China

In a new piece for The Economic Standard, ARPN’s Dan McGroarty puts the current controversy over President Trump’s quip about wanting to buy Greenland from Denmark in context.

Invoking President Truman’s offer to purchase Greenland in 1946 as well as Secretary of State William Henry Seward’s 1867 purchase of Alaska — for which he received much ridicule at the time (hence the term Seward’s Folly) — McGroarty argues that while “[a]pparently there’s something in the subject of Arctic land purchases that encourages levity” (…) “[t]here shouldn’t be.”

He recounts how Denmark came to control Greenland in the first place and explains why it has turned into a hot commodity (pun intended):

“the result of imperial expeditions that led to declarations of Danish sovereignty in the early 1800’s.  As for buying Greenland, there’s no evidence the indigenous Inuit of that day were compensated.

Today’s interest in Greenland is what’s beneath the ever-shrinking icecap, as Earth’s temperature warms:  Known resources of at least eight metals and minerals – taken as individual elements, including the rare earths (REEs) and platinum group metals, that’s 29 elements in all, nearly 1/3 of the naturally-occurring elements in the Periodic Table.  That gives Greenland, soon or sometime in the future, a foothold as a major metals supplier to the 21st Century Tech Revolution.

And while the U.S. most emphatically may not be purchasing Greenland, that’s not to say other interested parties aren’t already buying up strategic bits of real estate.”

McGroarty goes on to give examples of China’s “economic diplomacy” in Greenland, a topic we previously explored on our blog as well. His conclusion underscores the significance of the region and the need for more active engagement.

“In other words, Greenland may not be for sale, but its resource riches surely are.  From Truman’s offer to Trump’s Tweets, Greenland is a hot property.  Surely, Secretary Seward would have understood.”

While a deal is not likely to happen, and some question whether the comment was more quip than opening offer, President Trump’s recent interest in buying Greenland from Denmark has done one thing: bring Greenland and the Arctic into focus.   The President’s suggestion has been ridiculed by many, but from a strategic perspective — unlikely as it may be to see a “For Sale” sign planted on the Greenland coast — Greenland’s resource value is significant.

Unbeknownst to many because outside the media limelight, the Arctic has been one of the sites of looming battles and territorial disputes in the resource war theater, with both China and Russia having stepped up their activities in (and relating to) the Arctic circle region in recent years.  The U.S. is beginning to realize the significance of the region and the need for more active engagement. 

As Mark Rosen writes for the National Interest, Secretary of State Mike Pompeo’s open Challenge of Chinese and Russian Arctic intentions at the May 2019 Arctic Council Meeting in Rovaniemi, Finland “marked a dramatic rhetorical shift in the usual diplomatic line that the United States regarded the Arctic as a venue for cooperation and research and that climate change is the clear and present danger to Arctic security. Climate change unquestionably is altering the Arctic landscape and will have long term effects. However, Pompeo’s statement was a significant expansion of the warning by former Secretary of State Rex Tillerson that the United States is ‘late to the game’ in the Arctic and needs to start making policy, security, and economic investments in the Arctic or be left on the sidelines.”

China, with no territorial presence in the Arctic, obtained observer status to the Arctic Council in 2013, and has since included the Arctic into its “new Silk Road Strategy,”with increased diplomacy and investment in the region. China has also participated in various governance and rule-making processes for ship operation and fishing in the region outside the umbrella of the Arctic Council.  And while China’s launch of its first domestically built polar ice breaker — Snow Dragon 2 was delivered earlier last month — was framed as enabling “scientific research into polar ice coverage, environmental conditions and biological resources,” observers have pointed out that the icebreakers are also “useful in testing the feasibility of moving cargo across the Arctic,” as “China’s plans for a Polar Silk Road, as part of its ambitious multi-billion-dollar Belt and Road Initiative, include developing Arctic shipping routes.”

And then there’s Russia.  As David Carlin observes for Forbes, “[m]any nations have recognized the potential of the Arctic, but few have proceeded as boldly as Russia. The Russian economy derives nearly 20% of its GDP from activities in the Arctic. Russia has defended this investment by increasing its military commitments. Old Soviet Arctic bases are being upgraded and reequipped by Russian forces.” 

Against the backdrop of increasing tension between Russia and the West, and the United States and China, the Arctic’s strategic relevance is increasing, and Greenland — where vast veins of ores and minerals ranging from Rare Earths, Niobium, Tungsten and Antimony to Chromium, Platinum Group Metals, Graphite and Cobalt have been found (in other words, roughly one-quarter of the U.S. Critical Minerals List) — factors big into countries’ decisions to engage in the Arctic.  

The resource race in the Arctic is a manifestation of the tech war over who will dominate the 21st Century Technology Age.   Regardless of whether or not a Greenland deal is a realistic scenario, what is important here is that U.S. stakeholders are beginning to realize the need to assertively stake the United States’ claim in the Arctic and near-Arctic environs.  The other players — those with Arctic territory, and others, like China, with Arctic interests — have made it clear that they will not wait for us.

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