Greenland’s Economy Faces Challenges Amidst Mineral Resource Boom
Nuuk, Greenland - A Host of Challenges Ahead
The Arctic island nation of Greenland is facing a multitude of challenges as it seeks to capitalize on its rich mineral resources, according to government officials. Despite efforts to license and inspect mining projects, the sector still faces significant hurdles.
Challenges in the Mineral Resource Sector
- Need for a qualified labor force
- Increased institutional capacity for inspection and supervision
The Ministry of Industry and Mineral Resources is responsible for licensing and technical inspections, while the Environmental Agency for Mineral Resource Activities under the Ministry of Nature and Environment handles environmental issues related to mining projects. Social impact assessments, environmental impact assessments, and impact benefit agreements are also prepared in conjunction with applications for mineral resource projects.
Tourism Industry Struggles for Growth
- Current Tourism Strategy covers 2012-2015
- Emphasis on short-term growth in the sector
- Benchmark analysis found that taxes and duties on cruise tourism passenger fees and airport duties are a barrier to development
The government has proposed reforms to improve the competitiveness of the sector and is working to improve tourism statistics to facilitate better monitoring and planning. The national tourism council (Visit Greenland) has also been allocated EUR 2.1 million for promotion, concept development, and analysis within the sector.
Infrastructure Challenges Ahead
- Lack of roads connecting towns
- Reliance on air or ship traffic for transportation between them
The government is currently working on a proposition to reform the tax and duty structure on ship and air traffic in an effort to address these challenges.
Climate and Energy Challenges
- Heavily reliant on imported fossil fuels for energy needs
- Vulnerable to fluctuations in global fuel prices
The government has announced plans to reduce the country’s reliance on fossil fuels and increase its use of renewable energy sources, such as wind and hydro power.
Conclusion
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Greenland faces significant economic and infrastructure challenges as it seeks to capitalize on its mineral resources and grow its tourism industry. However, with careful planning and investment, the country may be able to overcome these challenges and achieve sustainable growth and development.