Greenland - Economy

Economy

Greenland today is dependent on fishing and fish exports. The shrimp fishing industry is by far the largest income earner. Despite resumption of several hydrocarbon and mineral exploration activities, it will take several years before hydrocarbon production can materialize. The state oil company NUNAOIL was created in order to help develop the hydrocarbon industry in Greenland. The state company Nunamineral has been launched on the Copenhagen Stock Exchange to raise more capital to increase the production of gold, started in 2007.

Mining of ruby deposits began in 2007. Other mineral prospects are improving as prices are increasing. These include iron, uranium, aluminium, nickel, platinum, tungsten, titanium, and copper.

In a few years, there could be several major mining projects in Greenland. There are also plans to build a large aluminium smelter. With a workforce of no more than 30,000 people, it is expected that much of the labour needed will be imported.

The public sector, including publicly owned enterprises and the municipalities, plays a dominant role in Greenland's economy. About half the government revenues come from grants from the Danish government, an important supplement to the gross domestic product (GDP). Gross domestic product per capita is equivalent to that of the average economies of Europe.

Greenland suffered an economic contraction in the early 1990s. But, since 1993, the economy has improved. The Greenland Home Rule Government (GHRG) has pursued a tight fiscal policy since the late 1980s, which has helped create surpluses in the public budget and low inflation. Since 1990, Greenland has registered a foreign trade deficit following the closure of the last remaining lead and zinc mine that year. More recently, new sources of ruby in Greenland have been discovered, promising to bring new industry and a new export to the country. (See Gemstone industry in Greenland).