Denmark and Greenland reach agreement for Copenhagen to partly fund upgrades to three airports.

Greenland’s government has struck a deal with Denmark over funding for upgrades to three airports on the Arctic island, a project of strategic interest to a number of international players including China and the United States.

Danish Prime Minister Lars Lokke Rasmussen on Monday confirmed the agreement reached with Kim Kielsen, Greenland’s premier, during an impromptu visit to Nuuk, the capital of Greenland.

A self-governing Danish territory and the world’s largest island, Greenland has control over areas including mineral resources and social policy, while Denmark maintains responsibility for foreign policy and security.

“With the agreement, we promise to take advantage of the fact that the Commonwealth offers many opportunities,” Rasmussen said in a statement on Twitter.

The deal will see Denmark contribute to an estimated 3.6bn kroner ($559m) revamp of airports in Nuuk, Qaqortoq in the south, and Ilulissat, the island’s main tourism spot, aiming to help Greenland capitalise on Arctic tourism and cater for flights between Europe and North America.

It comes one day after Kielsen’s government lost its parliamentary majority following the pro-independence Partii Naleraq’s exit from the ruling four-party coalition over the prospect of Danish funding.

Copenhagen has argued that the airport project falls under its remit, but Partii Naleraq said mainland funding – which was backed by Kielsen’s Siumut party and the other two members of the coalition – amounted to interference in Greenlandic politics.

Vi skal sikre, at Grønland kan udvikle sig. Derfor er jeg glad for, at vi i dag har lavet en aftale om dansk engagement i Grønlands lufthavnsprojekt. Med aftalen løfter vi i flok og udnytter, at rigsfællesskabet rummer mange muligheder. #dkpol pic.twitter.com/C0TZdOgwFh — Lars Løkke Rasmussen (@larsloekke) September 10, 2018

Translation: We need to ensure that Greenland can develop, which is why I am pleased that we have made an agreement today on Danish involvement in Greenland’s airport project. With the agreement, we promise to take advantage of the fact that the Commonwealth offers many opportunities.

“We do not want to be part of that,” Partii Naleraq said in a letter quoted by local broadcaster KNR.

Its departure leaves the island’s ruling coalition, which was formed in May after elections the previous month, with only 12 out of 31 seats in parliament.

“It’s not a surprise that the coalition has just imploded,” said Mikaa Mered, a professor of Arctic and Antarctic geopolitics at the Paris-based Free Institute of International Relations Studies (ILERI).

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“[Being pro-independence] is the only common denominator of these four parties – they could not agree on anything else other than the independence question. It’s not a surprise,” he told Al Jazeera.

The opposition Demokraatit (The Democrats) party has opened the door for talks, which Kielsen has so far refused.

“I will talk to other parties about whether there is foundation for a new coalition,” he told KNR on Sunday, adding in comments to Sermitsiaq newspaper that he hoped to avoid calling a snap election.

‘Polar Silk Road’

The airport project has attracted interest from both the East and West.

Greenland, which houses a large US airbase, is strategically important for the US military and its ballistic missile early warning system.

“For the US and for NATO partners, keeping Greenlanders and the Greenland government – whether it’s independent or not – inside the transatlantic Alliance is absolutely critical,” said Mered.

“On the other hand you have countries like China who see that there is a huge opportunity here to gain some land or real estate in Greenland or to set up Greenland, when it becomes independent, as a kind of client state,” he told Al Jazeera.

In recent years, Beijing has shown increasing interest in the Arctic, announcing plans to build a “Polar Silk Road” of shipping lanes opened up by global warming, which would encourage enterprises to build infrastructure in the Arctic.

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Chinese funding for the airport project has been on the table since Kielsen visited Beijing in October 2017.

According to Greenland’s Kalaallit Airports, a state-owned company set up in 2016 to handle the airport upgrades, a Chinese construction company has appeared on a list of six firms that have shown interest in the project.

“Both the Danes and the Americans have long been trying to limit Chinese involvement in Greenland’s development, especially when it comes to projects that may have a national security impact, either for Greenland itself or for the US and NATO partners,” said Mered.

In May, US Defence Secretary James Mattis invited his Danish counterpart to Washington to discuss potential security risks around the “Chinese investment in Greenland issue”.

Economic independence

For its part, Greenland is keen to secure foreign investment in order to become independent from Denmark.

Following a referendum in 2009, the island has had the power to declare independence at any time, but it continues to face financial obstacles.

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“The Greenlandic economy is so small that Greenlanders are just not able to finance their independence,” said Mered.

Despite being almost a fifth of the size of the US geographically, Greenland is home to just over 56,000 people, according to the World Bank, and almost half of the island’s budget comes in the form of a block grant from Denmark.

“This grant is huge, it’s about $620m … so it’s going to be really hard for Greenlanders to become independent because, just in terms of state revenues, they need to find more than $600m a year to make their independence viable,” Mered said.

Additional reporting by Charlotte Mitchell: @charbrowmitch