WEBVTT - Arctic Economic Council's Frederiksen Talks Greenland's Business

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<v Speaker 1>Bloomberg Audio Studios, podcasts, radio news.

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<v Speaker 2>The US officials are rushing to come up with options

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<v Speaker 2>for business deals and other ways to step up links

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<v Speaker 2>to Greenland after President Trump's renewed demand to take over

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<v Speaker 2>the island. The Foreign ministers of Denmark and Greenland are

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<v Speaker 2>due to meet with US Section of State Marco Rubio

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<v Speaker 2>in Washington next week, joining US now as madss fist Friedrichson,

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<v Speaker 2>who is executive director for the Arctic Economic Council. Mad's

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<v Speaker 2>good to have you on the program today. Thank you

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<v Speaker 2>for your time, because we'd like to understand what the

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<v Speaker 2>view of business is in Greenland about the Trump administration's

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<v Speaker 2>determination that it wants Greenland to be part of the US.

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<v Speaker 1>Yeah, nice to be here on call. It's very uncertain

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<v Speaker 1>times and all you can say that, and this doesn't

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<v Speaker 1>only go for for Greenland, but across the Arctic region.

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<v Speaker 1>There's a lot of uncertainty at them, and uncertainty that's

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<v Speaker 1>poison for any companies. I just spoke with a group

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<v Speaker 1>of companies in Greenland the other day and they said

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<v Speaker 1>that everything is put on hold at the moment. They're

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<v Speaker 1>not making any decisions until there's small clarification about their future.

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<v Speaker 3>What is the I suppose, how does that affect things

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<v Speaker 3>like investment, business planning, How do the day to day

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<v Speaker 3>operations of these companies I suppose move forward when there's

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<v Speaker 3>such geopolitical uncertainty.

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<v Speaker 1>That's a good question, and I think it's important to

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<v Speaker 1>remember that, you know, Greenland is still home to fifty

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<v Speaker 1>six thousand people that wakes up every day and go

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<v Speaker 1>to work, so yes, they will continue life. Similar to

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<v Speaker 1>the COVID pandemic being a major disruptor for companies, they

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<v Speaker 1>were still operating and they will still operate. There are still,

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<v Speaker 1>you know, uncertainties around for example, law scale investments. There's

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<v Speaker 1>certain uncertainties around you know where, also defense investments for example.

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<v Speaker 1>So right now it's just very dificult to plan ahead.

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<v Speaker 1>The day to day operations is still the same. You know,

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<v Speaker 1>ninety seven percent of Greenland's export is from fisheries. Those

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<v Speaker 1>fishing vessels are still out there fishing. What is interesting though,

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<v Speaker 1>is the US market is not a particularly big market.

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<v Speaker 1>It's actually a very very tiny market for the Greenlandic economy. Europe, China,

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<v Speaker 1>even Canada is much bigger than the US. So some people,

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<v Speaker 1>not all, but some people do see it as an

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<v Speaker 1>opportunity though, to expand into new markets in the US.

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<v Speaker 2>That's interesting given the kind of comments not ruling out

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<v Speaker 2>the use of military force. Also, we've had further comments

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<v Speaker 2>about the idea of Greenland being bought by the US

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<v Speaker 2>or quote, some sort of financial arrangement, as the US

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<v Speaker 2>Republican House Speaker Mike Johnson suggested only yesterday. Do you

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<v Speaker 2>get any sense that Greenlandic businesses might accept some kind

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<v Speaker 2>of financial arrangement with the US.

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<v Speaker 1>I don't think so. I mean they, as the Greenlanders

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<v Speaker 1>have been saying since twenty nineteen when we heard about

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<v Speaker 1>this the first time, the Queen and the government and

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<v Speaker 1>businesses said, you know, Greenland is not for sale, but

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<v Speaker 1>it's open for business. There is a strong sense, and

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<v Speaker 1>this is all the statements built from the private sector

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<v Speaker 1>and from the public sector, that Greenland belongs to its people.

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<v Speaker 1>So this idea about a large real estate deal, as

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<v Speaker 1>the President Trump called it in twenty nineteen, that's not

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<v Speaker 1>of any interest to the businesses. They want to decide

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<v Speaker 1>the future themselves. And that's also what Denmark has stated

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<v Speaker 1>again and again on what Greenland has stated again and again.

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<v Speaker 3>There have been reports of an influenced campaign by the

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<v Speaker 3>US in Greenland. Do you hear about that from the

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<v Speaker 3>businesses that you work with or is there a sense

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<v Speaker 3>that those efforts are continuing.

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<v Speaker 1>Very It's a good question, and it goes back to

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<v Speaker 1>let me just zoom out briefly for the broad Arctic.

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<v Speaker 1>There are HYPERD threats across the Arctic. You know, there's

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<v Speaker 1>talks about Chinese, Russia and etc. Other outside nations influencing

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<v Speaker 1>and wanting to get into the Arctic. The benefit of

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<v Speaker 1>the Arctic is that we are quite small communities across

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<v Speaker 1>the whole region. There are four million people living there,

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<v Speaker 1>ten percent of its indigenous, which means it's very easy

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<v Speaker 1>to see if suddenly someone from outside is trying to

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<v Speaker 1>influence someone. We have seen, however, we have seen some

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<v Speaker 1>attempts on digital manipulation or online manipulation of people. We

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<v Speaker 1>saw some AI videos being spread a few years ago.

