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Global warming is changing environmental conditions in the Arctic and opening new opportunities for resource extraction. Greenland, long thought to have excellent potential for iron ore, copper, zinc, lead, gold, rubies, rare earth elements and oil, has looked to strengthen its economy through the development of these resources. For many in Greenland, including the current government, resource extraction is seen as a necessary step toward the ultimate goal of independence from Denmark.

On September 24, the Energy Security Initiative (ESI) and the John L. Thornton China Center at Brookings hosted Premier Aleqa Hammond of Greenland for an Alan and Jane Batkin International Leaders Forum address on the future of natural resource extraction in Greenland. Following her address, a panel discussion highlighted the findings of a new Brookings report, “The Greenland Gold Rush: Promise and Pitfalls of Greenland’s Energy and Mineral Resources.” Report co-author Kevin Foley, a doctoral candidate at Cornell University, was joined on the panel by ESI Director Charles Ebinger and University of Copenhagen Professor Minik Rosing, who served as a discussant. The panel was moderated by Jonathan Pollack, a senior fellow with the China Center and Center for East Asia Policy Studies at Brookings.

This event was part of the Alan and Jane Batkin International Leaders Forum Series, a new event series hosted by Foreign Policy at Brookings which brings global political, diplomatic and thought leaders to Washington, D.C. for major policy addresses.

 Join the conversation on Twitter using #Greenland

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• Natural Resource Development in Greenland: An Alan and Jane Batkin International Leaders Forum with Greenland's Premier Aleqa Hammond

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In September 2014, we released a study on mineral and energy resources in Greenland and were honored to have Aleqa Hammond, then the Premier of Greenland, with us at Brookings for the launch event. Since gaining political autonomy from the Kingdom of Denmark in 2009, successive governments in Greenland have been aggressively promoting the development of a mining industry as a solution to its deep and worsening economic woes. Our study concluded that Greenland was likely to develop large-scale mining and energy projects eventually, but that the pace of development would be much slower than the government of Greenland anticipated due to steep declines in iron ore prices and unrealistic expectations of demand for rare earth elements.

A lot has changed since then, but our original conclusions still hold. While there has been progress on smaller mines such as the Aappaluttoq ruby and sapphire project in southwest Greenland, it appears increasingly unlikely that any of the large-scale mining and energy projects that Greenland has been counting on will get off the ground in the near term. Global events beyond Greenland’s control have conspired in recent months to reduce the incentives for investment in mining and offshore oil and gas projects.

Political Crisis in Nuuk, But Siumut Remains in Control

Following her trip to Washington, Premier Hammond became embroiled in a political scandal concerning the misuse of public funds. She resigned from office and an election was called. Hammond’s incumbent Siumut party, now under the leadership of former Environment Minister Kim Kielsen, held on to power against its main rival by a tiny margin of 326 votes.

All major political parties in Greenland support the development of a mining industry, but the two main parties are divided on the issue of uranium mining, with the opposition Inuit Ataqatigiit (IA) party opposed on environmental grounds. However, following the election Siumut successfully negotiated a coalition government, bringing together rival parties (the Democrat party and Atassut) that support uranium mining.

Ebola Outbreak Leads London Mining to Bankruptcy

Global events continued to conspire against Greenland’s efforts to develop a mining industry. Just before the November elections London Mining, the British company developing the Isua iron ore mine, went bankrupt and was placed into receivership after incurring heavy losses at its Sierra Leone mine due to the Ebola crisis.

As we noted in our report, London Mining’s project in Greenland sought to attract investments, labor and engineering support from Chinese partners, but the company was not successful in its efforts to secure that support given the high costs of the project (estimated at about $2 billion) and the unique engineering challenges associated with the project. Nevertheless, the company’s plan to bring nearly two thousand foreign workers to Greenland along with the government of Greenland’s efforts to pass legislation that would exempt workers on large projects from Greenland’s minimum labor standards sparked an enormous controversy in Denmark over the scope of Greenland’s autonomy. It also led some commentators in Denmark and elsewhere to suggest that this investment was part of a larger strategic plan by Beijing to establish a foothold in the Arctic region. We concluded in our study that there was no evidence of any such geopolitical connection and emphasized that, contrary to many reports, there was in fact no Chinese investment in Greenland.

