Three years of working in Greenland has brought me into project partnerships with Danish and American agencies. From both, there is a clear strategic interest in Greenland. But the outlook from each is different. I’ve seen the Americans offer to run workshops to build local knowledge and competence, offer logistical support, send across advisors and technical staff from the highest levels, all at no cost. And this is commonplace across the board – in education, industry, resources. Driving my suspicion of such gracious offers is the adage, ‘There’s no such thing as a free lunch’. But after three years, my conclusion is the Americans are playing the long game.
And what about the Danes? Greenland relies on a block grant of about 614 million dollars each year from Denmark, almost 25% of Greenland’s gross domestic product. That’s a sizeable expense to Denmark – 1% of its own GDP. So why don’t the Danes cut Greenland loose? Greenland wants to go, even though some realise their dreams of independence are financially beyond reach. Is it a sense of duty of the Danes to the Greenlanders? Well, perhaps for some. But does that seem likely at a political level in the times we live in?
Here’s one reason Denmark holds fast to Greenland – a reason that Denmark is not so keen to discuss: NATO contributions. America currently operates the Thule Military Airbase in far northwest Greenland. The base has been in operation since the cold war in a strategic location in the high Arctic between the Americas and Russia, becoming increasingly strategic again. In exchange, Denmark receives a reduction in its NATO contributions from the standard 2% of GDP required for European countries. The details of the agreement itself are not public, so we don’t know how much the reduction is. But in 2017 Denmark should have contributed 1.22 billion dollars to defence to meet its commitments. Instead it spent 1.04 billion. The discrepancy of 180 million dollars might seem like peanuts, but it’s about 7.4% of the GDP of Greenland – almost a third of the cost to Denmark of their block grant to Greenland. This means that the cost to Denmark of the block grant may be considerably less than most people think. And of course, the strategic importance to Denmark of an enormous landmass between America, Europe and Russia, hosting American military bases, should not be underestimated. Is this worth another 430 million dollars per annum – 0.7% of their GDP? You bet. To America, Denmark without Greenland is an inconspicuous European country – small in every sense. With Greenland, Denmark has significant regional negotiating power.
Some would argue, given Greenland’s self-governing status, that the financial benefit of hosting America’s military in Greenland should go to Greenland, not Denmark. But as no ‘real’ money changes hands, this is tricky, and a political minefield that goes to the heart of the power struggle between Denmark and Greenland.
Not to mention America, waiting quietly in the wings…
