This post was originally published on on December 3, 2014.

On November 28th, 2014, Greenland held parliamentary elections 18 months ahead of schedule after Prime Minister Aleqa Hammond resigned in the wake of allegations regarding the misuse of public funds. Greenland, the world’s largest non-continental island, is growing increasingly important geopolitically, the melting Arctic ice fueling fantasies of vast unexplored mineral, gas and oil reserves. In this context, it is not surprising that many superpowers and international corporations are closely monitoring the election outcome and general political stability of the island.

Led by Kim Kielsen, the Siumut Party, which has been in power since 1979 with the exception of one term, tied the opposition party led by Sara Olsvig, Inuit Ataqatigiit, with 11 out of the total 31 seats. It is expected, however, that the Siumut Party will lead the coalition as it won more votes overall. The three smaller parties, who won 2-4 seats each in the Greenlandic parliament Inatsisartut, have yet to clearly express where their support lies. This means that what the new ruling coalition will look like is still up in the air. Greenland, the least densely populated country on earth, currently has approximately 40,000 citizens eligible to vote, and yesterday’s election produced a 70% turnout rate.

Greenland’s current political challenges are greatly influenced by centuries of foreign intervention. It officially became a Danish colony in 1814 and since WWII more power has been devolved to it, with home rule and a parliament being introduced in 1979. In 2008 Greenlanders voted in favor of the Self-Government Act, giving Greenland significantly more autonomy. The new political structure began the gradual transfer of power from the Danish government to the local Greenlandic government in key areas such as mineral resource activities, aviation, policing, border control, and the judicial system.

Defense, foreign affairs, and monetary policy, however, remain under the control of the Danish government, which provides an annual subsidy of DKK 3.6 billion (US$602 million) that is slated to be gradually reduced as Greenland’s economy strengthens. These Danish block grants remain substantial, however; combined with a number of small reimbursements and subsidies from the EU, they currently account for 35% of Greenland’s gross domestic product.

As global warming melts the Arctic ice, countries interested in natural resource extraction have grown increasingly interested in Greenland. Australian and Canadian companies, some with Chinese contractors, have already started mining various minerals. In the general election of 2013, the extraction of Greenland’s energy and mineral resources was promoted as the key path to economic self-sufficiency and ultimately political independence from Denmark. Yet, less than a year and a half later, a new election was called after revelations last month that former premier Aleqa Hammond, of the ruling Siumut Party, had spent approx. DKK 106,000 (US$17,707) in public funds on personal goods.

Greenland’s democracy faces various challenges unique to the island. First of all, the vast geography of the country means that it is impossible to provide even basic services without massive public expenditures. This means that actions taken by politicians are inevitably intertwined with the country’s economy. Secondly, with a small and geographically isolated population, it is nearly impossible to fill political positions with qualified people who do not have close social and familial relations. This necessitates robust democratic checks and balances, a strong opposition, and an active civil society as safeguards to overreach and corruption.

Additionally, the euphoria surrounding natural resource extraction has been gradually tempered over the past year. Though it will likely be an essential part of Greenland’s future economic growth, there has been a realization that the country can count on neither quick profits nor quick independence from Denmark. Hope was further dampened when, less than 48 hours before the election, acting Finance Minister Vittus Qujaukitsoq was forced to provide the latest financial figures that revealed a far larger public deficit for 2014 than previously thought—approximately DKK 275 million (US$46 million) for 2014 instead of the expected DKK 21 million (US$3.5 million) budget surplus. This budget deficit means that both parties will have a hard time delivering on their campaign promises. They will also need to develop a plan B for the Greenlandic economy, including the fishing and tourist industries as potential sources of growth.

Despite these looming challenges, it seems clear that Greenland, in the long term, is on the path to independence from Denmark. Yet if the key to the requisite economic independence ends up being natural resource exploitation, Greenland will have to navigate the complex and unequal landscape of working with powerful multinational corporations and governments that are keenly tracking developments in the Arctic region. In its push to rid itself of Danish rule, Greenland must take care to avoid falling under the influence of these varied and opportunistic actors.