The Svalbard archipelago: an exploratory analysis of port investment in the context of the new arctic routes

Abstract

The Svalbard archipelago, located in the Arctic Ocean, is administered by Norway through the 1920 Svalbard Treaty. There is a dearth of research investigating Svalbard’s economic development and associated political challenges. Due to its strategic location, the increasing activities of oil/gas exploration development and the possibilities of new routes to and from Europe and Asia using the Arctic passage, Svalbard represent a new potential development area within a new efficient transport route. The aim of this paper is to investigate Svalbard’s port development strategy. We explore this in three steps: what currently exists at Svalbard in terms of trade, traffic, infrastructure, and governance; what are future plans; and what are the possibilities. We address these issues with the support of the OLI (ownership-location-internalization) paradigm that works as a framework analysis to four main drivers of FDI (foreign direct investment) attraction: resources, market, efficiencies, and location. This is exploratory case study research using archival data from the Port of Longyearbyen Authority, Governor’s Office, and Longyearbyen Community Council. The findings indicate that the strategic plan for port development at Svalbard should emphasize their location to attract investment. Further research is required to address the institutional environment and other legal aspects.