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Economy of Greenland and business opportunities

Economy of Greenland

The economy of Greenland can be characterized as small, mixed and vulnerable. Greenland's economy consists of a big public sector and comprehensive foreign trade, which has resulted in an economy with periods of strong growth, considerable inflation, unemployment problems and extreme dependence on capital inflow from Denmark and use of outside, mainly Danish, skilled labor.

GDP per capita is similar to the average European economies but the economy is critically dependent upon substantial support from the Danish government, which supplies about half the revenues of the home rule government who in turn employ about 8,000 Greenlanders out of a labor force of 40,156 (Jan. 2012). Unemployment nonetheless remains high, with the rest of the economy dependent upon demand for exports of shrimp and fish.

Sectors

Governance

The largest employers in Greenland are the various levels of administration, including the central government in Denmark, the Greenland Home Rule Government, and the municipalities. Most of these positions are in the capital Nuuk. In addition to this direct employment, the government heavily subsidizes other major employers in other areas of the economy, including Great Greenland's sealskin purchases, Pilersuisoq's rural stores, and some of Air Greenland and Royal Arctic's regional routes.

Fishing industry

The second-largest sector by employment is Greenland's fishing industry. The commercial fishing fleet consists of approximately 5,000 dinghies, 300 cutters, and 25 trawlers. While cod was formerly the main catch, today the industry centers on cold-water shrimp and Greenland halibut.

The fish processing industry is almost entirely centered on Royal Greenland, the world's largest retailer of cold-water shrimp.

Hunting and whaling

Whaling and seal hunting were once traditional mainstays of Greenland's economy. Greenlanders still kill an estimated 170,000 seals a year and 175 whales a year, ranking them second and third in the world respectively. Both whaling and sealing have become controversial, limiting the potential market for their products. As such, the only seal tannery in the country - Great Greenland inQaqortoq - is heavily subsidized by the government to maintain the livelihood of smaller communities which are economically dependent on the hunt.

Reindeer or caribou are found in the northwest of the island, while muskoxen are found in the northeast and at Kangerlussuaq. Because the muskoxen's natural range favors the protected Northeast Greenland National Park, it is a less common object of hunting than in the past. Polar bear and reindeer hunting in Greenland still occur but are regulated to avoid endangering the populations.

Retail

Approximately half of total sales are conducted by KNI, the state-owned successor to the Royal Greenland Trade Department; its rural sales division Pilersuisoq; or its daughter company - which has been purchased by the Danish Dagrofa - Pisiffik. The third major chain is the Brugsen association of cooperatives.

Mining

Ivigtut used to be the world's premier source of natural cryolite, an important mineral in aluminum extraction, but the commercially viable reserves were depleted in the 1980s. Similarly, deposits of coal, diamonds, and many metals - including silver, nickel, platinum, copper, molybdenum, iron, niobium, tantalum, uranium, and rare earths - are known to exist, but not yet in commercially viable deposits. Greenland's Bureau of Minerals and Petroleum is working to promote Greenland as an attractive destination for prospectors. Improvements in technology and increases in mineral prices have led to some mines being reopened, such as the lead and zinc mine at Maarmorilik and the gold mine at Nalunaq.

Greenland is expected to be one of the world's next great mining frontiers as global warming starts to uncover precious metals from the frozen surroundings. Substantial volumes of minerals are now within reach of geological land mapping technologies, according to research conducted by GlobalData, a natural resources business intelligence provider.

Energy

While the Greenland Home Rule Government has primary sovereignty over mineral deposits on the mainland,[18] oil resources are within the domain of the Danish exclusive economic zone. Nonetheless, prospecting takes place under the auspices of NUNAOIL, a partnership between the two governments. Greenland is believed by some geologists to have some of the world's largest remaining oil resources: in 2001, the U.S. Geological Survey found that the waters off north-eastern Greenland (north and south of the arctic circle) could contain up to 110 billion barrels (17×109 m3) of oil and, in 2010, the British petrochemical company Cairns Oil reported "the first firm indications" of commercially viable oil deposits. Nonetheless, all six wells drilled since the 1970s have been dry.

Greenland has offered eight license blocks for tender along its west coast by Baffin Bay. Seven of those blocks have been bid for by a combination of multinational oil companies and NUNAOIL. Companies that have participated successfully in the previous license rounds and have formed a partnership for the licenses with NUNAOIL are DONG Energy, Chevron, ExxonMobil, Husky Energy, andCairn Energy. The area available known as the West Disko licensing round is of an interest due to its relative accessibility compared to other Arctic basins as the area remains largely free of ice and a number of promising geological leads and prospects from the Paleocene era.

Tourism

Tourism is limited by the short summers and high costs. Access is almost by air only, mainly from Denmark and Iceland. Some tourists arrive by cruise ship (but they don't spend much locally, since the ship provides accommodation and meals). There have been tests with direct flights from the US East Coast from 2007 to 2008, but these were discontinued. The state-owned tourism agency Visit Greenland has the web address Greenland.com.

Agriculture and forestry

Agriculture is of little importance in the economy but climate change - in southern Greenland, the growing season averages about three weeks longer than a decade ago - has enabled expanded production of existing crops. At present, local production accounts for 10% of potatoes consumption in Greenland, but that is projected to grow to 15% by 2020. Similarly, it has enabled new crops like apples, strawberries, broccoli, cauliflower, cabbage, and carrots to be grown and for the cultivated areas of the country to be extended although even now only about 1% of Greenland is considered arable. Expanded production is subsidized by the government through purchase guarantees by the state-owned Neqi A/S grocery store chain.

The only forest in Greenland is in the Qinngua Valley near Nanortalik. It is protected and not used for forestry.

This article is licensed under the GNU Free Documentation License. It uses material from the Wikipedia article "Economy Of Greenland"

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Summary:

Expansion Of Buksefjorden Hydroelectric Power Plant, Greenland - Market Dialogue

Country:

Greenland

Notice Type:

Procurement Plan

Deadline:

25 Apr 2024

Posting Date:

26 Apr 2023

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