Arch rivals form coalition government in Greenland

It turned the heads of many voters when Greenland’s new government coalition was presented after the 28 November elections. 

The social democrat Siumut party secured a narrow win with 34.3 percent of the votes, which was only 326 more votes than the leftist Inuit Ataqatigiit party (IA).

The two big parties had 11 seats in parliament each, out of a total of 31. So the social democrats had to seek backing from either IA or two smaller parties in order to secure a parliamentary majority. 

Not surprisingly, Siumut leaned towards the centre-right Atassut party. But at the same time the other centre-right party, the Democrats, made history by entering into a coalition led by the social democratic party. This would have been unthinkable during the elections in March 2013.

Yet since then there has been a generation shift within several parties, and the new party leaders have signalled a will to cooperate.

The coalition agreement is called “Community, Security and Development” and contains 29 points. One important issue on which all the parties agree is to allow the country’s mining industry to extract uranium. That was also the issue which prevented Inuit Ataqatigiits from agreeing to join the government. 

Businesses can also expect tax cuts and investments in the air travel industry should make it easier to transport more tourists to the world’s largest island. The coalition also wants to focus more power in Greenland for businesses owned by the Greenlandic Self-rule Government. That means a majority of board members should  be from Greenland, and the parties will also consider a privatisation of the companies.

Economic crisis

Yet as the new coalition get down to work, dark clouds are gathering over the Greenlandic economy. New figures from the autonomous government released just before the elections showed the treasury deficit had grown to nearly 250 million Danish kroner (€33.6m). That is considerably more than the budgeted deficit for the whole of 2014; a mere 51 million kroner. 

So anyone who gains a seat around Greenland’s new government table in the wake of the 28 November parliamentary elections, faces a major challenge getting Greenland’s economy back in shape.

There are several reasons why things have gone wrong. A large, unscheduled 174 million kroner (€23.4m) contribution to fight unemployment saw the deficit balloon earlier this year. But the most important cause is smaller than expected state revenue.

Greenlanders smoke and drink less than predicted, which means a reduction in tax revenues. The country’s shrinking economy also means people make less money — and pay less in tax. Finally, Greenland’s government has been putting too much hope on an experimental mackerel quota which was meant to bring in money in the form of levies. The fishing companies did not manage to fill the quotas, and suddenly the state coffers were 20 million kroner short.

Lower income levels also make it even more challenging for politicians to come up with sustainable economic policies. Beyond the current state deficit, everything points to smaller than expected revenues both in 2015 and beyond. This in turn makes it even harder for politicians to fulfil the many promises they gave voters during the election campaign.

New party leaders

Both the governing Social Democrat Siumut Party and the opposition Inuit Ataqatigiit (IA) went to the polls fronted by new leaders. The experienced politician and ex-policeman Kim Kielsen led the Social Democrats through the campaign, after Aleqa Hammond had to step down following a scandal. He gained a seat in Greenland’s parliament (Landsting) in 2005, has served as a government minister for several periods and has proven worthy of his leadership during the election campaign. 

The challenger, Sara Olsvig, is a trained anthropologist with a shorter political career. She was elected to the Danish parliament (Folketing) in 2011 and became a member of Greenland’s parliament in 2013. 

Sara Olsvig took over as party leader last summer, after Kuupik Kleist — who in 2009 became the first Prime Minister to end Siumut’s monopoly on government power.