The Personal Website of Mark W. Dawson

Is It Time to Purchase Greenland?

A tempest in a teapot was brewed when President Trump’s private comment on “should we purchase Greenland” was made public. The national pride of Denmark and Greenland was ruffled by this comment as should be expected. This is why this private comment should have remained private. However, the substance of this idea should be examined. First, however, a little background information on Greenland needs to be examined.

Greenland is a massive island, about 836,330 square miles, and autonomous Danish territory between the North Atlantic and Arctic oceans. Much of its land surface is covered in ice. Most of its small population, about 58,000 strong, lives along the ice-free, fjord-lined coast, particularly in the southwest. Its northerly position, largely above the Arctic Circle, results in natural phenomena such as summer’s midnight sun and winter’s Northern Lights.

The economy of Greenland can be characterized as small, mixed and vulnerable. Greenland's economy consists of a large public sector and foreign trade. This has resulted in an economy with periods of strong growth, considerable inflation, unemployment problems and extreme dependence on capital inflow from the Danish Government (about $700 million per year).

GDP per capita ($37,000) is close to the average for European economies, with a total GDP of about $1.8 billion. However, the economy is critically dependent upon substantial support from the Danish government, which supplies about half the revenues of the Self-rule Government, which in turn employs 10,307 Greenlanders out of 25,620 currently in employment. Unemployment nonetheless remains high, with the rest of the economy dependent upon the fishing industry, hunting and whaling, and some mining.

In 1979, Denmark granted home rule to Greenland, and in 2008, Greenlanders voted in favor of the Self-Government Act, which transferred more power from the Danish government to the local Greenlandic government.

• From the Wikipedia article “Economy of Greenland”

As always, when addressing this type of question, you need to balance the costs and benefits. The costs and benefits for all parties involved in a transaction. In this case, what are the costs and benefits to Denmark, Greenland, and the United States?

For Denmark, the benefits they would receive would be a purchase price and a relief from an annual expense. If the United States purchased Greenland for $10,000 per square mile, they would receive $8.3 billion for the purchase. If you amortize the Danish annual expense over ten years, they would save $7 billion. The combined total would be $15 billion. This $15 billion would be spent for the benefit of the Danish people over 10 years. In addition, if a territorial dispute by (potentially) hostile powers such as Russia and China occurred (both of which have shown great interest in the Arctic circle), or if someone attempted to restrict the free trade in the Arctic and the North Atlantic Ocean, the expense to the Danish people of defending their territory and the free passage of trade could be quite expensive. The other cost would be in their national pride. Given the benefit to the Danish people, I believe that the benefit far outweighs the cost.

For Greenland the benefit would be the opening of their interior to U.S. businesses to exploit the natural resources of Greenland, as well as the protection of the United States from territorial disputes by (potentially) hostile powers such as Russia and China occurred, or if someone attempted to restrict the free trade in the Arctic and the North Atlantic Ocean. This exploitation of Greenland’s’ natural resources would generate much tax and tariff revenue to support the people of Greenland. Indeed, there may be enough revenue, if the exploitation is profitable, to support every Greenland resident with a comfortable living outside of their own employment. They would also not be responsible for providing for their own security, as this would be the responsibility of the United States. The cost would be to their national pride but not to their Self-Government, as this could be retained as part of the purchase agreement. On balance, I believe that the purchase of Greenland by the United States would be very advantageous to the people of Greenland.

For the United States, there would be many benefits for the costs to obtain Greenland. Greenland is strategically important for the protection of the United States and to assure the right of free trade in the Arctic and the North Atlantic Oceans. With the United States assuring the territorial integrity of Greenland, and free passage of the Arctic and the North Atlantic Oceans, we can be assured that no (potentially) hostile powers, such as Russia and China, could interfere with this free passage or Greenland’s territory. If Greenland were to be purchased, we should negotiate with the Greenland government to assure self-rule for the people of Greenland. In addition, American business would be open for the exploitation of Greenland’s natural resources. And this exploitation would be done, in concert with Greenland’s local government, to assure that the rights of the Greenland peoples are protected, and both environmentally and business-friendly laws and regulations are enacted. It is also believed that Greenland has many rare earth minerals which are important to the United States as I have examined in my Article “Rare Earth Minerals”, which is very important to the United States.

Although the $8.3 billion to purchase Greenland may seem excessive, I believe that the benefit to the United States is greater than the cost. It is rare, in International Agreements, for all parties to the agreement to benefit as much as the purchase of Greenland would benefit all parties. I, therefore, believe that it is wise for all parties for the United States to purchase Greenland.