Sailing full steam into treacherous waters

In Greenland, the world's largest island, is facing a period of unprecedented change. One matter of great local concern is the softening permafrost on which the country is built.

Another is the rapidly melting ice cap, and the increasingly torrential streams and rivers that carry the meltwaters off the sea.

"Climate change is hitting us really hard", says Aleqa Hammond, the nation's first female prime minister. "The ice underneath us is melting, the majority of the population where I come from is reliant on ice."

A cautious respect for the environment is deeply engrained in the Greenlandic character - reflecting the harsh realities of life for a tiny population of just 56,000 people living on the world's largest island, most of it covered by ice. And that certainly goes for Hammond.

"We are the last frontier of a nature that you don't see anywhere else in the world. And we have the obligation to protect that ... Protecting the Greenlandic environment has always been a top priority for our government and measures must be taken to ensure this."

A friendly environment for business

I met her at the Economist Events' Arctic Summit in London this month - attended by Government officials, investors and academics who had gathered to discuss the balance between conservation and economic development in the Arctic.

And it was who opened the event with a keynote speech in which she declared Greenland "open for business" - welcoming investment in oil, mining, hydropower and other energy projects.

"I want Greenland to have a self-sustaining economy based on our own resources with a greater degree of integration into the world economy", she said.

The pro-business mood music reflects Greenland's increasing independence from Denmark (which Greenland is part of) and the need for it to generate its own revenues and jobs, rather than rely on subsidies from afar.

The nation voted for greater sovereignty in 2008 - supported by 75% of voters - and since 2010 has had control over its own mineral resources. Last year, in a 15-14 vote, the Government abolished a zero-tolerance policy towards the mining of uranium and other radioactive minerals.

Green light to mining of rare earth minerals

The vote means that Greenland can now exploit its valuable rare earth ores, the source of metals that are vital to high-tech industries from wind turbines, to computer screens and disk drives. That's because the rare earths also contain a significant proportion of uranium ores.

But how would this mining - which would surely include uranium among its products - fit in with Hammond's environmental concerns, in what may be one of the world's most pristine envonments?

"We are not doing this because we want to be a uranium mining country, but we want people to have the freedom to choose for themselves", she insists - though she does admit that uranium could occur as a by-product.

"I don't mind setting the highest standards required for protection of the environment for mining in the world", she adds. "Maybe Greenland can set new global standards. Because we live in a country that is very dear to us. If it wasn't for the environment and what the environment gives us, we would never have survived."

First mining project to bring 3,000 Chinese workers

But is she is danger of taking Greenland out of its depth? London Mining, a British mineral company, got the go-ahead last year for a £1.5bn iron ore mine in SW Greenland.

This huge project will rely on immigrant labour. London Mining plans to import more than 3,000 Chinese construction workers, working for Chinese contractors, to build a port and pipeline to serve the mine. It says that's to cut the costs for the project, which is not yet fully financed.

Maybe that's not so surprising. Greenland is the world's least densely populated country, with just 56,000 inhabitants and a workforce of just under 27,000 people. And not many of them are trained within the mining industry.

But with foreign companies bringing their own labour force to do the jobs, you have to wonder - how much will these mining projects really benefit Greenlanders in the end?

We will set the terms!

"We will be doing mining to create jobs for Greenlanders as we need to fight unemployment and to do that we need the economy to take off", says Hammond. And she confidently insists: "If they are to come here, we set the terms."

"However, we are only 56,000 people. And because we're so few, and our mining potentials are so large, we can't avoid labour coming from outside."

Another concern is foreign workers getting paid at Chinese rates. Hammond says that will not be the case: "My government is not in doubt: they will get the same wages as our own people, and nothing less.

"I am not for social dumping, I am for social responsibility, I want to protect the labour. I am looking to ensure that Greenland is a country where you are being treated well."

Our people will be protected

The new minerals law and the Large Scale Project Act will protect the rights of the Greenlandic labour force, says Hammond. Mining companies must employ 100% local labour - unless they can prove that this is not possible.

Foreign workers will also be required to pay income tax in Greenland, and not the country they come from.

It's clear she does not intend to compromise with the still-to-be-formed mining sector. But how will she fare when it comes to tough negotiations with companies with economies many times bigger than her entire country?

Simple realpolitik suggests that faced with losing investment to another country less squeamish about labour rights, wage rates, environmental protection and taxes, compromises will have to be made.

Exploratory oil drilling under way

Mining is only one of the ways businesses are planning to exploit the non-living resources of the Arctic. Licences for exploratory drilling for oil and gas in the waters off Greenland have been issued to BP, Shell, Statoil and others for a while now.

If oil is found, extraction is still 10-20 years away. But these projects have sparked concerns about damage to the Arctic environment in terms of oil spills, pollution and emissions from the heavy fuel oil used by vessels in the Arctic waters.

Another concern is how the race for Arctic oil will contribute to further global warming. And for a country which is made up almost entirely by an icecap up to 3 km thick and contains 10% of the world's fresh water, the fact that the ice is melting rapidly is of the utmost concern.

But Hammond dismisses any suggestions of that sort: "I think Greenland is already showing best practice to the rest of the world in this respect. Talking about it is not good enough. We are doing it.

"We are energy efficient and use hydropower ... We are also doing more in the future to increase the level of self-sufficient energy. We are currently investing in renewables, which is very important to us."

Traditional 'Inuit lifestyle' under threat

Contrary to uninhabited Antarctica - but where conservation and preservation of the environment is of great concern - it's important to remember that there are 4 million people living in the Arctic and their voices need to be heard - among them the indigenous Inuit peoples.

