Greenland: Yes We Can

Greenland has overwhelming voted for more autonomy from Denmark in yesterday’s referendum.

Over 75% of Greenlanders backed the plan.
Just over 23% said no.
The turnout was around 72%.

I reckon that’s an impressive turnout given the dark Arctic winter days. Those in the north of the country must be coping with little or no daylight at this time.

Its a clear sign that the island is heading towards independence.

As I said in yesterday’s blog, the First Minister Hans Enoksen has a timescale of independence in 12 years time.

Others prefer a shorter timescale.

The former foreign minister Aleqa Hammond sees independence in 8 years.

And the head of the Greenland union SIK, Jess Berthelsen, sees it happen in 4 years.

The defeated unionists like the Democrats leader Jens Frederiksen and rebel Siumut politican Finn Lynge are now left arguing over the timescale and the feasibilty of independence.

Lynge in particular thinks that with only 57 000 people, Greenland cannot be independent. He said it was ‘impossible for an island with 50,000 to 60,000 inhabitants to become an independent state.’

‘There are simply too few of us to provide the personnel necessary to develop a viable state’.

The ex-First Minister Lars-Emil Johansen rejects that criticism. Echoing the slogan of Barack Obama he simply says ‘Yes We Can’.

Greenland is rich in oil, gas, gold, diamond and other minerals.

Scottish companies like Cairn Energy are keen to develop the Greenland oil and gas potential. It is now the largest oil company investing in Greenland with a total of 8 licences around the island. Greenland’s oil company Nunaoil has a 8% stake in those licenses.

Its part of the Greenland Government’s plan to diversify its economy which is currently largely based on the fishing industry.

And speed the path to independence.

The world’s current smallest states by population:

1 Vatican City 920
2 Tuvalu 11,640
3 Nauru 13,050
4 Palau 20,300
5 San Marino 28,880
6 Monaco 32,410
7 Liechtenstein 33,720
8 Saint Kitts & Nevis 38,960
9 Marshall Islands 59,070

Currently the population of Greenland would put it at no. 9 in the world.

Eyes north to Greenland

Today is the day of Greenland’s referendum on wresting more powers from Denmark, in a move that is seen as a precursor to full independence for the Arctic island.

A yes vote would see key economic powers move from Copenhagen to the Greenland Parliament and decrease Greenland’s dependence on the annual block grant of 472 million euros it receives from Denmark.

Greenland would also take control of its oil resources and mineral wealth, although the current referendum deal leaves the possibility of a Danish share when annual oil revenue exceeds $12.6 million. Estimates say north east Greenland might have around 30 billion barrels of oil and gas. Climate change is making access to those resources much easier and cheaper. One report quotes a Greenlander looking forward to having a wine industry in the near future!

Greenlandic would be recognised as the country’s official language. It is spoken by the vast majority (around 50 000) of the population.

There are only around 57 000 people in Greenland. Around 39 000 are eligible to vote in the referendum.

A ‘yes vote’ is widely expected. It is said that about three quarters of the voters are already decided on voting for more autonomy.

The expected change in autonomy will then be implemented on the 21st June 2009; the day instigated a few years after devolution in 1983 as the National Day of the country. It also voted that same year to leave the EU in a referendum, having previously joined as part of Denmark.

The First Minister of Greenland, Hans Enoksen, supports the ‘Yes vote’.

He expects that with more fiscal autonomy the demand for full independence will increase.

“Agreeing on self-rule is the only road forward,” he said, pointing out that “the Greenlandic people have wished for many years to be more independent.”

He set out his timetable for full independence:

“Greenland will be independent in 12 years … for my 65th birthday.”

Other politicans share this broad timescale. Lars Emil Johansen, one of two Greenlandic members of the Danish parliament, says he dreams the day will come by 2021, in time for the 300th anniversary of Denmark’s colonisation of Greenland.

“Of course we can be the masters of our own destiny and fly on our own wings”

His advisor Hans Jakob Helms agrees:

“Home rule was a compromise,” Helms said. “It’s a simple fact that home rule has reached its limit and there’s a need for more room for self-government.”

Around 300 years of a political union? The parallels with Scotland and the rest of the UK are striking. And similarly to the planned 2010 referendum in Scotland, the Greenland referendum is also non-binding. However the Danish Government will respect the wishes of the Greenlanders.

And like Scotland, Greenland has its own Unionist doubters of independence.