Last week, London Mining’s Greenland operations were purchased by a Chinese investment and trading group based in Hong Kong. Like London Mining, the project’s new owners are unlikely to develop the Isua project unless they can locate a major Chinese mining company willing to provide capital, labor and engineering. This would seem unlikely in the near term given the precipitous drop in iron ore prices since 2012 and increased production by the international mining majors.

The buyer, General Nice, is a privately held trading and investment conglomerate with subsidiaries in mainland China, Hong Kong, India, Singapore and South Africa. The company’s corporate background is unclear. It was founded in 1992, but a quick search reveals no information about the group’s activities prior to 2006, when General Nice acquired Singapore-listed Abterra. This listed subsidiary has reportedly come under scrutiny in Singapore for its lack of transparency concerning unusual investments in coal mines in Shanxi province. General Nice has made a handful of financial investments in overseas mines, all in partnership with major mining companies from mainland China. The company does not appear to have experience operating iron mines.

China Cancels Its Rare Earth Production Quotas

China’s decision last week to drop export quotas on rare earth elements is another bad sign for Greenland’s plans to develop mining projects. Investment in rare earth projects outside of China has largely been driven by expectations of limited supply from China, where production capacity has been restricted by quotas on both production and export. The removal of the export quotas may reduce interest in international rare earth projects, including the two projects in Greenland.

Security concerns expressed in Denmark over the mining of uranium and rare earth have not yet been resolved. A working group established in early 2014 between Greenland and the Danish government to resolve these issues was scheduled to conclude in late 2014, but these talks have been interrupted by the change in government. While the new coalition supports uranium mining, these issues will have to be worked out before mining can move forward. This is particularly important for the development of the Kvanefjeld rare earth project, which contains significant levels of uranium, but may also be a factor for the Kringlerne rare earth project—which does not contain uranium – as Denmark has reserved the right to reject proposed rare earth projects on security grounds regardless of uranium content.

In addition, several rare earth element projects outside China (but not in Greenland) have in fact moved ahead, further reducing the urgency to develop a project in Greenland.

Falling Oil Prices

Oil extraction was always at best a long-term prospect for Greenland due to harsh conditions, limited infrastructure and the wide availability of cheaper alternative supplies. As oil prices started falling in June 2014 and global demand growth slowed, arguably the need for exploration in high-cost areas like Greenland further diminished. Thus, in September we concluded that under the most optimistic scenario it would take at least ten years before commercial oil production would take place in Greenland. Oil prices have continued to fall, and if prices remain low the timeline for exploration in Greenland is likely to be further extended.

Dim Economic Prospects

None of this is good news for Greenland, which has hoped to meet anticipated budget shortfalls with revenue from new mines. This week the new government publicly acknowledged the difficulty in securing major investments in the near term and will place more emphasis on developing infrastructure to support the tourism industry, which now appears to be Greenland’s best hope for economic development. One such project is a proposed new airport serving the tourist hub Illulissat. Any such measures will be important as the government faces a growing gap between expenses and the annual block grant from Denmark, which is likely to increase further as the population ages.

      

       

Editor’s note: In this post, the third in a series drawing from Fergus Hanson's new book, "Internet Wars: The Struggle for Power in the 21st Century," Hanson analyzes the growing trend of online petitioning influencing policymaking, but argues the caveat that the nature of online campaigning is not always conducive to good policy.

Last federal election, the Obama campaign spent nearly $1 billion to get 66 million voters out to support the president’s victory.

So as the 2016 election approaches, large lists of politically-minded individuals have special value. And it just so happens in the last five years some very large lists have emerged.

These lists are controlled by online citizen-aggregation sites. The largest, Change.org, now reports more than 100 million users, but others are also huge: Avaaz reports 42 million and Care2 32 million.

So far, the operators of these sites have not directed their members in the same way as some of their overseas counterparts.

Two of the largest U.S. organizations—Change and Care2—are for-profit B-corporations and sell access to their membership, often for a hefty fee. They rely almost exclusively on petitions. This is probably driven by commercial motivations to grow membership with a view to selling access to it. But petitions are limited in their ability to effect change, especially as politicians become desensitized to them.

In other parts of the world, the model has evolved to become much more overtly political. A good example is one of the first movers in the space, GetUp!, an Australian-based group. It uses crowd sourcing to fund its secretariat, raising over $5.7 million from tens of thousands of micro donations averaging $11.50 each. It uses these funds to run successful high court challenges and other publicity (and pressure) generating stunts. It stations members at polling booths during elections and uses its members’ shareholder rights to hijack corporate meetings.

