Greenlandic premier calls for Danish investment

Denmark is being called upon to reinforce its stake in the semi-autonomous Arctic territory by investing in developing its mineral wealth

November 20th, 2012 7:25 pm| by admin
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Greenland’s premier, Kuupik Kleist, has called on Denmark to invest in developing his country's mineral resources.

In a lengthy op-ed in Politiken newspaper today, Kleist argued it would be a shame if Denmark did not invest in the next stage of Greenland’s development, considering their long shared history.

“The alliance between Denmark and Greenland has been incredibly beneficial for both," Kleist wrote. "Isn't it about time that we, after 300 years of history […] openly declare the love and mutual esteem we have for one another?"

Kleist’s appeal to Denmark and Greenland’s shared heritage arrives after China promised 12 billion kroner of investment for a future iron mine in Greenland. With more mines set to proceed in the coming years, Kleist proposes that Denmark and Greenland establish a commission to examine ways for Denmark to increase its investment in Greenland and ensure that Denmark maintains its prominent position in the semi-autonomous Arctic territory.

In response, PM Helle Thorning-Schmidt (Socialdemokraterne) said the proposal sounded like a good idea.

“If the Self-Rule administration wants to strengthen the co-operation between Denmark and Greenland in the resources field, the government is naturally open to discuss it,” Thorning-Schmidt told Politiken.

Greenland is far from financially self-sufficient and half of the Self-Rule administrations revenue is derived from an annual 3.5 billion kroner block grant from Copenhagen.

Greenland is hiding billions of kroner of wealth underneath its soil, however, and tax revenues from the mining of gold, aluminium and iron, among other resources, could be the potential saviour to Greenland's economic troubles.

But in an op-ed in Berlingske newspaper, Torben M Andersen and Ulla Lynge, members of Greenland's economic advisory council, Grønlands Økonomiske Råd, wrote that there is a long way to go before the revenue derived from mining transforms the country.

“It is sometimes claimed that the resource projects will automatically create a strong and self-sufficient economy, increased welfare and healthy public finances,” they wrote. “But international experience shows that the beneficial effects will only be realised if the exploitation of natural resources results in increased employment, and that alone is a great challenge.”

They added that only 55 percent of students finish upper secondary school, meaning many do not have the necessary qualifications to get a job associated with the resource projects. So without increased investment in education, it is unlikely that Greenlanders would truly benefit from the mines.

“A higher and more qualified workforce will translate into increase employment,” Andersen and Lynge wrote. “This in turn will contribute to improving public finances and increasing welfare.”

But without foreign investment, these projects will not go ahead. Despite interest from China, Kleist wants to ensure that Copenhagen maintains a stake in Greenland and its new industrial future.

“We suggest that experts on Greenland’s environmental and social conditions get together as soon as possible to discuss the possibilities more closely, and by next summer make suggestions to both the Greenlandic Self-Rule administration and Danish government  about concrete steps Greenland and Denmark can jointly make to ensure a socially beneficial exploitation of Greenland’s natural resources,” Kleist wrote.

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