Greenland's political autonomy, economy, and market entry considerations

Table of Contents
History 1
Geography 1
Economy 1
Population 1
GDP 2
Income 2
Natural resources 2
Industries 2
International trade data 2
Trade restrictions 3
Labor force, and how these may affect your proposed market entry 3
Legal and Political Environment 3
Culture 3
Technology 3
Infrastructure 3
References 3

Country Analysis Research Paper: Greenland
History
Greenland was colonized by Denmark up until 1953, when the Danish government chose to amend its constitution which resulted in Greenland having its status changed thereby becoming a constituency of the Danish Kingdom together with the Faroe Islands. Nonetheless, taking into consideration the fast-paced growth of globalization and modernization of the Greenlandic society, there is a significant growth in demand for increased political and economic autonomy. At the outset of 1979, a referendum centered on increase independence was held and the outcomes showed that 63 percent of the voters were in support of a Home Rule. Five months later, in May, there was the establishment of Greenland Home Rule. Importantly, at the turn of the century, the Greenlandic government set in motion the practice of assessing the Home-Rule covenant. This gave rise to the Self-Government Act of May 2008, as a result of which there was the undertaking of a national referendum in November 2008, with three quarters of the voters being in support of the Self-Government Act. On the 21st of June 2009, the Home Rule Government was supplanted by the Greenland Self-Government. It is imperative that in spite of its autonomy, different areas of Greenland continue to be under the jurisdiction of Denmark and these include justice affairs encompassing the courts of law, police and also criminal practices, national security and defense, civil right law, foreign affairs as well as the financial sectors and the monetary system (Government of Greenland, 2018).
Geography
Greenland is an independent nation of the Kingdom of Denmark and is situated to the eastern side of the Canadian Arctic Archipelago, which is positioned between the Arctic Ocean and the Atlantic Ocean. Despite the fact that Greenland is part of the North American continent from a geographical perspective, in a cultural sense, Greenland is progressively more associated with the European continent, especially Denmark and Norway. Imperatively, Greenland is deemed to be the 12th biggest country in the globe with regard to its area. However, the population of the country is presently 56,565 and therefore has a population density of 0.026 people per square kilometer. In this regard, Greenland is ranked as the 244th position in the world, which implies that it is one of the least densely populated nations in the world. Majority of the citizens in Greenland are situated and live in the fjords, which are in the southwestern part of the main island and where the climate is milder and more sustainable in terms of living (World Population Review, 2018). Geographically, the capital city of Greenland is Nuuk, which is also the biggest city of the nation. The city has a population of over 16,000 people. Imperatively, based on the population numbers, Nuuk is in fact one of the smallest capital cities across the globe. In addition, the capital city is the most northern capital in the globe. The other key cities in Greenland comprise of Sisimiut and Ilulissat with population of 6,000 people and 4,500 people respectively (World Population Review, 2018). The geography of Greenland brings about major challenges for businesses especially in terms of ease in movement and also with regard to exportation.
Economy
Greenland’s economy can be categorized as being small, mixed and also susceptible to market changes. The economy of the nation comprises of a major public sector and wide-ranging international trade. This has given rise to an economy with phases of strong and remarkable growth, substantial inflation, issues regarding unemployment and excessive reliance on capital inflow from Denmark, and externally, fundamentally skilled labor from Danish personnel.
Population
In 2018, the population of Greenland is estimated to be 56,565 people and is ranked as the 192nd most populated nation in the world. Majority of the population in Greenland subsist along the west coast in small towns and settlements. This is largely for the reason that despite having an area of more than 2 million square kilometers, only approximately 20 percent of this area is ice-free (Andersen, 2015).
GDP
Greenland is ranked as the 175th biggest economy in the globe. Gross Domestic Product (GDP) is delineated as a metric of a market value of all final goods and services manufactured and produced in a nation in a yearly period. In accordance to Trading Economics (2018), the Gross Domestic Product (GDP) of Greenland was US$ 2.70 billion in the 2016 fiscal year. The GDP value for the nation accounts for less than 0.01 percent of the entire global GDP. The GDP per capita for the nation is USD $43,364.88 (Trading Economics, 2018). It is imperative to point out that the GDP per capita for Greenland is relatively average as compared to European economies. Nonetheless, a key aspect to take into consideration is that the Greenlandic economy is critically reliant upon major support and backing from the Danish government, which supplies approximately 50 percent of the revenues, provides employment to more than 10,000 citizens in Greenland. Nevertheless, unemployment continues to be high, with the rest of the nation’s economy being reliant on demand for the exportation of shrimp and fish.
