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Political and Economic Report 2019 Aningaasaqarnikkut Ingerlatsineq Pillugu Nalunaarut 2019 Politisk Økonomisk Beretning 2019 Engelsk Overskrift 2018

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Political and Economic Report 2019 Aningaasaqarnikkut Ingerlatsineq Pillugu Nalunaarut 2019 Politisk Økonomisk Beretning 2019 Engelsk Overskrift 2018 Political and Economic Report 2019 Economic and Political Political and Economic Report 2019 Aningaasaqarnermut Naalakkersuisoqarfik - Departementet for Finanser - Ministry of Finance Aningaasaqarnikkut ingerlatsineq pillugu nalunaarut 2019 Politisk Økonomisk beretning 2019 Engelsk overskrift 2018 Suliarineqarnera naammassivoq Maj 2019 Redaktion sluttet i maj 2019 Editors ended in may 2019 Ungalua – Omslag – Cover.: Orla Dalager, N Offset, 3900 Nuuk Naqinneqarfia – Tryk - Print.: N Offset, Nuuk Aningaasaqarnermut Naalakkersuisoqarfik Departementet for Finanser Ministry of Finance P.O. Box 1037 3900 Nuuk Oq./Tel.: +299 34 64 02 [email protected] www.naalakkersuisut.gl Ministry of Finance Political and Economic Report 2019 Spring Session 2019 /10 1 In accordance with Greenland Parliament Act no. 26 of 28 November 2016 on the Budgets and Accounts of the Municipalities and the Greenland Government Authorities, the Government of Greenland presents an annual report on the economy of Greenland, including trends in public expenditure and revenues at Parliament's Spring Sessions. The annual report must include analyses of developments within the economy and activities within one or more key areas of expenditure and revenues. The report will thus contribute to increasing information on the finances of the Greenland Government Authorities, and provide the basis for an informed debate on the financial performance of the Greenland Government Authorities and Greenland as a whole. As such, the report covers many issues and takes a form that can be incorporated into the deliberations of the Government of Greenland and Parliament for economic development and priority-setting. The report highlights special problem areas and trends. The Government of Greenland's present Political and Economic Report for 2019 should thus also be seen in the context of its work on the 2020 Budget Act Bill. 2 1 Foreword The annual Political and Economic Report reviews a number of the most important initiatives that the Government of Greenland plans to launch within the year it covers, and in future years. The 2019 report describes the current economic situation and challenges to be overcome to secure sustainable development, which have also been addressed in previous year's reports, in the Economic Council's annual reports, and in the Tax and Welfare Commission's recommendations. The Report also contains a follow-up on the Sustainability and Growth Plan from 2016, with its four reform tracks. The Sustainability and Growth Plan and follow-up in the form of reform measures, specific initiatives and targeted investment are intended to promote sustainability in public finances, and increased growth and employment in the private sector on a sustainable basis. As such, it is intended to contribute to achieving several objectives: • That the country's economy is healthy and stable, in a manner that is sustainable in the long- term and can gradually free Greenland from dependency on the block grant, and enable it to take over relevant responsibilities from the Danish State at an appropriate pace. This requires sustainable economic progress in which Greenland gradually steps up domestic production and reduces its exposure by developing more economy-sustaining trades and industries. • To focus on ongoing capacity-building, including through a general boost to the level of educational attainment and labour market participation in order thereby to enable the Greenland authorities to take over new responsibilities from the Danish State. • A more equitable development geographically and among municipalities in order to maintain an appropriate level of welfare throughout Greenland, generate real growth in the private sector in several locations and offer all citizens better and more consistent opportunities for bettering their lives. • Generate greater purchasing power for individuals and for families, including and especially providing a boost to low and middle income groups, to reduce the high level of social inequality. Political Economic Report 2019 addresses these and other matters. The Report contains a special section on how the Government of Greenland can pave the way for better and more equal conditions for citizens through various proposals for specific initiatives. This applies in particular to reforms within the following key areas: • The education sector, where the focus is on removing bottlenecks in order to get more people through the education and training system. • The housing sector with a focus on improving the devolvement of rented housing to the municipalities and the forthcoming reform of the Tenancy Act in order to ensure increased sustainability in the housing sector. • Increased financial self-reliance, including reforms designed to increase the supply of labour. • Cross-sectoral early intervention initiatives for at-risk children and youth. • The drafting of a plan for gradual take-over of responsibilities from the Danish State. The Report also contains updated goals and principles for economic policy, the status of follow-up on the SDGs and work on Sector Plans. I wish you an enjoyable read and look forward to further debate going forward. Vittus Qujaukitsoq, Minister of Finance and Nordic Cooperation 3 Contents 1 Foreword ......................................................................................................................................... 3 2 Introduction .................................................................................................................................... 6 2.1 The economic situation and structural problems ................................................................... 8 2.1.1 Trends in the fisheries ..................................................................................................... 9 2.1.2 Partnership agreements with the EU ............................................................................ 13 2.1.3 Other trade and industry .............................................................................................. 14 2.1.4 Exports of ice and water ............................................................................................... 15 2.1.5 Tourism ......................................................................................................................... 16 2.1.6 Hydrocarbon ................................................................................................................. 17 2.1.7 Mineral resources and minerals ................................................................................... 19 2.1.8 Employment and unemployment ................................................................................. 21 2.2 Treasury finances .................................................................................................................. 23 2.2.1 The Treasury's accounts for 2018 ................................................................................. 23 2.2.2 Relationship with municipal financial performance ............................................................ 26 2.3 Taxes and duties ................................................................................................................... 27 2.4 Tax arrears ............................................................................................................................ 29 2.5 Debt trends ........................................................................................................................... 31 3 Greater autonomy and economic self-sustainability .................................................................... 34 3.1 Goals and principles for the Government of Greenland's economic policy ......................... 34 3.2 Deliberations on future take-over of responsibilities from the Danish State....................... 35 4 Benchmarks and indicators ........................................................................................................... 39 4.1 The Budget and Accounting Act and financial governance .................................................. 39 4.2 Use of benchmarks and performance indicators .................................................................. 39 4.2.1. Cross-cutting goals and indicators ...................................................................................... 41 4.2.2. Goals and indicators for education ..................................................................................... 44 4.2.3. Goals and indicators for growth and employment ............................................................. 45 4.2.4. Goals and indicators for the public sector .......................................................................... 46 4.2.5. Goals and indicators for financial self-reliance ................................................................... 47 4.2.6. Goals and indicators for infrastructure ............................................................................... 49 4.2.7. Goals and indicators for crime reduction ........................................................................... 49 4.3 Poverty measurement .......................................................................................................... 50 4.4 Measurement of sustainable development and the SDG 2030 agenda ............................... 53 4.5 Sector planning ..................................................................................................................... 55 4 5 Follow-up on the Sustainability and Growth Plan .......................................................................
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