The Greenland Democratic Party are against further devolution – they are campaigning for a ‘No vote’ – and against full independence:

Palle Christiansen, the political spokesperson of the Democrats, who are part of Greenland’s opposition, warned against hurrying the process, noting that ‘self-rule brings with it more than just oil revenues.’

Christiansen cited the administration of judicial affairs as just one area which would incur major costs on the Greenlandic government.

And a minority of members of the Siumut Party have openly dismissed talk of independence, much to their party’s disgust:

“Greenland will never be an independent state,” Finn Lynge recently stated, much to the dismay of his Siumut party, which is part of the government coalition and strongly in favour of a “yes” vote in the referendum.

Its not great times for the government coalition. It may be falling apart under scrutiny from the Greenland Audit Commission, which might result in the referendum result becoming a springboard for a subsequent snap General Election in the country.

“There are only between 50,000 and 60,000 of us living here in geographically and climatically extreme conditions. With such a tiny population it is impossible to provide the human contributions needed to turn Greenland into a modern and independent state,” Finn Lynge said.

Greenland has many social problems like alcoholism and a high suicide rate.

“No one can build an independent state on heavy drinking”, Finn Lynge has stated.

So will the Unionists win the day?

Will the credit crunch and the example of their neighbour Iceland’s financial troubles persuade the Greenlanders to vote against further powers for their Parliament?

We’ll all need to wait and see.

HBOS merger could end Treaty of Union

I thought it was interesting listening to Jim Spowart, founder of Standard Life and Intelligent Finance, on Sunday’s The Politics Show on BBC Scotland.

He offered the view that if the HBOS merger with the Lloyds TSB happened it could break the Treaty of Union between Scotland and England.

Spowart has been a long-time advocate against Scottish independence, so his views should be taken as a warning to Unionists over the proposed bank merger.

He estimated that around 100 000 jobs in Scotland, primarily in the central belt, could be lost if the proposed merger happens.

That figure includes jobs from businesses indirectly linked to the HBOS headquarters in Scotland, as well as the losses expected from HBOS themselves.

An absolutely huge figure.

The merger is seen as supported by the Prime Minister Gordon Brown, and even caused by his mismanagement of the economy in the first place.

So if 100 000 people did lose their jobs in the central belt I doubt they would have much incentive to vote Labour.

The fact that Labour’s heartlands in Scotland are in the central belt, especially in the west, probably won’t have escaped many Labour councillors, MSPs, MPs etc.

And as witnessed in the Glasgow East by-election those voters will predominately switch to SNP en masse.

The HBOS merger might just lead to Labour meltdown in Scotland.

And bring Scottish independence that much closer.

For all that, I doubt the SNP are cock-a-hoop wanting this merger to happen to finally realise their dream of independence. Independence could happen with any number of political scenarios; I very much doubt the SNP want Scotland to lose 100 000 jobs to achieve it.

Why pick the worst option to achieve independence when there is something inevitable about it happening anyway?

Any number of political scenarios could bring about independence for Scotland. The challenge for the Unionists is that each scenario they have to win; nationalists only have to win once: can anyone name a nation who once democratically free and independent actually wanted to go back to its old imperialist masters? That fact alone suggests that independence must be the best way forward for Scotland.

I don’t see Ireland wanting to be back in under UK rule, or Iceland – even with its current financial troubles – wanting to be back under Danish rule.

Independence will happen anyway. It would be a shame if it happened like this.

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Rankings and levers

Newspapers have been quoting the survey by the World Economic Forum in which business leaders have been rating the solvency of world banks.

The rankings however were compiled just before the recent £50 billion bail-out by the UK, the nationalisation of the Icelandic banks and the larger US bail-out.

The website has the co-authors interviewed from the 3rd to the 7th of October. The report itself was published on the 8th October.

