Reykjavík Grapevine - 09.09.2011, Blaðsíða 12

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12
The Reykjavík Grapevine
Issue 14 — 2011 If Mr. Nubo sticks to doing what he says he's going to do, then his buying up that territory doesn't
sound that awful, right? Or does it? Do we have ways of keeping him from doing evil stuff there?
WE DON'T KNOW! Do y'all?
It seems Iceland re-
ally can't catch a break.
Where investment in the
country used to be attrac-
tive during the boom years in the
interests of growth (e.g., low cor-
porate taxes, high interest rates),
it lately seems that it's Iceland's
financial anaemia that has drawn
the interest of a different breed of
venture capitalists—people hoping
to cash in while the price tag is low
and the government is starved for
cash. The current situation puts
Iceland in a much more difficult
position for negotiation. Govern-
ment officials seem skittish about
serious haggling, as the conven-
tional wisdom seems to be that the
country needs money more than
investors need to put money in it.
This can be seen in the way in which
Alterra Power—formerly Magma En-
ergy—used a loophole in the law to
be able to invest in Iceland in the
first place, openly and demonstrably
lied about their intentions, and got a
contract anyway. This continued with
the arrival in the press of David Les-
perance, a lawyer representing ten
wealthy individuals who effectively
wanted to buy Icelandic citizenship, in
return for which they promised to in-
vest their money in the country. Suspi-
cions about some of the individual ap-
plicants put the deal on ice, but it likely
won't be the last time someone returns
with the same offer.
WHO IS HUANG?
This brings us to what seems to be
the new front in investment in Ice-
land: China. Chinese company Hisjang
Group approached the tiny municipal-
ity of Þórshöfn with a straightforward
proposal—they want to ship 100.000
tonnes of fresh water from Iceland to
China each year. The project would be
lucrative, and have very little environ-
mental impact, if it weren't for the fact
that some officials doubt that Þórshöfn
can even produce that much water ev-
ery year.
Not so straightforward, and with
perhaps greater environmental impact,
is the case of Huang Nubo, a wealthy
tourism entrepreneur who wants to pay
1 billion ISK for land at Grímsstaðir á
Fjöllum to build an eco-friendly luxury
hotel. He has made assurances that he
will deploy a team to assess the least
environmentally impacting means of
raising such a hotel, and has also of-
fered to forswear rights to water in and
running through the area.
But not everyone is greeting the
proposal with open arms. For one, the
land he wants to buy isn't exactly a
garden patch. In fact, it's pretty huge,
comprising about 0.3% of Iceland's
landmass. Also, it seems Huang Nubo
has been involved in some less-than-
scrupulous business practices in the
past. One China studies blogger wrote
that Beijing Zhongdian Investment
Corp, at the time controlled by Huang
Nubo, “is notorious for cheating villag-
ers whose land is developed for tourism
and giving them very little of the hefty
admission fees they charge tourists.
The sites themselves are often devel-
oping in a way that is ugly and not cul-
turally sensitive.”
TOO CHUMMY?
Complicating matters is that many Ice-
landers believe he's a bit too chummy
with some of Iceland's politicians. He
is good friends with Hjörleifur Svein-
björnsson, the husband of former
Foreign Minister Ingibjörg Sólrún Gís-
ladóttir. Huang Nubo and Hjörleifur
have apparently been friends for a long
time, and it has been reported that dur-
ing a visit to Iceland last year, Foreign
Minister Össur Skarphéðinsson lent
him a ministry car for being shown
around the country. Furthermore, at a
press conference Huang Nubo recently
gave in Beijing, reporting on his nego-
tiation progress with Icelandic authori-
ties, sitting in the audience was former
MP Lúðvík Bergvinsson.
The Icelandic blog world has been
on fire over Huang Nubo, with criti-
cisms ranging from substantial to na-
tionalistic. Minister of the Interior Ög-
mundur Jónasson has told the press
that he wants to approach the matter
cautiously—which is pretty much what
he said before Lesperance and co.
were shown the door. Being a savvy
businessman, Huang Nubo is probably
aware of the great public resistance
that Magma and others were met with
when they made their play for Iceland,
and realises that time is of the essence.
His awareness of this is made more ap-
parent by the fact that at the previously
mentioned press conference, he very
publicly stated that he isn't pleased
with how talks have been going, and
that if things don't get moving soon, he
may just nix the deal altogether.
Here again, we become aware of
Iceland's position—needing money
from others more than others need to
give it money. The not-so-subtle urge
for expediting matters may push au-
thorities to approve the deal. Before
that happens, they will have to con-
vince the Icelandic people that this deal
is good for the whole country, not just
the government coffers.
Opinion | Paul Fontaine
In Iceland, another potential investor arouses suspicion
HERE WE GO ... AGAIN! Red Flag Over Grímsstaðir?