The diagram below illustrates the historical GDP for Greenland.

Figure 1: GDP Greenland

Figure 2: BNP per Capita, Purchasing Power, Greenland, and selected OECD countries, 2010
In making an assessment of material living standards, it is significant to distinguish two key aspects. First, there is the production outcome and the level of income it generates and secondly there is the income that is disposable to the population, which in simple terms is the summation of the income level created and the net transfers from abroad. These are termed as the Gross Domestic Product (GDP) and the Gross National Income (GNI) respectively. For numerous countries in the world, distinguishing these two aspects is not pivotal. However, in the case of Greenland, the difference is significant owing to the large transfers received from Denmark and the European Union as a whole. The diagram above illustrates both of these measures as compared to different nations. It is perceptible that Greenland is close to average income in the Organisation for Economic Co-operation and Development (OECD) region when making a comparison using the disposable GNI. However, it is also notable that Greenland is significantly below when making a comparison using the GDP per capita. This points out the fundamebtal problem that the Greenlandic economy is not self-sustaining in terms of supporting a living standard that is on the same level as Nordic countries or OECD (Andersen, 2015).
In general, the economy of Greenland is expanding. For instance, in the 2016 fiscal year, the economy of the country grew by 4.6 percentage points and it is expected that the economy will continue to expand at a more subdued rate. This indicates that the positive economic growth might facilitate business growth for market entry.
Income
Natural resources
Greenland is a country that is blessed with vast natural resources including gold, diamonds, coal, uranium, zinc, iron ore, platinum, tantalite, prospective oil and gas, fish, whales, and seals. These natural resources play an important role in the growth and development of the economy of Greenland. Of its total natural resources, the economy of Greenland significantly relies on the exportation of fish and shrimps. Notably, Fish represents more than 90 percent of its total exports. The downside to this is that the economy of Greenland is subject to fluctuations in world demand for fish and therefore susceptible to such changes.
Industries
1. Fisheries Industry
Fishing is the sustenance and primary industry of the economy of Greenland. The most profit-making and viable resources for the industry comprise of shrimps, Greenland halibut, and in recent times the reestablishment of cod. Greenland’s fishing sector comprises of approximately 850 vessels of different sized and there is an estimation of about 5,000 boats that are smaller in size. Greenland has the jurisdictive proficiency for the fisheries industry and the regulation of fishing in the nation is done through quotas and license regulation in terms of biological advice to make certain that there is the sustainable utilization of natural resources. The Total Allowable Catch (TAC) is fixed in agreement with the biological advice from the Greenland Institute of Natural Resources in addition to Northwest Atlantic Fisheries Organization (NAFO), North East Atlantic Fisheries Commission (NEAFC) and International Council for the Exploration of the Sea (ICES). The two largest corporations in Greenland in the fishing industry comprise of the private Polar Seafood Ltd. and the government owned Royal Greenland Ltd and comprise of numerous factories and corporations in dissimilar towns and in numerous nations in the European region. More importantly, Greenland has separate fishery covenants and treaties with the European Union, Norway, Faroe Islands and Russia (Government of Greenland, 2018).
2. Energy and Minerals Industries
It is significant for the economy of Greenland to seek alternative sources of income and attract international and foreign investment in order to increase the conventional hunting and fishing industries. Taking this into consideration, major endeavor has been positioned in the development and advancement of the energy and mineral resources industry. For instance, in the 2014 fiscal year, there were various auspicious mining opportunities that were established, making the nation one of the most exciting mining nations in the forthcoming years. Over 2 centuries of collecting and studying minerals in Greenland has resulted in the discovery of 75 different minerals including gold, diamonds, oil, rubies, olivine, coppers and marble. It is forecasted that the future will bring a prospect of the exploitation of the diamond, platinum and oil reserves. So as to become less reliant on the importation of oil, the nation has capitalized on its hydropower potential through the construction of different hydropower stations in Ilulissat, Nuuk, and Sisimiut, making electricity available to the towns (Government of Greenland, 2018).
3. Tourism
For the past two decades or so, Greenland has laid a significant emphasis on the tourism industry. In the present day, it is conceivable to travel to Greenland through Iceland, Canada, and Denmark. In fact, there has been the advancement of more cost-effective travel packages owing to the substantial increase in the annual number of tourists. The major advantage that Greenland has encompasses its beautiful and unblemished nature, which makes the nation considerably different and in its own manner exotic compared to other travelling destinations in the world (Government of Greenland, 2018).