Hammond says she is confident the Greenlanders can handle the ongoing transition from the old 'Inuit lifestyle' to a modern society, or from the old to the new world, as she calls it.

"I think the Greenlanders are really strong. I consider myself a very strong individual because I grew up in an area where I had a unique view that cannot be found anywhere else. People pay thousands of pounds to see it, and I grew up with it right in front of my eyes.

"I grew up being able to go out in a boat, or going hunting with my family, all those things. It is a reminder that my people, the Greenlanders, the Inuit, can maintain life in the Arctic, whereas other cultures die out. That's only because we are adaptive to the very harsh conditions that our environment gives us."

But she alludes to the complex balances that must be struck: "We can't live only off our living resources and at the same time we need to be careful with our fishing stock and stock of other animals we hunt, so that we don't play hazards with them just for the sake of our economy, because the economy is based on only fishing and hunting."

The times they are a-changing

Already in Hammond's lifetime the country has changed radically. Now 47, she grew up in a small settlement without running water or central heating, which is how most people lived at that time. Today 48,000 Greenlanders live in towns and about a quarter of the population live in the capital, Nuuk.

When talking about her childhood, the tone changes and her voice softens. Although a modern, widely travelled and multilingual woman today, (she speaks 5 languages) she remembers well what it was like to grow up in a very different Greenland.

"I come from a small place. My father was a hunter. We lived in a very traditional way. He fell through the ice when I was seven years old. Making a living in a place like that was very hard for my mother and many other families.

"If your only option is subsistence fishing and hunting, paying for electricity and clothes for the children and ensuring a good worthy life for your family is very hard. I think many would chose something different if they had an option."

An option to choose between the old or new world

Hammond admits that the country and its people face many threats - but those threats do not appear to worry her in the slightest. Instead, she spoke with confidence about her nation's journey - first to build a booming economy, and ultimately to full-blown sovereignty.

"I'd like to see the economy of Greenland grow so that people can keep the right to live where they live and also we as a country can afford to have people living in as many places as there are now without having to tell people they have to move.

"This is a right that the people should have. They have lived there for thousands of years and they are not going to be removed because of national economy, instead the national economy should be so strong so that it can protect the right for people to stay where they live now."

What is causing the 'social pollution'?

How have the Greenlanders reacted to the developments so far? The nation has long been afflicted by alcoholism, unemployment and very high suicide rates - collectively referred to as 'social pollution' - and these issues have touched Hammond's own life.

"I have lost very dear friends. Children I grew up with have committed suicide. It's not just one, it's several. I have seen at close hand how for the last 32 years more than 3,000 people have committed suicide. It's like a whole village is gone.

"Never must this be forgotten, that Greenlanders, moving from one stage of cultural history towards a new one, modernisation, colonisation, civilization and globalisation. Never forget each life that's given up, because they didn't feel they fit in."

To create a Greenland where life is easier and people are happier, self-governance is a must, she says, and self-sufficiency will strengthen the individual and has an important psychological effect. "We have seen what can happen if people don't feel they are part of decisions regarding their lives."

From Danish subsidies to a self-sustaining economy

For a country which until now has been reliant more or less solely on hunting, fishing and generous Danish subsidies, cutting the umbilical cord is a very serious move - and one that threatens to expose the population to some very icy winds of change.

Clearly it's vital to develop an economy that can survive, and thrive, without external support. And in the circumstances few governments would ignore the mineral wealth that's sitting there for the taking. Hence the aggressive policies for mining and wider economic development.

And Hammond's optimism and confidence, nay certainty that she and her government are embarked on the right track are infectious. I definitely want to believe that she is right and that everything will work out for the best.

But I must admit to doubts - doubts that only grew in the days after our meeting. The world is a big bad place, and Greenland is, well, very 'green' - in the old sense of young and inexperienced. And its population is minute.

Denmark, with its 5 million people, is already a small country. And Greenland has only a whisker over 1% of that population. And it is planning to expose itself to powerful, ruthless forces that even large, wealthy countries struggle - and mostly fail - to control.

It's all an enormous gample

Ultimately Hammond and her Forward Party are taking an enormous gamble. Economic growth, mining jobs and growing independence will raise the wealth and well being of the people, she believes, while preserving the environment and Greenland's ancient Inuit tradations. 

Vast multinational corporations can be controlled. Pollution will not occur. The social impacts of large scale immigration will all be positive. A shining future beckons. 

But even as I write this, the credibility of her bright, positive vision begins to wither - could it all just be a grand delusion?

More realistically the 'social pollution' will actually increase as a growing economy creates wider economic disparities between haves and have-nots, along with deep social tensions.

Immigrant labour serving the burgeoning mining and other industries could rise so high to meet corporate demands, as to leave native Greenlanders a disempowered minority in their own land.

Huge corporations may seduce and corrupt Greenland's entire political class, only to devour its mineral assets while spiriting all the profits away - leaving behind nothing but a devastated, toxic landscape. 

Just think of US, Canada, Australia, UK, PNG ...

Our experience of red in tooth and claw capitalism in other countries tells us that this latter dystopian vision is, sadly, by far the most likely to come about. Hammond is surely sincere in her aspirations - but also innocent, even naive.

The image in my mind is one of the doughty ship that is Greenland sailing blithely into icy, uncharted reefs. The lights are on, the band is playing, and the music is cheerful. But the journey will surely end in cold, salty tears.

Sophie Morlin-Yron is a freelance journalist based in London. For more of her work, see her website sophiemyron.wordpress.com. Twitter @sophiemyron.