This trend is one of the radical new ways the Internet has allowed the masses to aggregate their voice in order to exert influence on decision makers. Suddenly, people are able to do this on a regular basis, outside formal structures like trade unions and political parties.

It also provides great influence to the individuals leading the campaigning sites. They can exercise this by shaping which campaigns have most prominence on a site and allocating in-house resources to help the campaigns they like with editing of material, generating media, and behind the scenes lobbying.

There is a now a long list of examples where these organizations have exerted significant influence on corporations and politicians, but in many ways they are still undergoing significant evolution.

The shift to a broader repertoire than simple petitions and more hands-on political engagement seems likely.

There is also a potential evolution underway in their politics. Most campaigning sites are openly progressive in orientation, but this is changing. In late 2012, Change.org controversially shifted its policy to allow advertising from non-progressively aligned groups. Conservative groups have also started to mobilize online, a prominent example being the Heritage Foundation in the United States, which now has a significant online presence.

Whatever their political leanings, the policy reality of this new force is messy.

The nature of online campaigning is not always conducive to good policy because the groups lack institutional policymaking expertise and often launch campaigns off the backs of crises, allowing little time to think through consequences.

Ironically, these people-power sites also face a question of legitimacy. Three hundred very vocal people with a clever campaign can sometimes drive change that the majority wouldn’t necessarily support. The nature of the Internet can also occasionally make it hard to distinguish between the views of local nationals and foreign citizens voicing their concerns from abroad. Finally, there is the question of the legitimacy of the heads of these organizations who can be unelected business people with out-sized influence.

This is not the only way the Internet is empowering citizens and disrupting global power dynamics. Internet Wars looks at three messy, but intriguing ways citizen power is reshaping the world.

Read the first part in the series, “Big issues facing the Internet: Economic espionage,” and the second, "Waging (cyber)war in peacetime."

       

In Pennsylvania, the next major presidential primary state, concerns about the economy loom large as global competition, economic restructuring, and an aging workforce threaten the state’s ability to prosper. Thanks to these assets, the six metro areas generate 80 percent of the state’s economic output even though they house 68 percent of its population. A true economic agenda for the state must speak to the core assets of Pennsylvania’s economy and where these assets are located: the state’s many small and large metropolitan areas. In short, this brief finds that:

• To help Pennsylvania prosper, federal leaders must leverage four key assets that matter today—innovation, human capital, infrastructure, and quality places. These assets help increase the productivity of firms and workers, boost the incomes of families and workers, and can help the state and nation grow in more fiscally and environmentally responsible ways.
• These four assets are highly concentrated in the state’s economic engines, its metropolitan areas. There are 16 metro areas in the Commonwealth, ranging from Philadelphia, the most populous, to Williamsport, the smallest. The top six metropolitan areas alone generate the bulk of the state’s innovation (80 percent of all patenting), contain the majority of the state’s educated workforce (77 percent of all adults with a bachelors degree), and serve as the state’s transport hubs.
• Despite these assets, Pennsylvania’s metro areas have yet to achieve their full economic potential. For instance, Philadelphia and Pittsburgh enjoy strengths in innovation, but they both struggle to convert their research investments into commercial products and real jobs. The Scranton metro area is emerging as a satellite of the New York City region, but it’s hampered by the absence of frequent and reliable transportation connections and inadequate broadband coverage.
• Federal leaders must advance an economic agenda that empowers states and metro areas to leverage their assets and help the nation prosper. To that end, they should establish a single federal entity that works with industry, states, and metro areas to ensure that innovation results in jobs and helps businesses small and large modernize. The federal government should strengthen access and success through the entire education pipeline. They should overhaul and create a 21st century transportation system. And they should use housing policy to support quality, mixed-income communities rather than perpetuating distressed neighborhoods with few school and job options.

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In a series of pieces during the past two weeks (see here, here, and here), I've laid out the evidence for two propositions: The president's economic record will be at the heart of the 2012 election, and he cannot win without focusing on the heartland — the swing states stretching from Pennsylvania to Iowa.

The case for the first proposition goes as follows:

To an extent that we haven't seen since 1992 (and maybe not even then), the 2012 election will focus on a single issue: economic growth and job creation.

