The Danish Bloktilskudet – the annual contribution that constitutes one third of the Greenlandic state budget, is used for bureaucracy and social functions. This is something that Javier Arnaut, head of Arctic political science and economics at Greenland University, believes is ineffective if you want to develop the economy.
And that the economy is developing is absolutely crucial for the island to become more independent in the future.
– This type of grant creates a vicious circle that is not productive if you want to generate new opportunities. This does not mean that you have to stop the grant, but it must be used in a different way.
Live almost entirely on fishing
The discussion about Greenland’s independence often leads to questions about economics. Arnaut points out that many experts believe that Greenland needs political independence in order for the economy to develop.
– It is thought that Greenland could link trade agreements that can contribute to the fishing industry and open up new sources of income that could cover for the Danish grant.
At present, fishing is just over 90 percent of the country’s export income, which makes the country vulnerable to global changes.
– There is a need to spend money on new activities that generate new financial opportunities, says Arnaut.
The consequences of modernization
The G50 and G60 were two modernization plans for Greenland during the mid-20th century, initiated by the Danish government. The plans focused, among other things, on a transition from a traditional self -catering to industrial economics.
– The Danish state began to inject money in the country with the idea that private actors would also contribute to the economy, but that was not the case, for most reasons, says Arnaut.
He believes that the large distances, lack of labor and high capital costs have made it risky to invest.
– They try to diversify the economy in the same way as during the modernization period, but the risk factors exist.
New opportunities
The capital Nuuk’s new international airport is expected to open up new opportunities for tourism in the country and the city needs to adapt to the tourist wave.
– The most important thing now is that there are new sources to income and the tourism industry paves the way for just that.