The economy of Svalbard is dominated by coal mining, tourism and research. In
2007, there were 484 people working in the mining sector, 211 people working in
the tourism sector and 111 people working in the education sector. The
same year, mining gave a revenue of NOK 2.008 billion, tourism NOK 317 million
and research 142 million. In 2006, the average income for economically active
people was NOK 494,700, or 23% higher than on the mainland. Almost all housing
is owned by the various employers and institutions and rented to their
employees; there are only a few privately owned houses, most of which
are recreational cabins. Because of this, it is nearly impossible to live on
Svalbard without working for an established institution. The Spitsbergen
Treaty and Svalbard Act established Svalbard as an economic free zone and
demilitarized zone in 1925. Taxation
The Spitsbergen Treaty of 1920 established full Norwegian sovereignty
over the archipelago. The islands are, unlike the Norwegian Antarctic
Territory, part of the Kingdom of Norway and not a dependency. The treaty came
into effect in 1925, following the Svalbard Act. All forty signatory
countries of the treaty have the right to conduct commercial activities on the
archipelago without discrimination, although all activity is subject to
Norwegian legislation. The treaty limits Norway's right to collect taxes to that
of providing services on Svalbard. Therefore, Svalbard has a lower income
tax than mainland Norway, and there is no value added tax. There is a separate
budget for Svalbard to ensure compliance. Svalbard is a demilitarized
zone, as the treaty prohibits the establishment of military installations.
Norwegian military activity is limited to fisheries surveillance by the
Norwegian Coast Guard. The treaty requires Norway to protect the natural
environment. Mining
Since the resettlement of Svalbard in the early 20th century, coal mining has
been the dominant commercial activity. Store Norske Spitsbergen Kulkompani, a
subsidiary of the Norwegian Ministry of Trade and Industry, operates Svea Nord
in Sveagruva and Mine 7 in Longyearbyen. The former produced 3.4 million tonnes
in 2008, while the latter uses 35% of its output to power the power station in
Longyearbyen. Since 2007, there has not been any significant mining by the
Russian state-owned Arktikugol in Barentsburg. There have previously been
performed test drilling for petroleum on land, but these did not give
satisfactory results for permanent operation. The Norwegian authorities do
not allow offshore petroleum activities for environmental reasons, and the land
formerly test-drilled on has been protected as natural reserves or
national parks. Fishing and hunting
Svalbard has historically been a base for both whaling and fishing. Norway
claimed a 200 nautical miles exclusive economic zone around Svalbard in 1977,
with 31,688 square kilometres of internal waters and 770,565 square
kilometres of EEZ. Norway retains a restrictive fisheries policy in the
zone, and the claims are disputed by Russia.
Tourism Tourism is centered around Longyearbyen.
Activities include hiking, kayaking, walks through glacier caves and
snow-scooter and dog-sled safari. Cruise ships generate a significant portion of
the traffic, including both stops by offshore vessels and expeditionary
cruises starting and ending in Svalbard. Traffic is strongly concentrated between
March and August; overnights have quintupled from 1991 to 2008, when there
were 93,000 guest-nights. The world's northernmost blues festival,
Dark Season Blues, is an annual event in late October in Longyearbyen, and marks
the beginning of the dark season when daylight and the sun is about to leave
Svalbard for four long winter months. Norway announced in February 2012 that,
in order to protect the islands from the danger of a ship running aground and
possibly causing an oil spill within a pristine fjord, it would implement a
requirement for cruise ships to carry a licensed pilot in order for the ship to
enter any of the islands' fjords. Many of the fjords on Svalbard are quite
dangerous, with strong torrents and narrow fairways. The pilot requirement
will be phased-in gradually. Starting in 2012, all vessels going to the Svea coal
mine had to carry a pilot. Starting in 2013, all passenger vessels over 150
meters had to have a pilot when going into one of the fjords on Svalbard. And
starting in 2014, all boats over 70 meters and all passenger vessels longer
than 24 meters needed to have a pilot when entering one of the fjords.
Research Research on Svalbard centers around
Longyearbyen and Ny-Ålesund, the most accessible areas in the high Arctic.
Norway grants permission for any nation to conduct research on Svalbard,
resulting in the Polish Polar Station and the Chinese Arctic Yellow River
Station. The University Centre in Svalbard in Longyearbyen was established
in 1993 and offers undergraduate, graduate and postgraduate courses to 350
students. The Svalbard Global Seed Vault is a "doomsday" seedbank to store seeds
from as many of the world's crop varieties and their botanical wild
relatives as possible. A cooperation between the Government of Norway and the
Global Crop Diversity Trust, the vault is cut into rock near Longyearbyen,
keeping it at a natural −6 °C and refrigerating the seeds to −18 °C. The
Svalbard Undersea Cable System is a 1,440 km fibre optic lines from Svalbard
to Harstad, needed for communicating with polar orbiting satellite stations
on Svalbard. Transport
Within Longyearbyen there is a road system, but it does not connect with any
other settlements. The town does have a bus system, Off-road motorized transport
is prohibited on bare ground, but snowmobiles are used extensively during
winter—both for commercial and recreational activities. Transport from
Longyearbyen to Barentsburg and Pyramiden is possible by snowmobile by
winter, or by ship all year round. Svalbard Airport, Longyear, located 3
kilometres from Longyearbyen, is the only airport offering air transport off
the archipelago. Scandinavian Airlines has daily scheduled services to Tromsø
and Oslo; there are also irregular charter services to Russia.
Lufttransport provides regular corporate charter services from Longyearbyen to
Ny-Ålesund Airport and Svea Airport for Kings Bay and Store Norske. There are
heliports in Barentsburg and Pyramiden, and helicopters are frequently used by
the governor and to a lesser extent Arktikugol.
References = Bibliography =
Arlov, Thor B.. Svalbards historie. Oslo: Aschehoug. ISBN 82-03-22171-8.
Umbreit, Andreas. Guide to Spitsbergen. Bucks: Bradt. ISBN 1-84162-092-0.