Prospects for Greenland's economic autonomy

Abstract

In 2019, the attention of the world community to Greenland increased significantly after US President Donald Trump offered to buy the island. Although the proposal was immediately rejected, it caused a rethinking of Greenland’s importance in the Arctic international relations system. Greenland’s government also felt the growth of attention, which took a sharper course towards independence from Denmark. The author intends to explore whether Greenland has the economic basis for being an independent state. Thus, the current state of the key export sectors of its economy (fishing, mining and tourism) was analyzed. As is shown, having a negative trade balance Greenland is deeply dependent on Danish financial support which equals 78% of export revenues, up to 50% of the local budget and 20% of GDP. Moreover, Denmark is the main trade partner of Greenland. The paper also considers the main factors pushing Greenlanders to gain independence from Denmark - resentment for the colonial period of their joint history and the economic advantages of free disposal of the island’s territory and its resources. The intent to become independent is largely fueled by U.S.-China competition for influence on Greenland, as both countries are attracted by the island’s geostrategic location and its resources, including rare earth minerals and uranium. The analysis of key export sectors development prospects demonstrates that by modernizing its seafood industry, putting into operation new tourism infrastructure and implementing ongoing mining projects Greenland could receive funds in an amount sufficient to replace Denmark’s financial support. However, this will require time, foreign investment and, most importantly, consistent policy for working with foreign companies, which Greenland lacks currently.