Norway’s Arctic archipelago of Svalbard, facing harder times because of cutbacks at its controversial coal mine, is getting state assistance to diversify its economy. The justice ministry announced several initiatives on Wednesday to create new jobs, including possible relocation of some state employees.
The government wants to see more private companies establish themselves on Svalbard following job losses at the state-owned Store Norske coal company. Low prices for coal along with climate and environmental concerns mean that the historic firm’s days may finally be numbered.
In its new government report on Svalbard, released in conjunction with the revised national budget on Wednesday, Justice Minister Anders Anundsen made it clear that Norway will strive to maintain a lively and sustainable resident population on Svalbard – one that’s also “attractive for families.”
The area in the Arctic and Barents Sea is more strategically important than ever, not least after tensions between Norway, NATO and Russia have risen. It’s vitally important, officials say, to maintain a strong presence on Svalbard.
Now Anundsen said the government will concentrate on continuing to develop more research activity, tourism and higher education. “We want to work towards building up tourism in the Isfjord area and the areas around local communities,” Anundsen said. “We also want to clear the way for more all-around business within the framework of Svalbard policies.”
Norwegian Broadcasting (NRK) reported how Svalbard enjoys tax advantages (16.2 percent on income including social security taxes) as an incentive for people to move to Svalbard and set up businesses. The state business development agency Innovation Norway has set up an office on Svalbard and Gjermund Hagesæter, state secretary in the justice ministry, said it’s important to generate private-sector jobs. “We want to continue to have a stable and low tax level on Svalbard,” Hagesæter told NRK.
He said the government will also evaluate establishing some state jobs in Longyearbyen, Svalbard’s main municipality. There is no plan, however, for one large state agency to relocate to offset the job losses at Store Norske.
Both Hagesæter and Anundsen hope for more job creation within tourism. There’s strong international interest in visiting Svalbard, where the numbers of tourists can boom but also are restricted because of limited accommodation. Around 300 jobs on Svalbard are currently tourism-related, and Hagesæter expects that number to grow. “At the same time,” he cautioned, “it’s important that tourism growth doesn’t come at the expense of the nature.” There already has been environmental concern over the numbers of flights and cruiseships in the area.
The government is, meanwhile, proposing to strengthen the climate- and environmental research activity on Svalbard. Responsibility for the research station at Ny-Ålesund will be transferred from the trade ministry to the ministry for climate and the environment. The Norwegian Polar Institute will take over responsibility for operation of the research station and coordination of research activity in Ny-Ålesund, in which many countries participate.
The initiatives seemed generally well-received. Rasmus Hansson of the Greens party said the government’s plans for Svalbard must be an Arctic version of the so-called “green shift” that’s long been on the government’s agenda as Norway moves away from reliance on its oil industry.
On a practical side, Anundsen said that NOK 10 million will be spent on simply securing buildings on Svalbard, in the wake of an avalanche that destroyed some homes last winter. That’s in addition to NOK 50 million in state funding for job creation and economic diversification efforts.