Advice from the Arctic: 4 key development challenges facing the far north

SEATTLE — Remote villages that lack reliable electricity access. Poorly built homes with no indoor plumbing. Food insecurity in a community practicing traditional subsistence hunting and fishing. Stubbornly persistent poverty in rural pockets. Environmental concerns as multinationals hunt for oil, gas, and minerals.

This slate of issues sounds like textbook development challenges afflicting low- and middle-income countries. But the ones in question here can be found in the United States, Canada, Russia, and to a lesser extent the Nordics — among the richest countries on the planet.

Such is the conundrum of the Arctic, an underdeveloped region that finds itself inside the jurisdiction of high-income nations. For professionals looking to tackle some of the sustainable development needs in the far northern latitudes — a sparsely populated corner of the globe that accounts for 4% of the planet’s landmass — the challenges go far behind the extreme cold and harsh weather.

Last week, national policymakers, local elected officials, indigenous representatives, private sector innovators, climate scientists, and foreign diplomats gathered in Seattle, Washington, for the sixth annual Arctic Encounter Symposium to discuss this complex and little understood region.

Devex spoke with over a dozen experts with deep knowledge of the Arctic, who offered key advice for outsiders looking to dip their toes into the region’s icy waters.

1. Remember, you are on indigenous land

Eight national governments that make up the Arctic Council, a two-decade-old, high-level intergovernmental forum, drew the borders that currently divide the Arctic. But distant capitals lack the local knowledge of how to live sustainably in the harsh region originally settled by indigenous communities.

They include major players such as the Inuit — who run an international NGO stretching from eastern Russia across Alaska and Canada all the way to Greenland — and the Saami, who maintain their own parliaments across northern Scandinavia.

“The task is to bring sustainability back to our communities again, now that we have transitioned to cash or mixed economies, build houses using materials that do not originate in our regions, and use fuel to propel ourselves in the way of the rest of the world,” said Cordelia Qiġñaaq Kellie, an Alaskan Inupiaq and government affairs adviser for Ilisagvik College.

“We cannot go back; we can only go forward, and perhaps that path forward is creating almost a third way of being, that incorporates the best of all technologies, led by indigenous peoples who know the environment, lands, systems, and resources the best,” she said.

Some of that effort is underway with organizations such as the Cold Climate Housing Research Center, which is drawing on traditional indigenous housing typologies to design climate-resilient buildings using 21st-century technology and materials.

In other contexts, that could mean partnering with First Nations self-governments in Canada or Alaska’s native corporations — a uniquely Alaskan system of indigenous-led, private corporations — and their nonprofit partners. Microgrid maintenance software enterprise 60Hertz has done this, to deliver reliable electricity to remote communities.

“I don’t know how we would have been successful flying in and meeting the operators in the power plants where we wanted to work without the chaperoning and endorsement of their native corporation or nonprofit,” 60Hertz founder Piper Wilder said.

She reflected on the cultural sensitivities required of working in predominantly indigenous communities: “There is a lot of value in showing up in sincerity and humility,” she said. “I’ve bent over backwards to look for local hires and invest in native employees.”

Above all, from Western and indigenous counterparts alike, she added, “there’s a very high sensitivity to carpetbaggers in the Arctic.”

2. Beware the ‘double minority’ trap

The World Bank is not going to lend money to the U.S. to provide water and sanitation services in Alaska, despite the fact that 12,600 rural homes still lack complete plumbing and/or kitchens, according to the 2018 state housing needs survey. At the same time, national and provincial or state investment is unreliable, arguably a far less ready source of funds than development financing institutions are for the mid-latitude developing world.

A decade ago, Canada unveiled a Northern Strategy, with a social and economic development pillar that has delivered in fits and starts — most recently, a 300 million Canadian dollar ($224 million) commitment to build affordable housing in the north. Russia’s Arctic policy, meanwhile, has established so-called “support zones” to maintain a viable economy in the far north, one-third of the country’s landmass.

How these public policies trickle down to those attempting to deliver better energy systems, improve housing conditions, and tackle indigenous health issues such as growing rates of obesity and diabetes rarely involves big-ticket contracts.

“You might compete for 12 months to land a $40,000 procurement,” Wilder said.

Dwayne Menezes, founder and managing director of the Polar Research and Policy Initiative, echoed this frustration, which he called the “double minority” dilemma.

“Because the northern bits of these highly developed countries are not recognized as developing despite sharing the challenges of the developing world, there is a problem when it comes to funding from infrastructure to research,” he said.

3. Heavy-duty Arctic infrastructure financing could be on the way — and it needs guidance

With the warming Arctic, there has been increasing global attention on the potential for new maritime shipping routes and longer periods of ice-free ocean in which major defense powers including Russia, China, the U.S., and Canada are maneuvering. This so-called “opening of the Arctic” has put up to $1 trillion in infrastructure investments in the Arctic pipeline, according to a 2016 study by private equity firm Guggenheim Partners, which has developed an Arctic Investment Protocol aligned with the Sustainable Development Goals.

Some corners are calling for a dedicated Arctic Infrastructure Bank financed by the Arctic nations, a move that could jumpstart regional development.

The Polar Research and Policy Initiative, meanwhile, is calling for an Arctic Infrastructure Standard to ensure that outside contractors build properly in a region whose melting permafrost and coastal erosion is already causing the need to rebuild and relocate entire communities.

“Even when local mayors and local leaders fight for investment and they get it, the way the money is spent and the infrastructure is built is not always to the right standard,” Menezes said, pointing to the CAD$300 million all-season road opened in 2017 that connects Tuktoyaktuk, Northwest Territories, to the rest of Canada, but may not be built to withstand the expected traffic of a deep-water port that could make Tuktoyaktuk a transfer point on the new Arctic shipping routes.

4. As resource extraction looms, a need to diversify economies

Offshore drilling in the oil-rich Arctic is a tantalizing prospect for petroleum companies, and the region is a potential treasure trove of coal, iron ore, zinc, lead, nickel, and precious metals. As multinational resource companies circle the circumpolar world, the region must diversify its economy with a focus on small- and medium-sized enterprises.

“When multinationals come in, yes you can have agreements in place, but the vast majority of profits get diverted back to existing finance capitals,” Menezes said.

“How do we support entrepreneurs and SMEs that live and operate in the region? That’s the money that’s going to be kept in the local community and possibly reinvested in local development.”

He is looking to the Organisation for Economic Co-operation and Development’s SME program as a possible avenue to help Arctic small businesses get off the ground — as all eight Arctic nations are OECD members.

Rebecca Lynge, a Greenlandic diplomatic representative to the U.S., is keen to see her semi-autonomous homeland wean itself off its over-reliance on fisheries, which account for 90% of the economy. But without direct air links to anywhere besides Iceland and Denmark, establishing a service economy is challenging for the massive but isolated country.

Still, she does not think the race for Arctic resources will erode principled stances about how to develop sustainably in a territory with strong institutions inherited from the Danish.

“There is too much at stake,” she said. “This has been our homeland for 4,000 years.”