RANKINGS

1. Canada

2. Sweden

3. Luxembourg

4. Australia

5. Denmark

6. Netherlands

7. Belgium

8. New Zealand

9. Ireland

10. Malta

11. Hong Kong

12. Finland

13. Singapore

14. Norway

15. South Africa

16. Switzerland

17. Namibia

18. Chile

19. France

20. Spain

21. Barbados

22. Bahrain

23. Slovak Republic

24. Brazil

25. Estonia

26. Austria

27. Panama

28. Mauritius

29. Kuwait

30. Qatar

31. United Arab Emirates

32. Trinidad and Tobago

33. Senegal

34. Israel

35. Portugal

36. Iceland

37. Cyprus

38. Botswana

39. Germany

40. United States

41. Lithuania

42. Peru

43. El Salvador

44. United Kingdom

45. Greece

46. Benin

47. Costa Rica

48. Malawi

49. Guyana

50. Malaysia

51. India

52. Puerto Rico

53. The Gambia

54. Montenegro

55. Mexico

56. Croatia

57. Czech Republic

58. Jordan

59. Ghana

60. Suriname

61. Brunei Darussalam

62. Latvia

63. Saudi Arabia

64. Kenya

65. Jamaica

66. Honduras

67. Zambia

68. Burkina Faso

69. Slovenia

70. Sri Lanka

71. Pakistan

72. Philippines

73. Republic of Korea

74. Romania

75. Thailand

76. Madagascar

77. Colombia

78. Cote d’Ivoire

79. Italy

80. Bulgaria

81. Hungary

82. Cameroon

83. Georgia

84. Oman

85. Tunisia

86. Paraguay

87. Nigeria

88. Armenia

89. Morocco

90. Dominican Republic

91. Bolivia

92. Malia

93. Japan

94. Tanzania

95. Moldova

96. Bosnia and Herzegovina

97. Poland

98. Nicaragua

99. Venezuela

100. Uruguay

101. Guatemala

102. FYR Macedonia

103. Syria

104. Albania

105. Nepal

106. Mozambique

107. Russian Federation

108. China

109. Uganda

110. Serbia

111. Egypt

112. Ukraine

113. Vietnam

114. Turkey

115. Bangladesh

116. Azerbaijan

117. Taiwan, China

118. Ecuador

119. Mauritania

120. Mongolia

121. Indonesia

122. Zimbabwe

123. Tajikistan

124. Kazakhstan

125. Cambodia

126. Burundi

127. Chad

128. Ethiopia

129. Argentina

130. East Timor

131. Kyrgyz Republic

132. Lesotho

133. Libya

134. Algeria

Yes. That’s right.

The UK lies behind Peru and El Salvador.

Now given this report was a survey of the world’s economists whose advice our banks were no doubt taking; should we believe it?

Are the UK’s banks really behind Peru, El Salvador and Senegal?

Or is it an accurate representation that is slightly out of date, compiled as it was slightly before the bail-outs?

That must depend on whether you believe the bail-outs will work.

If reports are to be believed the Royal Bank of Scotland is next in line to be nationalised tomorrow. If that happens then there will be further pressure on the remaining UK bank’s to be nationalised too. The banking sector could be picked off one by one by the market and the taxpayer forced to pick up the tab.

On that Iain Dale post there have already been comments about the English taxpayer bailing out the Scottish bank.

It must be a pity, to all those who carp, that Scotland is not already independent.

An independent Scotland with a similar oil fund like our neighbour Norway could be similarly insulated from these turbulent times.

It would also have the economic levers to maintain its economy best, not just for the South-East of England as remains the case today. Remember Eddie George, the former Governor of the Bank of England: Unemployment in the north is a price worth paying for affluence in the South!

Although the credit crunch is global, take a look back at those rankings.

Sweden, Luxembourg, Denmark, Belgium, Netherlands. All small countries lying in the top 10.

Even Ireland, who have recently guaranteed all deposits in their banks, are sitting 9th.

The argument that Scotland is too small to be financially unstable is farcical! I don’t hear anyone saying that Denmark is too small and should be run from Berlin. (Not since the days of Adolf Hitler and the Second World War anyway!)

As countries large and small struggle with the credit credit crunch from the U.S. and Russia down to Iceland with its 300 000 population, this population argument of independence must be seen to be invalid. Iceland, with a population slightly smaller than North Lanarkshire, isn’t exactly Miramont Gardens in Pimlico!

What matters now is that we take the right decisions to get out this mess.

Those decisions may be different for each country. They may even be different for England, Scotland, Wales and Northern Ireland.

That’s why its important key economic levers are devolved away from Westminster.

Otherwise the Eddie George syndrome will hamper ‘the North’ recovering for years.

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Cut to a whisper

In 1999, Scotland had eight MEPs. In 2004 due to other European countries joining the EU that was reduced to 7. With more countries joining the EU, the UK has had to cut its number from 78 to 73.

There was cross-party support in Scotland to keep our 7 MEPs and they hoped that such a lobby would keep its MEP numbers intact. Alas, Westminster has decided to cut Scotland’s numbers further down to 6 MEPs.