The big Iceland media stir
this last month was Chi-
nese tycoon Huang Nubo’s
attempted purchase of 300
square kilometres of pristine Icelandic
countryside in Grímsstaðir á Fjöllum,
in the northeast of the country. Huang
styles himself as a poet and adventurer,
and although he worked for the Chinese
government for a greater part of his ca-
reer—as section chief for the Commu-
nist Party’s propaganda department and
administrator within the Construction
Ministry—he maintains his intentions
are motivated purely out of love of na-
ture and his on-going investments in
eco-tourism.
Numerous sources point out that
Huang is clearly a party-insider. “His
company, Zhongkun…” notes the In-
dependent, “manages many of China’s
most famous tourist landmarks, such
as Hongchun in Anhui Province and
Zhongdian in Tibet.” (One of his former
government employers, the Construc-
tion ministry, is responsible for preserv-
ing historical sites, and it is implied that
obtaining a contract to run state-owned
tourist facilities can only occur with
the ‘right’ connections—what Chinese
businessmen call guan xi). Outside of
China and Iceland, Huang also has proj-
ects in the works in Nashville and Los
Angeles as well as in Japan.
An evil scheme?
In fact, the Independent intimates that
this may not just be one man’s ambition,
stating, “Beijing is always looking for
ways to expand trade links around the
world; Iceland occupies a strategically
important location between Europe and
North America and could potentially
function as a hub for Asian cargo should
climate change open Arctic waters to
shipping.”
Quoted in Deutsche Welle, Jonathan
Holsag, head of research at the Institute
of Contemporary China Studies, said,
“While this project in Iceland might be a
private initiative, it fits in a broader (Chi-
nese) policy agenda to get hold of stra-
tegic assets abroad, ranging from land,
over raw materials, to know-how.”
President Ólafur Ragnar Grímsson
welcomed Huang’s investment in Ice-
land, telling the Financial Times that at
the height of Iceland’s economic woes,
Europe and the US abandoned his little
Atlantic nation, but, “China and India
lent Iceland a hand in many construc-
tive ways…” He explained to the FT that
he personally wrote to China’s Presi-
dent Hu Jintao asking for help. “This,”
he says, “was a catalyst for last year’s
[$500m] currency swap agreement be-
tween the two countries.”
Cold War mindset?
Huang, listed by Forbes as China’s 161st
richest person, says he wishes to create
a deluxe resort attracting over 10.000
tourists to his Icelandic wilderness, and
plans to invest over 140 million Euros
in Grímsstaðir over the next four to five
years.
China’s Xinhua News Agency criti-
cised the international media for stir-
ring things up. Fu Shuangqi ran with
the headline “Cold War mindset behind
conspiracy theory on China’s over-
seas investment,” and suggested that
Huang’s investment is entirely private
and has nothing whatsoever to do with
the Chinese government.
The FT asked the question why
anyone—let alone a Chinese tycoon—
would be interested in procuring a “des-
olate area of north-east Iceland…less still
to invest another $100m in building a
luxury hotel and golf course,” and noted
that in a recent report for the European
Council on Foreign Relations, François
Godement and Jonas Parello-Plesner
indicated serious concerns regarding
China’s overseas investment policies.
“Crisis-hit Europe’s need for short-term
cash is allowing Chinese companies not
just to strike cut-price deals but also to
play off member states against each
other—replicating a strategy China has
already used in the developing world.”
Recent history
Talking to the AFP, Huang explained
that outside of the luxury hotel and golf-
ing complex, he planned to use ‘his land’
“to unite two [nature] reserves…[creat-
ing] Europe’s biggest nature reserve.”
Huang has stated on numerous occa-
sions that he will ensure that his little
slice of Icelandic nature will be treated
with utmost of respect and care both en-
vironmentally and culturally.
Although the Grímsstaðir landown-
ers have already signed a preliminary
contract with Huang’s company, the
Icelandic government has yet to approve
the project. Many Icelanders are firmly
against a deal whereby 0.3% of the
country—or, as stated by various me-
dia sources—the equivalent of the city
of Hamburg, the state of Missouri, or a
quarter of Hong Kong, might end up in
foreign hands. Iceland’s Minister of the
Interior, Ögmundur Jónasson told the
Independent: “it has not escaped my at-
tention that the Chinese have been very
active in buying Atlantic properties.”
Could this deal possibly undermine Ice-
landic sovereignty?
Unlikely says Ben Chu of the Indepen-
dent. As Chu points out, “Acquiring land
does not give foreign nationals a right to
do what they want with it...Meanwhile,”
he writes, “Iceland should note its recent
history: it’s often the investor, not the
recipient of the cash, that stands to lose
most when an ambitious deal is signed.”
Marc Vincenz
News | Iceland in the International Eye: September