Arctic economies are heavily reliant on the natural resource extraction sector, yet they are tasked with promoting sustainable development. This presents a conundrum: how to develop in such a way that is good for the environment when there is little investment in sectors other than natural resource extraction? The Arctic Council needs to approve subsidy measures for investment in digital infrastructure based on development rates in the Arctic. This will ameliorate the problem of lump-sum, one-time investments by governments. By allowing more development opportunities between governments, NGOs, and businesses, these subsidies partially remove the burden of government funding (unless they are the ones investing) and provides a continuous source of investment for Arctic communities. As more governments adopt this policy, it will allow them to engage in critical global discourse on digital issues related to privacy, construction and development, as well as policy. A brief case study of the Government of Nunavut is presented below, with an eye on adoption by other governments.
Indigenous Peoples of the Arctic face the problem of devising ways to promote sustainable development in a region heavily dependent on natural resource extraction. Mining, quarrying, and oil and gas extraction dominate sources of GDP, although construction and public administration contribute modest to hefty fractions depending on the region (Arteau, 2017). This leads to several issues. First and foremost, Arctic economies follow the markets heavily, and if the resource sectors slow down so do many Northern economies. A narrow economic base leads to intensified boom-and-bust cycles (Heininen and Southcott, 2010). As a result, the average unemployment rate is near 10% in Canada’s Northwest Territories (Northern Economic Index, 2016), for example.
In a report released in 2018, the Qikiqtani Inuit Association stated four pillars of future economic development and investment in the Arctic. These were government policy, financial resources, infrastructure, and a skilled workforce. In the same breath, the Arctic Council’s Sustainable Development Working Group mentions “pursuing opportunities to protect and enhance the environment and the economies, …” (SDWG, 2015) of the Arctic. However, in practice, much more emphasis is put onto environmental issues, and economic development falls to the wayside. These values stated by the Inuit echo major concerns held by communities across the Arctic.
One way that this could be alleviated is through more investment in digital infrastructure. While investment in broadband expansion is being undertaken by many companies and government agencies, (Nuvitik Communications, the agency of Innovation, Science, and Economic Development (ISED) through its Connect to Innovate Initiative (CTI), Greenland Connect, the Quintillion Project, the Svalbard Undersea Cable System, TERRA, R.O.T.A.C.S., etc), additional funding is needed. If we look at Canada as an example, “…over 99 percent of Canadian households currently have access to broadband with speeds of at least 1.5 Mbit/s. However, only 27 percent of households in the rural Nunavut region have access to broadband.“ (Arctic Economic Council, 2016). And as Soukup (2006) notes, “While dial-up access has been available in Nunavut for several years, it has been a slow and unstable means of connecting to the Internet, with connection speeds usually in the 14.4 kbps range…”. So there is currently little internet coverage, and where there is coverage the speed is incredibly slow. This is unacceptable.
This paper proposes that a small percentage of all development and business done in the Arctic by Member States and Observers of the Arctic Council, as well as that done by non-Indigenous businesses and organizations, goes to an Arctic Development Fund. These monies will be managed by the individual Indigenous bodies, the SDWG, or the Peoples Secretariat, where one main component is focused primarily on improving digital infrastructure. We set the value of the subsidy to be 0.5%, precisely because it is less than 1%.
Again, we can look to the Inuit of Canada as an example. Nunavut GDP from mining, quarrying, and oil and gas extraction was $391.3 million in 2017 (Nunavut Bureau of Statistics, 2018). This number is high given the data from 2011-2017. So if we average the GDP for this 6 year interval we arrive at a value of ~$315 million. Given that, a 0.5% subsidy would be around $1,575,000 per year. While this may seem low, this is only one of many industries, so the idea is that the subsidy would cover all non-Indigenous industry investment and business revenue, thus being less prone to boom-and-bust cycles. It also supplements the one-time, fixed investments that usually come in larger installments. The Qikiqtani Inuit Association, in their 2018 report “A New Approach to Economic Development in Nunavut”, state the problem of lump-sum investments like this:
“When economic infrastructure investments occur, they are generally the result of a singular federal initiative with one-time or limited funding opportunities….While it is true that federal programs….can be used for economic infrastructure funding, due to a history of under-funding basic infrastructure in Nunavut, this type of fund is often used to supplement the shortfall. Thus, the intended purpose of that opportunity for economic infrastructure has not yet been realized.”
This “connectivity subsidy” can be seen as an extension of the share of government subsidies that the Inuit receive from all natural resource extraction on “Crown lands” through the Nunavut Land Claims Agreement (NLCA). While the Inuit extinguished most of the mineral rights on Nunavut land, down to a few percent (Nunavut Tunngavik Inc., 2004), we simply use this case study as an example. The Inuit of Nunavut are an outlier in terms of Indigenous self-governing bodies. While this specific example would be a sticking point because of the NLCA, it is easy to extrapolate to see how this policy would benefit people across the Arctic. But where would this money go? For the sake of completing our case study, the funds could be given directly to the Government of Nunavut, dispersed to the Department of Economic Development and Transportation, The Nunavut Anti-Poverty Secretariat, or any number of education and job training programs.