New numbers for MEPs sample selection (low numbered nations):-
3 Northern Ireland
4 Wales
5 Malta
6 Luxembourg
6 Cyprus
6 Estonia
6 Scotland
7 Slovenia
9 Latvia
12 Ireland
13 Finland
14 Denmark

As you can see both Malta and Luxembourg by dint of their independence have 5 and 6 MEPs respectively.

Both have a population less than Edinburgh. They have more influence in Europe than Scotland, Wales or Northern Ireland. They are Members of the Council of Europe, attend European summits, and each have the Presidency of the Council of the European Union on a rotating basis with all of the other members.

Ireland has a population about 1 million less than Scotland with twice as many MEPs.

Denmark has a population around Scotland’s size with 14 MEPs.

And this Labour Westminster Government wants to cut our representation?!

Scotland will now have lost 25 % of its representation in the last ten years.

Incidentally, Germany over the same time period and with new nations joining Europe has the exact same number of MEPs; 99. Luxembourg who will have exactly the same number of MEPs as Scotland with under a tenth of the population of Scotland are also unchanged.

Northern Ireland has a fixed ratio of three MEPs as the EU class that as a region. Regions can’t go below 3 MEPs.

If Northern Ireland was independent that number, with a population comparable to Slovenia, would rise to 7.

Wales, like Scotland and Northern Ireland, is considered a region and hence both can’t have less than 3 MEPs. Wales has lost none of its representation over the same period.

If the Welsh are feeling happy about this, I’ll just remind them that Wallonia, a region of Belgium, with roughly the same population, has 9 MEPs. And Latvia, an independent country with around 2 million people, has that many MEPs. Wales would have 11 MEPs if independent on that basis.

England will have 60 MEPs, but if independent that number would rise to about 70.

Scotland will now have the same number of MEPs as Yorkshire.

With its large geographical area – although you wouldn’t know it if you looked at a BBC weathermap – its own Parliament and legal systems that implement EU legislation; you may have thought Scotland had a great case for retaining its already meagre influence.

Not according to Bridget Prentice, the UK Electoral Affairs minister and Labour MP for Lewisham East.

She told Struan Stevenson, a Conservative MEP, just one of the cross-party support of Scotland’s case: “I acknowledge the issue of distance that Scottish MEPs face and would suggest taking steps to mitigate the time burden of travelling across the Scottish electorate, such as allocating travel responsibilities among the Scottish MEPs or more frequent use of video-conferencing.”

So she proposing dividing up Scotland between the MEPs? Our Scottish MEPs are elected for the whole of Scotland; that’s their constituency! How can she face her fellow Scottish Labour MEPs and MSPs, similarly campaigning for Scotland’s euro voice?

No wonder Mr Stevenson had this to say on her ideas: “Bridget Prentice has a fairly scant understanding of the Scottish dimension – surprisingly for a woman who is herself Scottish – but she’s been closeted too long in the cushy southern shires of England and forgotten the geography of Scotland. Her trite ideas, like video-conferencing and sharing travel, are ludicrous to the point of being risible.”

Surely its time for Scotland, England, Wales and Northern Ireland to have their own voices in Europe.

Scotland having its own voice would stop the situation where our fishing industry and Scottish ministers and MEPs are ignored by the UK Government.

A UK Government that has just cut Scotland’s voice in Europe to a whisper.

Its time to tell Westminster where to go!

Broadband take-up

These are the latest World Broadband ratings by ITIF:-

I’m going to concentrate this blog on the first column. That of broadband penetration; what percent of the countries population has access to broadband internet at home.

A recent Ofcom study found the UK’s figures slightly higher than ITIF, sitting at 57%. I hope this is indeed the case. I’ll use the Ofcom figures as accurate for the UK and the ITIF figures as accurate globally. Where the Ofcom figures match in the case of Belgium and the US, I’ll put the UK behind both countries as a low ranking 57%.

Sorting the ITIF list purely on Broadband takeup we get:-

1. South Korea 93
2. Iceland 83
3. Netherlands 77
4. Denmark 76
5. Switzerland 74
6. Norway 68
7. Canada 65
8. Finland 61
9. Australia 59
10. Belgium 57
11. United States 57
12. United Kingdom 57
13. Luxembourg 56
14. Japan 55
15. Sweden 54
16. France 54
17. Spain 49
18. Germany 47
19. Republic of Ireland 46
20. Austria 45
21. Portugal 44
22. New Zealand 42
23. Italy 41
24. Czech Republic 30
25. Hungary 29
26. Poland 23
27. Turkey 23
28. Slovakia 22
29. Mexico 20
30. Greece 18

I think that broadband takeup is the more relevant figure posted by ITIF. Speed and price are market factors, but the takeup figure roughly shows the percentage of people that use the internet and roughly shows your market audience. (Obviously countries with extremely large populations with lower takeup are not on the list e.g. China, India, Russia.)

