Greenland’s future must be decided by its people

AS GREENLAND heads to the polls on Mar 11, Mute B Egede, the prime minister since 2021, and his Inuit Ataqatigiit party favour independence from Denmark. But rising local support for that goal is tempered by concerns about living standards. Greenland receives an annual fiscal transfer from Denmark of about US$623 million (roughly US$11,000 per person, given an estimated population of 56,000). Together with other government services provided by Denmark, the total level of support is likely closer to US$1 billion per year.

US President Donald Trump says he wants to “buy” Greenland, but another recent poll indicates that 85 per cent of Greenlanders reject that option. As a former president of the Inuit Circumpolar Council recently put it, “The way that indigenous peoples are often treated in America, where their languages and cultures have been marginalised, is hardly a good sales pitch for the idea of Greenland as part of the United States.”

Trump has expressed an interest in acquiring Greenland since 2019, and he recently refused to rule out a coup de main to seize the island. While it is increasingly hard to predict what the US will do, local leaders must ensure that Greenland maintains inclusive institutions guaranteeing full economic and political rights for all inhabitants, without which there can be no shared prosperity. Mineral rights are collectively owned, and if revenue from this sector rises, Greenlanders will surely want to share fully in the benefits. Other important decisions, including environmental policies, also currently rest appropriately in local hands.

How, then, should Greenland’s next government play its cards?

It should start by looking at the big picture. The US sounds like 1897 again. Imperial expansion – into Panama, Greenland, Canada and Gaza – apparently inspires Trump and influential parts of the tech sector. A madcap version of what 150 years ago Americans called “manifest destiny” is ascendant, backed by the most powerful military the world has ever known. In this view, America will be made great again by expanding the territory under direct US control and slapping stiff tariffs on everyone else. Autarky – closed borders, minds and markets – will supposedly keep the Chinese threat at bay.

Some advocates of American control over Greenland argue that US national security depends on it. But the US already has a base on Greenland, reportedly with several hundred personnel. The Greenland authorities have indicated that further bases would be welcome on reasonable terms. There was a flirtation with China during the 2010s, including some proposed infrastructure investments, but this was rebuffed with American encouragement and Danish financial support.

The sea between the United Kingdom, Iceland and Greenland does have strategic value. But that is why the US has submarines, an important air base in Iceland and other military assets in the region. Moreover, all of Scandinavia is now firmly in Nato and on high alert with regard to Russian maritime activities. The retreat of northern ice sheets creates an emergent sea route for Russian oil to flow to China, but US control of Greenland is irrelevant to whether that trade acquires strategic value. To choke off Russian oil revenues, policymakers should focus on sanctions and other restrictions targeting tanker traffic.

Limited rare-earth minerals

Greenland has valuable rare-earth minerals, including yttrium, scandium, neodymium and dysprosium. But while it would be unwise to let China further strengthen its hold on these global markets, controlling Greenland is not the answer. Greenland only has about 1 per cent of the world’s rare earths, and local leaders do not oppose responsible mining that respects local conditions, especially many communities’ dependence on fishing. Moreover, according to a global analysis by Massachusetts Institute of Technology’s (MIT) Priority Technologies Group, which I co-chair, there are many other ways that the US can (and should) secure access to the broader category of critical minerals needed across the tech sector, including by greatly increasing investment in recycling electronics of all kinds.

Greenland is not for sale, but whoever leads after Mar 11 will presumably be in a strong position to bargain for more fiscal resources from Denmark, including to settle claims arising from past mistreatment of Greenlandic people, particularly the abuse of generations of Inuit children. Looking beyond dependence on Denmark, a sound and environmentally sensible long-term development strategy might focus on attracting European and American investors in the tourism sector.

With regard to the US, the best approach is to be consistently friendly and willing to cooperate on security issues (including with a potential Compact of Free Association), while resisting all attempts to extract resources, such as uranium, on unfavourable financial and environmental terms. Local leadership should also make it clear that if Greenland is taken by force, only full statehood, with one US representative and two US senators, would be acceptable.

The authorities should also engage with Congress about how Greenlanders would likely vote if they suddenly became US citizens. They currently enjoy free healthcare and education at all levels. The island’s leaders should insist on this continuing if the Americans arrive, and they should emphasise the costs of running an economy with many dispersed fishing villages, no connecting roads and only limited weather windows to maintain infrastructure.

There is a proposal floating around the tech sector to offer everyone in Greenland US$100,000 to join the US. That sounds simple, but can Trump really persuade Congress to spend US$5.6 billion when Greenland is already so cooperative?

And if the White House offers a deal that looks good, in terms of ongoing fiscal transfers, everyone in Greenland should ask themselves this: Can America be trusted? How long would it be until Elon Musk (or someone else) cuts off the money in the dead of night, without congressional approval and not subject to judicial review?

Whatever the outcome, Greenlanders will decide their own future. After all, it’s 1897 only in Trump’s imagination.

The writer, a 2024 Nobel laureate in economics and a former chief economist at the International Monetary Fund, is a professor at the MIT Sloan School of Management and the co-author (with Daron Acemoglu) of Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity (PublicAffairs, 2023)