The Arctic might be melting and scaring the rest of the world, but the Greenlanders aren’t too worried about it. They are fully aware of the fact that when ice disintegrates, so goes the Inuit hunting lifestyle. But that has since then been replaced with the dreams of potential economic windfall from oil.
The Greenlanders are so confident of what the “black gold” can do for them, they have negotiated independence from their colonial overlord – Denmark. It sounds great in theory, but in reality, a clear break from the mainland means a reduction in subsidy, amounting to $11,000 per person, or 60% of its annual budget. That will have to get made up, somehow.
So the island, made up of mainly hunters and fishermen, and with little industry to speak of other than bottled water and dwindling shrimp stocks, will have to muddle through the most accursed problem of them all: the resource curse.
[T’]here’s the fear that Greenland could become the Nigeria of the Arctic, another victim of the so-called resource curse, in which oil wealth triggers a downward spiral toward dysfunctional dictatorship.
Really? That’s all you can say about it?
The resource curse is one of those economic conundrums that almost every resource-rich country, even developed ones like Canada, falls victim to. Resource misallocation, misspending, corruption, undiversified economies, run on its currency and subsequent inflation, unstable growth, rising inequality, and eventually, just plain running out of the stuff!
So far, the only country that’s emerged triumphant from the mixed blessing of oil, is Norway.
And they were fortunate in part because “they are completely incapable of getting carried away by the oil dream.”
So the Greelanders have a lot to learn. That is, when they find the oil. And if they do, I can’t see how this can possibly end well.
Below, an excellent documentary if you haven’t seen it yet, the effect of climate change on Greenland soil.