As everybody knows, Santa Claus lives in the North Pole.
More specifically, in the Svalbard archipielago, where there
is the northernmost human settlement. Svalbard is the only
place on Earth where you don´t need a visa to enter.
However, their 2600 habitants must be self-sufficient and
carry a gun anytime they leave the main town. This is
because of the polar bears population, who might tear your
body apart with no mercy if they find you unarmed. But,
over all, Svalbard, which belongs to the Kingdom of
Norway, is the hotspot of a political dispute with Russia.
Yes, this frozen paradise has pretty good chances to
become the new Dubai. They have one of the bigges oil
beds in the world. And even more! They are the Gateway to
the Artic route, a new commercial route that might become
one of the most important ways for the international trade.
This is why Svalbard is more than another territorial dispute.
We are talking about a new cold war involving the United
States, Canada and even China. Today, we will tell you the
story. Imagine a land with open doors for immigrants,
no matter
where do they come from. A place where military presence
is forbidden because it´s a demilitarized zone. A fiscal
haven with the average salary of Norway. Well… this place
exists and it´s called SVALBARD. And yes, it is in the North
Pole. If you go to Svalbard, there is no need to worry about
catching a cold or a flu: the extremely cold temperatures
make it impossible for virus and bacterias to stay here.
And, by the way, in their capital, LONGYEARBYEN, is
where you can find the world´s biggest liquor collection.
Just like that. If you wanna try a cognac from the 19 th
century or a rare and exclusive whisky, Karlsberger Pub is
the place to go. Let me introduce you to their owner, Steve
Dorfssen. At
the beginning of the XX Century, Svalbard was a no
man´s land and only some whale fishermen would dare to
go through the place. Nonetheless, after the First World
War, almost all the countries signed the Svalbard Treaty.
There it´s written that Norway holds the sovereignity over
the territory… But with some restrictions! Basically,
Norwegian government is banned to put any ban. They
can´t send their army, nor build any headquarter or
stronghold. And they must allow every citizen or company,
no matter where are they from, to enter the islands and
exploit their natural resources. And this is how two cities
where born.
On one hand we have LONGYEARBYEN, where the
majority of the population is Norwegian. On the other hand
there is BARENTSBURG, with a Russian majority. In both
cases, they started as coal-miners settlements.
And now you might wonder Where do the mining
companies pay their taxes in Svalbard? Well… despite
being a Norwegian territory, the Svalbard treaty forbids to
any country to tax the profits. This means, their citizens pay
the minimum required to finance their own governance. In
other words: Svalbard could be considered as a fiscal
haven. They have no VAT and their corporate tax raises to
a 16%, which is even lower than Singapore´s. But make no mistake! All those thai, russians
and
swedish
people are not coming to Svalbard attracted by the low
taxes, nor the coal mines. As you can imagine, picking coal
in the North Pole is an expensive and not profitable
business… “Svalbard coal mine halts production”
And you will wonder… If coal is not profitable… Why are
there so many people coming here? Let me remind you
that, during winter, Svalbard lives a never ending night
where there is not even a single minute of daylight.
Of course, some of those men and women work on the
several science research centres existing in the
archipielago. Actually, since 2008, Svalbard has the Global
Seed Vault. An storage pit paid, mainly, by Bill and Melinda
Gates Foundation and Microsoft. Here they store a
collection of seeds for all the different kind of plants that
exist in the world. In case of a nuclear holocaust, mankind
would be able to replant the planet thanks to this great
vault. And it´s protected against any kind of attack.
But this is not the reason why Svalbard is so important. In
fact, there is something more juicy than coal, polar bears,
science or Santa Claus himself… “The Arctic holds an estimated 13% (90 billion
barrels) of
the world's undiscovered conventional oil resources and
30% of its undiscovered conventional natural gas resource”.
Exactly! They have oil! But not only that! Imagine for a
second that you want to ship some good from LONDON to
TOKIO. Today, the fastest route would be this one.
But imagine you could do this using another route. Do you
see? This is almost half of the distance. This means less
spending and a faster logistics. Technology and climate
change are making possible to travel through Arctic ocean.
And this would be a turning point in the international trade.
One day, this will be a reality. And that day, Svalbard has
the highest chances to become the Arctic capital. The rest
of the islands around belong to Russia and are have no
human population. Greenland, on the other hand, has a
chaotic legal system. Meanwhile, Svalbard has a strong
political system and good infrastructures. The proof is this
interview to Steve, held through Skype. But wait a minute
because here it is the best part! All this Arctic oil is under the sea. This
means, the above-
the-ground land of Svalbard has no oil beds, at least that
we know it. All their wealth is on the so-called
CONTINENTAL SHELF. This is the underwater landmass
which extends from a continent no deeper than 200m.
According to the international law, the continental shelf
belongs to the country it is attached to. And, of course, it
includes all the resources beneath. So it should be the
government of a country the one to decide whether if they
allow companies to exploit this resources or not.
And yes, both Norway and Svalbard´s archipielago are on
the same contintental shelf. Therefore, in normal conditions,
Norwegian Government should have sovereignity over this
oil.
BUT!!!! Do you remember what it is said on the Svalbard
Treaty? Every country can exploit the resources and
Norway can do nothing to stop them.
The problem? Well… that treaty sais nothing about the
continental shelf or anything under the water. At the end of
the day, when it was signed, no one would think about
extracting oil from the bottom of the ocean.
And this is why, news like this one make people so nervous.
“Russia believes Norway is violating the Svalbard Treaty
when the Norwegian government opens three blocks for oil
drilling in the Barents Sea, close to the Arctic archipelago.”
In summary, Russia sais the continental shelf of Svalbard
should adjust to the treaty and be exploited by any country.
But Norway claims that since the legal text didn´t include
anything about this, the oil and the rights to extract it
belongs to them. And… what was Russia´s answer? You might
still think this
North Pole thing is a small story. One of those things for
academics and diplomats to have discussions while having
dinner. But the truth is, Vladimir Putin sent to his VICE
PRIME MINISTER, Dimitry Rogozin, to make a
controversial visit to the archipielago. But wait! The best is yet to come! This visit
torn Svalbard
into a fashionable tourism destination amont the russians.
In the last 2 years, the Svalbard tourism has increased at a
500% rate. As I said from the beginning, there are two
villages on the main island: the Norwegian and the Russian,
which is called BARENTSBURG, with a population lower
than 500 people. Well, just in the year 2015, they had more
than 60.000 tourists.
And now you might wonder Why Russian tourism is
that
important in Svalbard? Well, it helps to retain population.
For a better understanding, in the Russian settlement
there
is no currency. The mining company takes care of
everything. Something like this happened on the Norwegian
settlement too. But then, tourism started and that brought
new kinds of business and different people.
Watch out! Here we are talking about oil and influence in
what might become one of the main sea routes in the
World. In fact, even China is trying to buy properties here.
But we will talk about this in another video.
And now we wanna hear your opinion Do you really think
Svalbard might become a new and frozen Dubai? Shall
Norway let Russia exploit the Svalbard oil? You can leave
your answer in the comment section below.
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