4. Hunting and agricultural industries
Up until the outset of the 20th Century, the most important means of survival for the Greenlandic citizens was hunting for seals, whales as well as other sea mammals. In the present day, statistics indicate that just about 10 percent of the labor force in the nation has a direct or indirect involvement in the hunting industry. The key sources in this industry, especially in towns situated in the coastal region, are seals and large whales. However, there is regulation for such hunting through quotas levied by the International Whaling Committee (IWC) and solely individuals granted with licenses and sanctioned equipment are permitted to hunt whales. In addition, different species of seabirds, reindeers, oxen, hares and grouses are also hunted for the local market. Specifically, seals are hunted for purposes of their meat, which is a significant aspect of everyday diet in Greenland and the fur it utilized for the manufacturing of clothes and the national suit (Government of Greenland, 2018).
International trade data
In the 2016 fiscal year, the exports for Greenland amounted to $868 million, which signified that the company is ranked as the 156th biggest exporter in the world. Remarkably, in the past five year period, the nation’s exports have increased at a yearly rate of 4.7 percent. The top exports of the country include non-fillet frozen fish, which account for 35.2 percent of the total exports at a value of $305 million (Simoes, 2016). The second biggest export of Greenland is crustaceans, which represents 32.1 percent of the total exports at a value of $279 million. Other major exports include processed crustaceans, fish fillets, and fishing ships (Simoes, 2016). On the other hand, the import value of Greenland in the 2016 fiscal year amounted to $757 million, making the nation to be ranked as the 176th biggest importer globally. Between 2011 and 2016, the imports of the nation decline at a yearly rate of 5 percent. The biggest import of the nation is refined petroleum, which signified 10.9 percent of the total imports at a value of $82.5 million (Simoes, 2016). The second biggest import of the nation is fishing ships, which signify 8.95 percent of the total imports at a value of $67.8 million. Other key imports comprise of passenger and cargo ships, aircraft parts and cranes. This implies that Greenland has a positive trade balance of approximately $111 million (Simoes, 2016). This positive trade balance is favorable for market entry because the companies will be able to hire more workers, diminish employment and generate more income and also translates to a higher standard of living.
Labor force
In spite of the fact that the population of Greenland is not as high as in other nations, there is a ready labor force. However, one of the major problems in the business sector is that the labor force lacks both hands and skills. There are numerous reasons for the existing competency gap in the Greenlandic labor force with employers making demands for competencies and proficiencies that are not existent in the local labor force. This is linked to different factors including low level of education, the geographic and weather conditions of the region, social conditions as well as emigration of competent individuals to Denmark and the EU at large. Taking this into consideration, there is a significant need for external labor to sustain Greenland’s business life (Andersen, 2015). This might be a challenge for a firm making its entry into Greenland owing to the reason that a lack of a competent labor force could hamper attaining a competitive advantage to other rivals in the international market.
Legal and Political Environment
The Greenlandic legal system is interrogational. The law is categorized into public law and civil law. The former is further categorized into international law, constitutional law, criminal law, administrative law as well as procedural law. On the other hand, civil law facilitates the regulation of shared relations between citizens and between institutions and persons. On the political front, the government is headed by the Prime Minister. The nation is a self-governing overseas administrative division of Denmark and the government takes on the role of exercising executive power. In terms of legislation, such power is laid on the hands of the government and also the Greenlandic parliament whilst the judiciary is independent. Notably, the prevailing government of Greenland comprises of the Siumut who are social democrats, the Inuit Ataqatigiit whio are seperatists and socialists and the Atassut who are the conservative liberalists and unionists. Mr. Kim Kielsen from Siumut is the incumbent Premier (Government of Greenland, 2018). According to Breum (2016), the new unity government led by Kielson put an end to numerous years of harsh rivalry between the two major political movements in the nation. This unity has brought about political stability in Greenland. As a result of strong and stable political leadership, Greenland has a financially sustainable and globally competitive society. This political and legal climate is prime and suitable for any business trying to enter the market to conduct its operations.
