The Start of a Deal - Why Greenland is No Joke

The Start of a Deal – Why Greenland is No Joke

  1. President Trump’s suggestion of purchasing Greenland quickly became fertile ground for poking fun at the President and was added to a long list of short-sighted slights questioning his judgment. After all, why would anyone want to buy that frozen wasteland? Ask China.

A quick overview of Greenland:

Greenland is a large island, bigger in area than the state of Texas and home to a population of roughly 56,000 people. Most of the land mass is covered in ice with the exception of the coast. Their economy is largely based upon the fishing industry and tourism. The Kingdom of Denmark technically claims it as a part of their nation. However, in 1979 the Danish government allowed Greenland to become mostly autonomous and exist under self-governance for domestic matters, while the Danes retained rule over foreign affairs, defense and constitutional matters. Maintaining Greenland as part of the Kingdom costs Denmark between six and seven hundred million a year with little benefit yielded back. So why would Trump want it?

(Learn more about Greenland here.)

Strategic Benefit:

During World War II, the Kingdom of Denmark was occupied by German forces. The Danish Ambassador to the United States Henrik Kauffmann cut a deal with the United States in the name of his deposed King for the defense of the Danish settlements in Greenland. In the Summer of 1941 the War Department joined with the US Coast Guard to establish several radio and weather stations on Greenland. In 1943 the Army Air Forces set up two more stations one of which was Thule. At the time, with its isolated northern position, Thule was considered to be the least important of them all. When the war was over, the Danes sought to have the US relinquish control of all the bases to them, but the US began to see the value of a military presence in Greenland. In 1949 Denmark joined NATO and effectively ceded control of the base to the US. In 1951 the US reconstructed the base, completing it in 1953. Given its proximity to the USSR, it was deemed one of the US’ most strategically important military bases. Thule Air Base remains a very important asset and is under the control of the US Air Force today. The base has an installation of 21st Space Wing’s global censors that track air space and monitors potential missile launches for NORAD and Air Force Space Command. Its strategic placement affords the US a stronghold in the Arctic region and greatly contributes to the element of Air superiority that US forces enjoy.

Financial Benefit:

The virtually untouched lands beneath the ice sheet that encompasses most of Greenland might be a wealth of minerals and rare earth deposits. Limited mining expeditions thus far have revealed deposits of iron, lead, zinc, silver, cryolite, copper, diamonds and more importantly Uranium. Greenland does not have a large infrastructure. It lacks a system of roads and large airports. Most travel is done by snowmobiles, dog sleds, boat and small aircraft. Greenland would require substantial investment to develop the means to turn mineral rights profitable, but could yield tremendous benefits for the investor in the end. With the ice sheet receding in recent years, it is an opportune time to explore the country’s potential.

Geo Political Benefit:

President Trump is not the only one with his eye on the prize. China has come to the table with promises to build the necessary infrastructure Greenland both wants and needs. Greenland began construction of three major airports that would allow larger commercial flights access to the country and the Chinese are making a play for the contracts. Given China’s history in other lesser developed nations, we know they provide some valuable offerings on the front end but by the time is all said and done, the small country is usually finding its wealth drain out to Beijing. Greenlanders, however, are split on their position about Chinese investment. The Danes that live there are leery of letting China in the door while the native Inuits see it as a boon.

China is also seeking a foothold in the Arctic for trade purposes and opening its markets to more Northern regions of the world. It has acquired some nuclear powered ice breakers to cut through icy waters to deliver its wares and expand its global economic reach. China’s military aspirations are likely in play as well. There is little doubt China hopes to exceed the US in global power, both economically and militarily, and Greenland would offer them an opportunity to gain ground on both fronts. The President meanwhile recognizes the potential pitfalls a Chinese presence in Greenland would create for the US and thereby likely is seeking to beat them to the punch, especially with our military installations in the country.

It would seem that President Trump has the right idea in seeking to acquire Greenland, or maybe he was just letting China know that the US was still a player in the game. Either way it may just be the start of a deal by the man who knows a thing or two about “The Art of the Deal.”

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