The Inuit have formalized their knowledge and value system in Inuit Qaujimajatuqangit (IQ). If this policy were adopted by the Inuit of Nunavut, it would align with the following of their principles (Qikiqtani Inuit Association, 2018):
- Pijitsirniq(serving and providing for family or community, or both);
- Pijariuqsarniq(development of skills through practice, effort and action);
- Ikajuqtigiinniq(working together for a common cause);
- Qanuqtuurniq(being innovative and resourceful);
- Avatittinnik Kamatsiarniq(respect and care for the land, animals and the environment).
These are shared by Indigenous Peoples across the Arctic, and the author mentions them to show that environmental knowledge is only one facet of Indigenous Knowledge. However, simply because this policy aligns with certain values does not mean that any proposal can waive the right of Indigenous Peoples to direct consultation and collaboration as stakeholders. One of the hopes in passing a resolution through the Arctic Council is that this step will not be ignored.
Barriers to Implementation
While this policy would benefit all parties involved in the long run, there are several short-term barriers to implementation. First and foremost is the cost of investment. There are many options for improving digital infrastructure, but the fastest, most efficient option is fiber optic cables (Arctic Economic Council, 2016). They are expensive, but the end result would be an integrated Arctic with reliable connectivity. Next, I foresee issues with Indigenous governments and bodies. Their land and livelihood are at stake, and any project plan would need their direct consultation and collaboration at every step of the way. A plan might not pass if it raises environmental concerns. Additionally, I find it hard to believe that all Member States would approve this measure through the Arctic Council. If it did, there would still be logistic and privacy concerns that take years to iron out. In this regard, time is also a barrier to implementation. Lastly, the Arctic is sparsely populated and prone to inclement weather. The costs of any digital infrastructure project would need to take into account any additional hurdles like building in permafrost, short construction season, poor roadway framework, etc.
Expanded broadband availability holds more than economic opportunities for Arctic communities. According to the Arctic Council’s Task Force on Telecommunications Infrastructure in the Arctic (TFTIA), expanded broadband infrastructure would impact language and culture preservation, educational opportunities, and provide pathways to healthcare through telemedicine. While the author has recommended a policy centered around economic development and diversification through improving digital infrastructure, other beneficial aspects should be noted. Economic and social issues that face the Arctic are often one and the same, so a project that benefits one will benefit the other.
Additionally, it should be emphasized that improving digital infrastructure is a recommendation. A 2009 World Bank study found that for every 10% increase in market broadband diffusion, a developing country’s economy could be expected to see a 1.38% increase in per capita GDP (Minges, 2016). Thus, this source of funding could generate unforeseen sources of revenue and independence for Indigenous Peoples. However, Arctic communities should be able to decide how to use money for infrastructure as they see fit, or expand broadband to fit their specific economic and cultural needs.
In summary, a connectivity subsidy would solve several problems. It would diversify the economy, and make Indigenous Peoples less reliant on the natural resource extraction sector. It would create sustainable jobs, although additional training would be needed to make sure that Indigenous Peoples could fill the positions. It would improve connectivity in the Arctic which would set the groundwork for further infrastructure and economic development. Additionally, broadband access sets the stage for advancing international relations through cooperation and continued discourse on matters like human rights, the environment, and privacy.
Arctic Council Task Force on Telecommunications Infrastructure in the Arctic (TFTIA). “Telecommunications infrastructure in the Arctic: a circumpolar assessment”. Arctic Council, 2017, pp 90.
Arteau, Jean-François. “Business in the Arctic: Where to Begin?” Arctic and International Relations Series, 5, 2017, pp. 16-21.
Canadian Northern Economic Development Agency, Government of Canada. “Northern Economic Index”. Cannor.gc.ca, 21 Nov 2016, https://www.cannor.gc.ca/eng/1387900596709/1387900617810.
Government of Nunavut. “Incorporating Inuit Societal Values”. Government of Nunavut, 2013, pp 63.
Heininen, Lassi, and Chris Southcott. Globalization and the Circumpolar North. University of Alaska Press Fairbanks, 2010
Minges, Michael. “Exploring the Relationship Between Broadband and Economic Growth”. Background Paper for the World Development Report 2016: Digital Dividends, 2016, pp. 21.
Nunavut Bureau of Statistics. “Nunavut Real Gorss Domestic Product by Industry, 2011 to 2017”. Statistics Canada, System of National Accounts. 02 May 2018, http://www.stats.gov.nu.ca/en/Economic%20GDP.aspx.
Nunavut Tunngavik Incorporated. A Plain Language Guide to the Nunavut Land Claims Agreement. Earthlore Communications, 2004.
Qikiqtani Inuit Association. “A New Approach to Economic Development in Nunavut”. Feb 2018, pp. 1-26.
Soukup, Katarina. “Report: Travelling Through Layers: Inuit Artists Appropriate New Technologies” Canadian Journal of Communications, 31, 2006, pp. 239-246.
Sustainable Development Working Group, Arctic Council. “SDWG Mandate”. Sdwg.org, 2015, https://www.sdwg.org/about-us/mandate-and-work-plan/. Accessed 10 Mar. 2019.
Telecommunications Infrastructure Working Group. “Arctic Broadband: Recommendations for an Interconnected Arctic”. Artic Economic Council, 2016, pp 23.