Now regular readers might suspect that I’ll be analysing the UK figures in detail, and breaking them down to England, Scotland, Wales and Northern Ireland. They would be right!

As this blog already is on the long side though, I’ll refrain from the compare and contrast – till later.

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Arc of prosperity

The credit crunch. Soaring oil prices. Soaring utility bills. Soaring food bills.

One of the worst affected countries is the UK, but probably the most affected country is Iceland.

Now Iceland is regularly hailed by the SNP as part of the Arc of Prosperity, one of an arc of Scotland’s neighbouring countries that always seems to be doing rather better than us, outstriping the UK economy by miles.

One of the SNP’s goals is for Scotland is to join that Arc of Prosperity and better its economic growth rate. Obviously they claim independence would be the best route to achieve this; it gives Scotland full fiscal control over its own economy.

(Other countries in the Arc of Prosperity:-

Norway. Population 4.7 million
Denmark. 5.4 million
Finland. 5.3 million
Ireland 4.3 million
Sweden 9.1 million

All apart from Sweden have populations in size similar to Scotland; and all have had sigificantly higher economic growth than Scotland and the UK for many years now.)

So whats happened in Iceland? With the country performing so well economically and with a population of only 300 000 people, the banks wanted and got foreign investment. The Icelandic Government even loosened its fiscal policy before the 2007 election. Foreign capital poured into Iceland.

Now when the U.S. subprime mortgage market collapsed and started the credit crunch, foreign investors panicked and the money dried up. Some wanted their money back. All this has devalued the Icelandic kröna and forced the Icelandic bank to set interest rates at 15%. The country is now suffering the worst effects of the credit crunch I mentioned at the start.

Compare this with the U.S. They too are suffering the credit crunch, but are still receiving massive foreign investment. Why? Because they have a vast consumer-led population (around 304 000 000, around 1000 times bigger than Iceland’s). Hence the dollar has weakened recently; but relative to the Icelandic körna isn’t so bad and interest rates arent so bad.

One rate to look at is the current CDS rates of banks. These are Credit Default Swaps, basically a measure of how much insurance the bank needs for its debt. The higher the number the worse off the bank.

For example, when the Northern Rock was nationalised its CDS was at 295. [18 Feb 2008]

CDS have been increasing throughout the banking sector however. The US Bank Bear Sterns was bailed out by the US Government with a CDS of 720. [Mar 2008]

Other March 2008 CDS of banks were:-

Lloyds TSB 133
Barclays 170
HSBC 145
Bank of Scotland 235
Alliance and Lecicester 342

but the British banks were nothing like the Icelandic banks:-

Landsbanki 610
Kaupthing 856

Iceland, with a small population; for years one of the best economies in the world. It made a mistake relying on too much foreign capital. And when that foreign capital ran into problems, so did it. Its tough for the Icelanders, having being used to the good life for years, and now feeling the worst effects of the credit crunch. The credit crunch may be global but Iceland are feeling short term consequences of their own mistakes. Yet had the U.S. subprime mortgage market held up it may have never mattered.

Thats why the Icelandic government is now thinking of joining the Euro. The Euro is strong and the Eurozone – those countries that use the Euro as their currency – is now the biggest economy in the world, after the dollar weakened in March 2008. The Eurozone has a population of 320 000 000 people and is expected to grow as other European Union countries meet the criteria for membership.

So then what of the Arc of Prosperity? Is it in financial ruins?

Iceland may be in trouble now but remember they started from an economic base much higher than the UK or Scotland. Their problems are all relative, and will probably only result in a decline in economic growth for a couple of years, before resuming their position back near the top of the world’s economies. Even if these problems do continue then they always have the Euro to fall back on if needed, although their fishermen probably won’t like joining the EU.

What’s more another Arc of Prosperity country – Norway – has just given them 1.5 billion euros to shore up the Icelandic economy. And if Norway can afford to bail out other countries in the midst of a global credit crunch then the Arc of Prosperity can’t be doing that badly.

The Arc is better placed than most to ride out the credit crunch. I’m sure Gordon Brown and Alistair Darling will try their best for the UK.

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