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Greenland

Greenland, the world's largest island, is about 81% ice-capped. Greenland is in the Danish Kingdom, which benefits Greenland to the tune of about $500 million per year. In 2008, Greenland held a referendum on its autonomy. As a result, Denmark recognized Greenlands right to increased home rule, and the country's official language was changed from Danish to Greenlandic in June 2009. However the Greenlanders want independence and are moving deliberately in that direction.

Greenland has a population of about 55,000, larger than #213 Liechtenstein at 36,713, #214 San Marino at 32,140, #217 Monaco at 30,510, or #225 Tuvalu and #226 Nauru, tied for last place among sovereign "states" with about 10,000 citizens apiece.

One day, Greenlands economy may benefit from its mineral riches (among others, it has the third largest deposit of uranium in the world), which has drawn increased interest from large multinationals. However, for the time being, this Arctic territory is highly dependent on subsidies from Copenhagen, which supplies more than half of its budget.

Vikings reached the island in the 10th century from Iceland; Danish colonization began in the 18th century, and Greenland was made an integral part of Denmark in 1953. It joined the European Community (now the EU) with Denmark in 1973, but withdrew in 1985 over a dispute centered on stringent fishing quotas. Greenland was granted self-government in 1979 by the Danish parliament; the law went into effect the following year.

Politically, the Greenland Home Rule Government has sought increasing autonomy since the acquisition of home rule in 1979. In May 2003, the Danish and Greenland Home Rule governments reached agreement on a set of power-sharing principles on Greenland's involvement in Danish foreign and security policy. The so-called Itilleq Declaration provides that Greenland will have foreign policy involvement with a view toward having equal status on questions of concern to both Denmark and Greenland.

A Danish-Greenlandic Commission, established in 2005 with the aim of preparing measures that would grant Greenland additional autonomy, issued its recommendations in early 2008 and set the conditions for a new legal framework, "Self Rule," between Greenland and Denmark. The Self Rule agreement was overwhelmingly approved by Greenlandic voters in a referendum in November 2008 and was passed by the Danish parliament; it entered into effect on the 30th anniversary of Greenlandic Home Rule in June 2009. The new Self Rule agreement allows for the transfer of additional authorities, such as justice and police affairs, to Greenland's government as it is able to assume financial responsibility for these new portfolios. The Self Rule agreement also provides formal international legal recognition to the Greenlanders as a people under international law, and provides a formula for division of potential oil and gas revenues between Denmark and Greenland.

Greenland has various formal connections with other parts of the world. Greenland is an independent member of the Nordic Council. Special cooperation with Iceland and the Faroe Islands is organised through the Nordic Atlantic Cooperation and the West Nordic Foundation. Greenland withdrew from the European Union in 1985, thereafter basing its relations with the EU on a special agreement. In 2006 Greenland and the EU agreed on a comprehensive partnership for the sustainable development of Greenland. The Partnership Agreement is a political declaration stating the parties' intentions to continue and expand their cooperation within various areas. As a result of regional cooperation regarding environmental issues (The Finnish Initiative), the eight countries in the Arctic, ie Russia, Canada, USA, Iceland, Denmark/Greenland, Sweden, Norway and Finland, founded the Arctic Council in 1996.

The public sector, including publicly owned enterprises and the municipalities, plays the dominant role in Greenland's economy. A large part of government revenues comes from Danish Government grants, 57% in 2009, an important supplement of GDP. The global economic slowdown is affecting Greenland as well, and a contraction of 2% of GDP is expected for 2009. The surpluses in the public budget between 2002 and 2005 were turned to a deficit of $40 million in 2007 and 2008, and unemployment is on the rise after an extended period from 2003 onward with lower unemployment.

The Greenlandic economy increased by an average of 3% to 4% annually between 1993 and 2001, the result of increasing catches and exports of shrimp, Greenland halibut, and, more recently, crabs. However, it was not until 1999 that the economy had fully recovered from an economic downturn in the early 1990s. During the last decade the Greenland Home Rule Government (GHRG) has pursued a fiscal policy with mostly small budget surpluses and low inflation, but increased public pressure for improved public services in the form of better schools, health care, and retirement schemes have strained the public budget. The GHRG has taken initiatives to increase the labor force and thus employment by, among other things, raising the retirement age from 60 to 63 years. The average unemployment rate for 2008 was 4.5%. Structural reforms are still needed in order to create a broader business base and economic growth through more efficient use of existing resources in both the public and the private sector.

Due to its continued dependence on exports of fish, 85% of goods exports, Greenland's economy remains very sensitive to foreign developments. Greenland has registered a foreign trade deficit since the closure of the last remaining lead and zinc mine in 1989, though international interest in Greenland's mineral wealth is increasing. The trade deficit reached 12% of GDP in 2007. International consortia are also increasingly active in exploring for hydrocarbon resources off Greenland's western coast, and there are international studies indicating the potential of oil and gas fields in northern and northeastern Greenland. The U.S. aluminum producer Alcoa in May 2007 concluded a memorandum of understanding with the Greenland Home Rule Government to build an aluminum smelter and associated power generation facility in Greenland to take advantage of abundant hydropower potential. Tourism also offers another avenue of economic growth for Greenland, with increasing numbers of cruise lines now operating in Greenland's western and southern waters during the peak summer tourism season.

The autonomous region has undeveloped mineral and petroleum resources; exploration activities for both were picking up in 2004. Some Canadian mining companies were active in exploring for diamond and gold, and as a result, a gold deposit was being developed and mined in South Greenland. Skaergaard Minerals Corp., which is 100% owned by Galahad Gold plc of the United Kingdom, planned to develop the gold-palladium-platinum deposit at Skaergaard in eastern Greenland. The inferred mineral resource contained 1.09 million kilograms of palladium, 339,000 kilograms (kg) of gold, and 93,300 kg of platinum with substantial accessory metals, such as titanium and vanadium.






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