Culture
Culture Greenlandic is the official language that is used in the island. Notably, the language is an Inuit vernacular that is dissimilar in different regions. That is, the Greenlandic dialects in the eastern and the western regions are dissimilar in a number of distinguished aspects. Greenlandic is deemed to be a language that is polysynthetic, in which conceptions as a whole are articulated or conveyed in a single word by the inclusion of prefixes and suffixes to a key subject and therefore creating words that are menacing for outsiders owing to their length when written down on paper. In fact, a number of foreigners who have lived in Greenland for several years continue to find difficulty in having a complete grasp on the language. Similarly, just about all Greenlandic citizens are able to speak the Danish language (Every Culture, 2018). Greenland is also overstocked in cultural symbols and slogans that mirror and echo the history and values of traditional Inuit communities. A significant number of these symbols have close ties to the environment as well as the natural world, which has sustained the Inuit populates for hundreds of years. The people of Greenland are friendly of temperament, although more constrained in their social interactions as compared to most Westerners. The Greenlanders’ strong sense of etiquette is directed by customary Inuit beliefs and customs. In general, culture of the Greenlanders is welcoming to foreigners, in the expectation that their customs will be respected (Every Culture, 2018).
Technology
Greenland has high level of technology. Remarkably, 98 percent of the population in the nation capitalizes on advanced and cutting-edge digital technology telecommunication services. What is more, owing to Royal Greenland, the nation is ranked as being the biggest supplier of cold-water prawns in the world, and as a result has wide-ranging experience of innovative product development, sustainable production as well as efficacious distribution of quality products. Technology wise, Greenland has made the most of its ice sheet in the contemporary to facilitate the production of Greenlandic beer in addition to ice and water for export purposes (The Government of Greenland, 2018). There continues to be advancement of technology in Greenland and the population continues to embrace such progressions. It is expected that the high technology levels in the country will be suitable in facilitating successful business operations in firms that enter the market.
Infrastructure
The transport infrastructure contained in Greenland is very uncommon in the sense that the nation does not have railways, lacks any sort of waterways inland and also lacks roads that interconnect towns. Greenland as a whole has 150 kilometers of roads, of which 60 kilometers comprise of paved roads. The nation does not have any highways. For a long time now, the key means of transportation in Greenland has been via boat around the coastal region during the summer periods and via dog sleds during the winter period in the eastern and northern regions. There are ports situated at Ilulissat, Kangerlussuaq, Qaqortoq, Nuuk, Sisimiut, Narsaq and Aasiaat (Northern Territories Water & Waste Association, 2017). Numerous other towns in the nation also have small ports. In terms of air transportation, Air Greenland is the only carrier that conducts operations within Greenland. The corporation has just about 30 fleets including an Airbus jet, 7 aircrafts and 21 helicopters. It is imperative to note that the significant fleet of helicopters is imperative owing to the reason that solely 18 out of the total of 75 communities in Greenland have runways. The airport situated at Nuuk is not the biggest or most modern air terminal in the nation. Rather, it is in fact the air terminal that is situated at Kangerlussuaq that is the biggest and most modern. This airport is located 130 kilometers inland from the cost, which is a region that is less susceptible to the harsh coastal weather. There is an everyday flight that leaves for Copenhagen and majority of the flights that move within Greenland also pass through this particular airport (Northern Territories Water & Waste Association, 2017). This indicates that for a business entering the Greenlandic market, distribution of products from one town to another will be significantly challenging owing to the lack of efficient transport infrastructure.




References
Andersen, T. M. (2015). The Greenlandic Economy–Structure and Prospects. Economics Working Papers, 14.
Breum, M. (2016). Independence and stability are top priorities for Greenland’s new government. Arctic Today. Retrieved from: https://www.arctictoday.com/independence-and-stability-are-top-priorities-for-greenlands-new-government/
Every Culture. (2018). Greenland. Retrieved from: https://www.everyculture.com/Ge-It/Greenland.html
Government of Greenland. (2018). Economy and Industry in Greenland. Retrieved from: https://naalakkersuisut.gl/en/About-government-of-greenland/About-Greenland/Economy-and-Industry-in-Greenland
Northern Territories Water & Waste Association. (2017). Greenland Infrastructure. Journal of the Northern Territories Water and Waste Association. Retrieved from: http://ntwwa.com/wp-content/uploads/2018/03/NTWWA_Journal_2017.pdf
Simoes, A. (2016). Greenland. OEC. Retrieved from: https://atlas.media.mit.edu/en/profile/country/grl/
Trading Economics. (2018). Greenland GDP. Retrieved from: https://tradingeconomics.com/greenland/gdp
World Population Review. (2018). Greenland 2018. Retrieved from: http://worldpopulationreview.com/countries/greenland-population/