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 map and 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.

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

For the United States, acquiring Greenland would bring many benefits relative to the costs. Greenland's strategic importance to the U.S. lies in its location, which is crucial for military defense and surveillance in the Arctic, especially as global powers like Russia and China increase their presence in the region, as the following map illustrates.

Furthermore, the island is abundant in natural resources, including rare earth elements that are essential for modern technology and defense systems, as I mentioned in my article “Rare Earth Minerals” which emphasizes their importance. It is also vital for the world in maintaining free trade rights in the surrounding maritime seas and ocean lanes near Greenland. Protecting Greenland's territorial integrity and ensuring free passage through these waters helps prevent hostile powers like Russia and China from interfering with these critical routes or Greenland’s territory.

For Denmark, the advantages would include a purchase price and relief from an annual expense. If the United States bought Greenland for $100,000 per square mile, they would pay $83 billion for the purchase. Amortizing Denmark's yearly expense on Greenland over ten years would save Denmark $7 billion, so the total benefit for the Danish people would be $90 billion, which could be used to benefit them. Additionally, if a territorial dispute with potentially hostile powers like Russia or China—both of which have shown great interest in the Arctic—arose, or if anyone tried to restrict free trade in the maritime waters, the cost to Denmark for defending its territory and maintaining free passage could be very high, which would be avoided if the United States owned Greenland. Another cost would be the impact on their national pride. Considering the benefits to the Danish people, I believe they far outweigh the costs.

For Greenlanders, the benefit would be the opening of their interior to U.S. businesses to develop and exploit the natural resources of Greenland. Additionally, American enterprises could work in partnership with local authorities to responsibly develop Greenland’s resources while safeguarding the rights of Greenlandic peoples. This resource exploitation could generate significant tax and tariff revenue to support the people of Greenland. If profitable, there might be enough revenue to provide every Greenland resident with a comfortable living outside their own employment. They would also not need to provide for their own security, as that responsibility would fall to the United States. The cost would be to their national pride, but not to their Self-Government, which could be maintained as part of the purchase agreement. Overall, I believe that the purchase of Greenland by the United States would be very beneficial for the people of Greenland.

Although the $83 billion price tag to purchase Greenland may seem high, I believe the advantage for the United States outweighs the cost. It's rare in international agreements for all parties involved to benefit as much as they would from the purchase of Greenland. Therefore, I think it is wise for all parties that the United States proceed with buying Greenland.