Econ_May_05

52 Europe

The Economist

May 5th 2018

HORTLY before the start of

climate

talks in Paris, in December 2015, giant

blocks of ice were shipped in from Green-

land and left to melt outside the Panthéon,

reminding conference-goers to get serious

about global warming. Ironically, a mere

48 hours after the talks concluded, Green-

land, a self-governing part of Denmark,

said it wanted to opt out of the climate

agreement that had just been reached. The

melting of Greenland’s ice sheet, which

covers 80% of the island, has turned out to

be an economic blessing for most of its

56,000 residents, 90% of whom are Inuit.

The territory boasts a tenth of the world’s

known deposits of rare-earth metals, and

the receding ice is making more minerals

accessible for the first time. More bits ofthe

island are also being opened to tourists.

Greenland is over-reliant on fishing;

some 90% of its exports taste good with

butter and lemon juice. Danish subsidies

keep its economy afloat. Last year the an-

nual block grant from Denmark was 3.8bn

kroner ($610m), more than a third of

Greenland’s budget. Many Greenlandic

politicians reckon that new revenue

streams frommining and tourismcan help

to wean the territory offDanish handouts.

“We want to rid ourselves of the block

grant because we want independence,”

says Kim Kielsen, the prime minister,

whose ruling centre-left Siumut partywon

themost votes in an election on April 24th.

More radical pro-independence parties did

well. One such party, Naleraq, wants to see

Greenland become independent by 2021.

Unlike mainland Chinese, whose an-

gerwould undoubtedly boil overwere Tai-

wan ever to declare independence, most

Daneswouldbe “fine, maybe a little sad” if

Greenland left, says Jon Rahbek-Clem-

mensen of the Royal Danish Defence Col-

lege. Denmark’s government, however, is

less sanguine about a potential separation,

even though it accepts that Greenland has

the right to secede if it wants to. That is be-

cause Denmark uses Greenland to punch

above its weight, notes Mr Rahbek-Clem-

mensen. In 2014 Denmark laid claim to

some 900,000 square kilometres in the

Arctic, including the North Pole, citing its

association with Greenland. And Den-

mark has been able to get away with

skimping on

NATO

’s defence-spending tar-

get of 2% of

GDP

, many suspect, because it

has long allowedAmerica to operate amil-

itary base in Greenland. (Greenlanders

were not consulted.)

In recent years Chinese state-backed

firms have been pouring money into

Greenland’s rare-earth mines. One Chi-

nese-financed mine in Greenland’s south

is reckoned to contain the world’s second-

largest deposits of rare earths.

Greenland is open to investments re-

gardless of where they come from, ex-

plains Mr Kielsen. Chinese money is help-

ing Greenland to reduce its reliance on

Danish subsidies, thus boosting the pro-in-

dependence cause. That is also why Mr

Kielsen is keen to attract Chinese tourists.

In October he led a delegation to China

and gave an impassioned pitch about

Greenland’s natural wonders. As Green-

land drifts away from its old colonial mas-

ter, it might need toworry about becoming

a vassal state of another.

Greenland

Throwing off the

Danish yoke

The independence cause gets a helping

hand fromChina

Georgian chic

Reaping what it sews

ELIVERYguy or trendsetter? These

days, it’s hard to tell. Vetements, a

Zurich-based fashion house, showed off

-shirt inspired by

DHL

, a courier firm,

in 2015. For amere $200 a shirt, the young

and ironically chic can lookalmost but

not exactly like the chapwho brings

boxes to their parents’ doors. The

-shirts

sold out in an instant.

This is called “anti-fashion”: tweaking

mundane items and sending themdown

the catwalkwith eye-watering price tags.

Vetementsmakes a packet out of it. The

label’s founder, a native ofGeorgia

namedDemna Gvasalia, is also the

creative director of Spain’s Balenciaga, a

fashion housewhich sells something like

IKEA

blue carrier bag for $2,145. Youth-

ful hypebeasts can’t get enough of them.

Mr Gvasalia fled the Georgian civil

war as a child and studied design in

Antwerp. Nowhis homeland is latching

onto his success. Georgia oncemade drab

clothes for the victims of communism; its

garment industry collapsedwith the

Soviet Union. Now it serves fashion

victims everywhere. Western stylists,

buyers and journalists flock to the Cau-

casus to spot the next big thing. Georgian

designers sell theirwares in London,

Paris andNewYork. Clients include

Rihanna and LadyGaga. Tbilisi hosts not

one but two fashionweeks.

Fashion is hardly amainstay of the

Georgian economy. Duller exports such

as nuts and copper ore are far bigger. But

the beauty buzz puts Georgia on themap,

where tourists and investors can find it.

Last year 7.5mpeople visited—twice

Georgia’s population, and up almost

sixfold since 2008.

Financial aid from the European

Union has helped local businesses up-

date their equipment andmeet the quali-

ty standards needed to sell kit in Europe.

In 2017 exports to the

totalled $646m,

13% higher than the previous year. Some

70% ofGeorgianswant to integratemore

with the

, and the country has had an

association agreement to do just that

since 2016. Flashy frockswill not make

Georgia rich, let alone defend it against

Russian aggression. But being on the

minds of the global jet-set surely can’t

hurt. The BlackSea is the newblack.

TheCaucasiannation that spawned “anti-fashion”

Georgia on her mind

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