2 PERSPECTIVES ON BUSINESS AND ECONOMICS | VOL 41 | 2023 voted to leave the EU. In 1985, Greenland established its flag. Greenland was given more autonomy through the Self-Government Act Referendum, which established Kalaallisut as the official language (Lambert, 2022). Even though Greenland has experienced advances in its home rule, Denmark retains exclusive sovereign control over foreign policy, defense policy, and security policy (Ministry of Foreign Affairs, n.d.). The lack of authority in these areas contributes to most Greenlanders favoring independence. To date, no decision has been reached about when or how sovereignty should be obtained, mainly because Greenland receives a grant of 3.9Bkr ($614M) annually (International Trade Administration, 2022), a large sum to overcome before Greenlandic politicians can move toward independence, as it is commonly accepted that economic and political independence must go hand-in-hand (Grydehøj, 2020). Today, Greenland’s most important financial sector is fishing, which cannot sustain as many jobs as in the past due to climate change and sustainability concerns. Consequently, the government of Greenland is trying to augment the economy in other sectors, such as the island’s mineral resources and tourism. Since 2000, foreign overnight visitors have increased by 50%, and visiting cruise line passengers have grown by 150%. The government hopes to attract foreign investments to these sectors to boost GDP (Ministry of Foreign Affairs, n.d.). Similarly, mineral resources found in northern Greenlandic mines, such as lead and zinc, have the potential for use in green technologies (Frederiksen, 2019). The history of Denmark in Greenland has been long and complex; however, maintaining the relationship will prove vital as Denmark attempts to leverage Greenland in the race for the Arctic. The race for the Arctic and its strategic relevance The race for the Arctic is a phrase coined in the late 2000s to describe the geopolitical strife caused by untapped resources, climate change, unsettled borders, and power interests in the Arctic regions of the world (International Trade Administration, 2022). There has been peaceful development in the Arctic thus far, yet numerous factors point toward a quiet militarization of the Arctic. One of the most prominent contributing factors to this is the Arctic paradox, which states that the more rapidly humans burn fossil fuels, the sooner the population will have access to new oil, gas, and mineral resources, a result of global warming accelerating the melting of Arctic ice, which would open new oil and gas reserves (Hilde, 2013). In the Arctic, the search for these resources has already begun. The US estimates that the Arctic contains up to 25% of the world’s undiscovered oil and gas. This projection is backed by Russia, which has announced $41B worth of tax incentives for oil field development over 30 years and approved a $300B government incentive program for Arctic infrastructure (Rumer et al., 2021). As the ice melts, the Arctic map will be redrawn. New transport routes are opening, and the potential for ownership of new energy resources in the Arctic poses national security issues. For example, the northwest passage in Canada has yet to be navigable year-round. However, with climate change, the season in which the route can be used for shipping is expanding and is expected to be navigable throughout the summer in upcoming decades. These new routes have cut shipping distance by 40% in some cases, as calculated in Russia’s Northern Sea by the shipping company Mærsk, which could lower fuel costs and benefit the environment (Frederiksen, 2019). This expansion has caused debate within Canada regarding the government’s ability to maintain surveillance in the Arctic and ensure that only authorized vessels cross the passage (Hilde, 2013). Other ways in which the Arctic Sea ice melting can increase business in the region are through fiber cables, data centers, fishing, and extraction of raw materials. Fiber cable installation across the Arctic Ocean has already been agreed on by the Finnish company Cinia and the Russian company MegaFon. Installing data centers can create new jobs in the Arctic and help data storage become more sustainable. In terms of the fishing industry, as the ice melts, more territories will open. At present, unregulated fishing has been prevented in the Arctic, but the potential remains. Finally, once ice thaws, previously inaccessible land and sea will be available to mine valuable minerals (Frederiksen, 2019). The benefits of an open Arctic are promising, although the potential for tension exists. For example, the Kingdom of Denmark has already experienced security issues in the Arctic, namely an altercation with Canada over claims to Hans Island, located in the Nares Strait between Canada and Greenland. This issue has since been resolved, but the conflict was rampant in the late 2000s, with both nations planting flags on the island and defending their claims with warships. Canada and Denmark claimed that “timesaving sea lanes in the Arctic could transform the shipping industry the way the Suez Canal did in the 19th century” (Palosaari, 2012). National security flareups are especially concerning because the Arctic Council—one of the largest cooperating bodies
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