is good old-fashioned diplomatic tradecraft designed to enhance our engagement,” the official said, adding the aid package was not “designed to pave the way to purchase Greenland.”
Competition from China and Russia
The goal of the new U.S. Arctic strategy is to secure its interests in the Arctic region and to ensure security and stability in the region in the face of the expansion of the military and economic presence from Russia and China, the senior State Department official said at the briefing.
The U.S. recognizes Russia’s legitimate interests in the Arctic as Russia is an Arctic state and wants to cooperate with Russia, but has concerns with “Russia’s military buildup,” the official said.
Russia has also announced on the same day an initiative to build “the world’s most powerful nuclear icebreaker,” as a part of its new Arctic strategy announced earlier this year, according to Breaking Defense. Also, Russia will build more nuclear icebreakers, as well as make infrastructure improvements in its polar region which will include modernizations of airports, and building railways and seaports reported Breaking Defense.
The United States has two icebreakers and plans to build six more, but China also has two, reported Breaking Defense.
China claimed that it is a near-Arctic state and expressed its interest in the Arctic’s natural resources as well as in the development of Arctic Sea routes for shipping. However the United States disapproves of this claim due to the Chinese regime’s coercive and unfair behavior that “often disregards international norms, as it has in the South China Sea,” the official said. For example, China tried to coerce the Faroe Islands to sign a 5G contract with Huawei by threatening the country that it would drop a trade agreement, the official added.
The United States cooperates with other Arctic states through the Arctic Council, an intergovernmental body established in 1996 for coordinating the sustainable development of the Arctic. It consists of all Arctic states Canada, Denmark, Finland, Iceland, Norway, Russia, Sweden, and the United States.
Greenland’s Natural Resources and Economy
Scientific research indicates that over the last forty years Arctic Sea ice has contracted. That may lead to opening new passageways on the Arctic Sea which can shorten the travel time between Asia and the West by about three weeks, thus creating more opportunities for trade.
Greenland, an autonomous Danish territory, has a population of only 56,000, mainly Inuits. It is located in the subarctic climate zone and 80 percent of its territory is permanently covered with ice. Its economy mainly depends on fishing, which makes the country’s income vulnerable to price fluctuation mitigated by annual grants from the Danish state, according to the Greenland government website.
Retreating ice in Greenland could uncover its potential oil and mineral resources, that, if successfully tapped, could dramatically change the island’s fortunes.
In recent years Greenland has sought an additional source of income as an alternative to its traditional fishing industry. It has made efforts to develop its mining and energy sectors through attracting foreign investment, according to the Greenland government.
Greenland is rich in many natural resources including coal, lead, iron ore, zinc, rare earth elements, gold, precious gemstones platinum, and uranium. Studies indicate that the country may also possess oil and natural gas.
Reuters and the Associated Press contributed to this report