For that reason above all, President Obama will be waging an uphill battle for reelection, because the American people are giving his management of the economy very low grades. (Recent CBS/NYT surveys have placed approval of his performance on the economy and job creation at below 40 percent.)

While for understandable reasons the president's campaign team wants to turn the election into a choice between two futures, the odds of success for that strategy seem low. Most political scientists who have studied the question conclude that when there's an incumbent in the race, the principal issue is that candidate's job performance. (That's why Reagan's "Are you better off..." was such a killer question against Carter in 1980.)

President Obama, therefore, has no choice but to address the economic question head-on, which will require him to offer a much more persuasive defense of his record than he has up to now.

The case for my second proposition — the Heartland Strategy — is this:

The president's team hopes to recreate the "new majority" strategy that expanded the playing field and led to victories in states such as Virginia, North Carolina, Colorado, and Nevada in 2008 and perhaps Arizona and Georgia as well in 2012. This does not seem realistic, however: while the president's support among African Americans remains strong, it has dropped sharply among Hispanics disappointed by what they see as his failure to push for comprehensive immigration reform and his administration's aggressive deportation strategy. And every survey and focus group points to diminished enthusiasm among the young adults whose relentless networking on Obama's behalf contributed significantly to his historic victory.

To make matters worse, the president's numbers in Florida are dismal, he trails likely Republican nominee Mitt Romney by 10 points in New Hampshire, and he has no chance of repeating his 2008 miracle victory in Indiana.

These facts underscore the crucial importance of the heartland states — especially Ohio and Pennsylvania. As a matter of history and simple arithmetic, is very unlikely that President Obama can be reelected without carrying them both.

Although Pennsylvania is usually 3 to 4 points more Democratic than Ohio, the evidence suggests that Obama is surprisingly weak there and needs to do some real work to shore up his standing in a state that Democrats often regard as being in the bag.

As for Ohio, the last Democrat to take the White house without winning that state was John Kennedy, who did it with electoral votes from Texas and other southern states that Obama will not receive. (The last Republican to win the presidency without Ohio? There hasn't been one since the founding of the party in the 1850s.)

Ohio is pivotal, election after election, because it is a demographic and political microcosm of the country. If a presidential candidate can win a majority there, he or she can almost certainly do so in the nation as well. And that's why both parties should pay close attention to the results of last week's election, in which the Ohio electorate overwhelmingly rejected both Gov. Kasich's assault on public sector unions and the individual mandate at the heart of President Obama's health reform law.

If these two core propositions are correct — if the 2012 election will be about Obama's economic stewardship and will be won or lost in the heartland — then the key question is this: How can the president defend his economic record in a region much of which has not enjoyed robust growth for quite some time?

Let's look at some basics:

It's hard to imagine Obama losing Illinois or winning Indiana in 2012. That leaves six key heartland states. Note what they have in common: despite widely varying rates of unemployment, none of them has experienced a rapid decline in that rate over the past year. Because there's no sense of dynamism in the region, hope and confidence in the future are at a low ebb. That's the reality the president must speak to, there and elsewhere.

How can Obama recast the economic discussion? Here's my best shot:

First, he must acknowledge Americans' sense of being stuck and then explain why recovery from this downturn has been so painfully slow — in particular, the impact of the financial collapse and our excessive debt burden, private as well as public.

Second, he must display some humility and acknowledge that he didn't get everything right. It was a mistake not to underscore the difficulty of our circumstances right from the start. It was a mistake to predict that unemployment would peak at 8 percent if his stimulus bill were enacted. While it was necessary to save the big financial institutions from a total meltdown, it was a mistake to ask so little from them institutions in return. And it was a mistake to act so timidly in the face of a housing and mortgage crisis that has cost the middle class many trillions of dollars in lost wealth.

Third, he should emphasize what most Americans believe: without the steps his administration took at the depth of the crisis, there might well have been a second Great Depression. Sure, "It could have been much worse" isn't much of a bumper sticker, but it's a place to start, and it has the merit of being true.

Fourth, what he has done so far has not only halted the decline but has yielded more than twenty consecutive months of growth in private sector jobs — progress that would be more noticeable if states and localities hadn't been shedding so many employees in response to the squeeze on their budgets.

