40M KR. MORE IN CRISIS AID FOR SVALBARD: Parliament approves increase in general fund allocation for archipelago, intended to help tourism companies hurt by COVID-19


The latest and perhaps simplest of several emergency measures intended to help Svalbard cope with the financial impacts of the COVID-19 pandemic was approved by Parliament on Tuesday, which provided 40 million kroner intended to help the decimated tourism industry by increasing the general fund allocation for the archipelago in this year’s national budget by about 10 percent.

The measure initiated by local Progress Party members boosts Svalbard’s budget from about 378 million kroner to 412 million kroner. While the allocation can be used for a variety of general expenses, the language in the measure clearly specifies the intent.

“Tourism in Svalbard during the pandemic has been subject to strict restrictions in terms of periodic quarantines, reduced demand for occupancy in hotels, stops in cruise traffic, mandates for negative COVID-19 tests and a national advisory to avoid unnecessary travels to Svalbard,” the measure states. “Reduced health emergency services in Svalbard indicates that there may be a need to maintain restrictions in the future as well.”

“The consequence of this is that tourism Longyearbyen has been severely affected and Visit Svalbard shows that a representative selection of local businesses has had an average revenue drop of 65 percent during the pandemic.”

Svalbard remains one of fewer than 10 “countries” as classified by the World Health Organization with no diagnosed COVID-19 cases, due largely to the extra-intense restrictions imposed by the government.

But the crackdown also means Longyearbyen is suffering the worst economic impacts due to the virus of any municipality in Norway. Those impacts are mostly and disproportionately affecting the tourism/retail/service industries, as well as foreigners who represent about one-third of the population and are generally ineligible for unemployment and insurance benefits offered to Norwegians.

Several Svalbard crisis measures have already been approved by Norway’s government since the pandemic began a year ago, including a 25-million-kroner allocation for new “transitionary” tourism ventures, 39 million kroner for infrastructure projects in Longyearbyen and Ny-Ålesund done by entities hurt by the crisis, subsidizing daily airline passenger flights as carriers were cancelling most of their routes, a short-term living expenses fund for laid-off foreigners available last spring, and and a travel grant program to pay for foreigners to return to their homelands offered last fall.

Some local officials and residents have complained about aspects of previous assistance measures, such providing inadequate funding, being approved only after long delays or being designated in way that kept many of those hurt by the pandemic from benefitting. Similar questions were raised after Parliament approved the extra 40 million on Tuesday.

“Are we sure there won’t be bureaucratic obstacles in the way, so that the money gets where it’s going, quickly?” Ronny Brunvoll, director of Visit Svalbard, wrote in an online response to an announcement about the allocation. For example, it doesn’t require restructuring, a master of application writing and (delayed) distribution in autumn 2021?”

Bengt Rune Strifeldt, the Progress Party member who presented the measure to Parliament, stated in a reply the simplicity of the measure that merely increases general budget funds means none of the concerns about “targeted” aid should apply.

“This budget item is disposed of by the local government in Svalbard and will be able to be disposed of within a reasonably short time,” he wrote. “I can’t see any easier way to do this.”

Still, some local leaders say even if the additional funds helps some who are struggling to survive the effects of the pandemic for the short term, there are more serious economic concerns on a larger scale for the long-term.

“The pandemic effect on tourism can turn around for the better fairly quickly, but we must not forget that we have just lost all the industrial mining activity in Svea,” Terje Aunevik, a Longyearbyen Community Council member and head of the Svalbard Businesses Association, told Svalbardposten on Tuesday.

The dismantling of all infrastructure at Svea and the nearby Lunckefjell mine are providing a substantial number of jobs during a period of a few years, but those will end abruptly – as may the last active coal mining at Mine 7 due to accelerated plans for a new power plant within a few years,

“That will affect far more than the approximately 50 direct man-years in the mine,” Aunevik told the newspaper. And while there is considerable construction activity such as new homes to replace those declared unsafe in avalanche zones and the large-scale expansion of Svalbardbutikken, “in the long run we can not make a living constantly from new construction projects.”