Svalbard: The Dubai of the Arctic

Svalbard, One might not have heard about it. It is the Northernmost human settlement on earth and it is administered by Norway since 1920. So why are we talking about Svalbard today? It’s because of its peculiar political arrangement and the region it belongs to.

In 1920, After WW1 a “Treaty of Svalbard” was signed among 45 nations. The treaty gave Norway the power to administer it but each of the 45 nations has a claim to its resources and can exploit it without any intervention by Norway and none of the 45 nations can have a Military presence in the Island. Nobody really cared about Svalbard back then, but the Arctic is changing, it’s ice is melting at an alarming rate and this indicates that a new sea route is opening. And the country which can claim most of the Arctic will get most of the revenue from this future shipping route and Svalbard is in a very strategic position to be the Next Dubai of the world. It’s already a tax haven with a very low corporate tax rate of 16% p.a. which is even lower than Singapore. Svalbard and it’s nearby regions alone contain 13% of the world's unexplored oil reserves and 30% of unexplored Natural gas reserves.


Four nations currently are fighting for control over the Arctic: Russia, Norway, Denmark and Canada and to understand the conflict one needs to understand what is a Continental shelf: “the area of seabed around a large land mass where the sea is relatively shallow compared with the open ocean. The continental shelf is geologically part of the continental crust.” In simple words it is actually the land connected to the nation's coast and if one proves it then they can lay claim to huge areas of ocean. Till now only claims of Norway are accepted by UN. So Russia is also trying to claim most of the Arctic by putting an Application with the “UN commission on the limits of Continental shelf” that its continental shafts stretches till the North Pole. Russian submarines even dared to put the national flag in the seabed of North Pole. That is why Russia does coal mining (loss making) in Barentsburg in Svalbard so that when the table is set for the nations to grab the International territory of Arctic, Russia gets most of it. The situation is now so messed up that waters claimed by Canada, Denmark and Russia overlap each other.


After the fall of USSR, there is a certain craving within the Russians to gain its superpower status and flex its muscle and with Arctic Ocean opening up, the Russian Navy has rolled up its sleeves. It has already put 60 navy vessels in Russian sovereign waters. NATO nations control the Atlantic and Pacific, China has South China sea(another region full of resources) to show its might, India has Indian Ocean in its backyard but even with the World's third largest Navy, Russia has only few parts of Pacific and Black sea because most of the Arctic Ocean was frozen. This is also one of reasons why Russian Navy has so many submarines because they can travel below the ice but ships can’t navigate in ice but the ice is gone and Russia is no mood to let Arctic go. In the Russian town Barentsburg in Svalbard, Russians have turned to tourism to repopulate the town. The town even has a Russian consulate and the whole town is being renovated for tourists and museums are displaying paintings Russian explorers in the areas, all these to create a cultural connection of Arctic and Russian identity.



Russia is trying to exert that Arctic associates with Russia, this is called Soft Power. Soft power is when a nation puts claim to a land by cultural relating to it and Russia is somewhere winning in this scenario. But don’t feel that Russia isn’t using its Hard power, 50 airstrips will be ready for operation in Arctic by 2020 and 45,000 troops with 112 aircrafts are already stationed in the region. Russia under Putin, is desperate to reclaim its old glory and Russia showed it to the world by annexing Crimea. Russia also understands that if any other European Nation lays its hands on Arctic gas then Europe’s dependency on Russian gas will reduce leading to harder sanctions against Russia for its actions. The thing is Germany and Italy and other EU nations are very much dependant on Russian gas and it was one of the reasons why EU couldn’t take a strong stance against Russia after annexation of Crimea and



Russia wants it to continue. Svalbard is an island of laid back people who just do their job and have beer in evening bars but that is about to change, the thing is which way will it go? An armed conflict is unlikely because Norway, Denmark and Canada are not that big military powers and the game will be one sided but diplomatic crisis is so much probable, let’s see what future holds for Svalbard!!

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