Fifth, while most Americans didn't like it when his administration intervened to save GM and Chrysler, it was the right thing to do, not only for auto workers, but for much of the heartland's economy as well. Allowing these two firms to dissolve would have broken the back of regions already struggling with double-digit unemployment. Leadership means doing what's necessary and right, even when it's unpopular.

Sixth, we now have the opportunity to build on the foundation laid during this painful period in our history. Obama can emphasize steps such as: a bold new response to housing foreclosures and underwater mortgages; an infrastructure bank that mobilizes both domestic and foreign capital to put Americans back to work on projects that will strengthen our economy; and a tougher stance vis-à-vis Chinese policies that have taken their toll on American workers and firms. And yes, we need to come together around fundamental spending and tax reform that can stabilize our fiscal future without further undermining the hard-pressed middle class.

That's the guts of the affirmative case Obama can make. (No doubt he believes he's already doing it, but he hasn't been frank, comprehensive, and persistent enough to break through.) And if he does make it relentlessly until next Labor Day, he can then pivot and ask, What's the alternative? What is my opponent offering? If you think that an agenda of deregulation for big polluters, more tax breaks for the wealthy, and a laissez-faire policy that allows the housing sector to "hit bottom" is the way to jump start job creation, the by all means vote for him. If you don't, you have a chance to continue moving down a path that can move us from the shadows of stagnation to the sunlight of opportunity and to build a new economy in which all Americans — not just a favored few — enjoy the fruits of growth.

       

       

      

       

Recent developments in the U.S. economy present opportunities and challenges for how to effectively promote widely shared economic prosperity in a changing labor market. The proliferation of nontraditional and contingent employment relationships, fostered in part by new technology platforms, creates new opportunities, but also new regulatory, legal, and public policy challenges. Consumers and workers alike now use online technology and apps to contract for specific, on-demand services such as cleaning, handiwork, shopping, cooking, driving, and landscaping. These developments constitute what has been referred to as the “online gig” or “on-demand” economy, where work is taking place in a series of one-off gigs, rather than in an ongoing relationship with a single employer. The emergence of the online gig economy has increased policy interest in the issue of contingent work arrangements, which broadly include independent contractors as well as part-time, temporary, seasonal, or subcontracted workers.

In some respects, these on-demand gigs benefit both workers and the economy, and help to support job growth and household incomes in the post–Great Recession labor market recovery. Such gigs often feature flexible hours, low or no training costs, and generally few barriers to worker entry. These features have enabled gig-economy workers, including those with other jobs, to generate new income or to supplement their primary incomes during difficult times in a strained job market. Moreover, customers purchasing such on-demand services have benefited from the convenience and availability of services as well as the low cost at which they are often offered.

However, other aspects of the gig economy have raised some concerns. First, these jobs generally confer few employer-provided benefits and workplace protections. This stands in contrast to traditional employer–employee relationships that often come with manifold assurances and protections, such as overtime compensation, minimum wage protections, health insurance, disability insurance, unemployment insurance, maternity and paternity leave, employer-sponsored retirement plans, workers’ compensation for injuries, paid sick leave, and the ability to engage in collective action. Second, technological developments occurring in the workplace have come to blur the legal definitions of the terms “employee” and “employer” in ways that were unimaginable when employment regulations like the Wagner Act of 1935 and the Fair Labor Standards Act of 1938 were written. The evolution of the work relationship over time has led to important regulatory gaps. Some observers perceive that the online gig economy is leading to a rise in the share of work arrangements that are precarious, as compared to traditional employer–employee arrangements, and that the enhanced flexibility of the marketplace has come at a cost of economic security for many workers. In fact, systematic and timely data on contingent work arrangements are hard to come by so economists are still trying to figure out how common and widespread they are and what their impact on workers’ economic security might be. The absence of systematic data makes it all the more difficult to analyze the costs and benefits of contingent work arrangements for workers and businesses, and thus inform the appropriate policy and regulatory response. While the online gig economy is bringing this challenge to the fore, the broader issues surrounding classification and protection of contingent workers are not new or isolated. Importantly, the use of subcontracted and temporary workers, and workers with irregular or on-call shifts, also may require new regulatory frameworks.

In this framing paper, The Hamilton Project describes the broader economic context of contingent employer–employee relationships and where the emerging on-demand gig economy fits in this context. It also highlights the regulatory and measurement gaps that need to be resolved.

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