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<v Speaker 1>We have seen some strains posts. We saw there was

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<v Speaker 1>a fake document being shared that was supposed to look

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<v Speaker 1>like it came from the Greenlandic government. It was completely

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<v Speaker 1>made up. So we have seen some attempts, but we

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<v Speaker 1>don't know what countries are behind it.

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<v Speaker 2>Interesting, what is your view then, of what you want

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<v Speaker 2>to see next and what businesses want to see next.

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<v Speaker 2>There is this foreign minister's meeting that's happening next week

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<v Speaker 2>that surely must be quite important. How do you think

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<v Speaker 2>that the Danish government and indeed the EU, what should

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<v Speaker 2>they be doing next?

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<v Speaker 1>So first, I mean, yeah, we have to turn off

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<v Speaker 1>this fire that is on at the moment, and we

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<v Speaker 1>also need to remain calm and not to panic. And

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<v Speaker 1>I think this is quite important right now that we

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<v Speaker 1>still engage in the dialogue and we continue to look

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<v Speaker 1>further ahead. We have over the past years already seen

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<v Speaker 1>massive investments coming from is particularly Denmark has invested massively

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<v Speaker 1>in for example, subse fiber optic cables, deep sea ports,

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<v Speaker 1>expansion of ports, et cetera, expansion of one ways. So

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<v Speaker 1>in the past few years, Denmark has invested massively in Greenland.

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<v Speaker 1>We are also seeing growing interest from the European Union

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<v Speaker 1>and I think this will continue. The European Union will

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<v Speaker 1>update their Arctic policy in the coming months, and I'm

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<v Speaker 1>sure security will play a role there. And also this

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<v Speaker 1>whole idea about do use, and I think also we

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<v Speaker 1>will at least the companies are asking for this. Okay,

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<v Speaker 1>if you are investing more in defense, let's try to

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<v Speaker 1>make sure it also benefit the communities there. So whatever

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<v Speaker 1>we do in the Arctic, it has to have at

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<v Speaker 1>least the dual use, quite often also a triple use.

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<v Speaker 1>The Greenlandic economy is still massively challenged. There's fifty six

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<v Speaker 1>thousand people. They expect to be forty six thousand people

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<v Speaker 1>by twenty to fifty Gdpeak growth is rather low, and

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<v Speaker 1>there is some structural challenges around the skilled workforce. So

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<v Speaker 1>Greenland has a lot of challenges when it comes to

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<v Speaker 1>be an attractive investment environment, not only because of US interest.

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<v Speaker 1>So we have to deal with that long term.

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<v Speaker 2>Our last thought, if you would, what I hear and

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<v Speaker 2>read about Greenland is that there has been an attempt

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<v Speaker 2>to be open with the US in terms of trying

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<v Speaker 2>to get business deals. Why do you think there hasn't

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<v Speaker 2>been more interest and more advancement, Let's say in my

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<v Speaker 2>in other resources, we will know that Greenland is rich

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<v Speaker 2>in mining resources, but actually getting them out of the ground,

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<v Speaker 2>there's not that much going on to do that. With

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<v Speaker 2>that openness, what do you think has been the hindrance

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<v Speaker 2>so far to doing more business between the US and Greenland?

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<v Speaker 1>And that's exactly what the companies are asking themselves as well.

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<v Speaker 1>So there's currently one active mind one open mining Greenland.

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<v Speaker 1>There are more than around fifty one hundred minds that

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<v Speaker 1>could open if they just get an investor. We have

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<v Speaker 1>seen some mining activity from the US in the south

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<v Speaker 1>of Greenland the past year, but that's also the first

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<v Speaker 1>time that's been so much activity. I think a lot

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<v Speaker 1>of it comes down that this is a political wish.

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<v Speaker 1>I don't believe that the business society of community in

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<v Speaker 1>the US has this interesting Greenland. This is from the

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<v Speaker 1>top of the political level. And that also reflected that

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<v Speaker 1>it is very hard to tell companies where to go

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<v Speaker 1>and invest if there is not a good investment case. Generally,

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<v Speaker 1>Greenland is challenged by lack of infrastructure, small populations, so

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<v Speaker 1>economy of scale is a challenge, but it does have

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<v Speaker 1>opportunities within for example tourism, and we have seen a

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<v Speaker 1>few US investors, for example, investing in hotels in Greenland,

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<v Speaker 1>but it is at a very very small level. But

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<v Speaker 1>this is not only about the US not investing too

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<v Speaker 1>much in Greenland. This is international companies and investors around

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<v Speaker 1>the world. A lot of people are talking about Greenland

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<v Speaker 1>not too many people are investing in Greenland, and this

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<v Speaker 1>is not helping what is happening at the moment.