The Greenland Economy, The Greenland Economy, Construction, Reforms and Construction, Reforms and

Entrepreneurship in the Greenland Entrepreneurship in the Greenland Housing SectorHousing Sector

Gorm WintherGorm Winther

Professor, Ph.D.Professor, Ph.D.

Dept. of Environmental, social and Spatial ChangeDept. of Environmental, social and Spatial Change

University of Roskilde.University of Roskilde.

One Can One Can AlwaysAlways Need a Helping Hand Need a Helping Hand

Greenland – a Dependent EconomyGreenland – a Dependent Economy

• Economic Dependence – Block Grant from the Danish Economic Dependence – Block Grant from the Danish State and Ministerial Expenses on Greenland.State and Ministerial Expenses on Greenland.

• Dependence on Trans-national Corporations (Capital, Dependence on Trans-national Corporations (Capital, technology, know how regarding regulations and tax technology, know how regarding regulations and tax systems)systems)

• Organizational Dependence (Danish customs on how to Organizational Dependence (Danish customs on how to do things, how to organize, management philosophy)do things, how to organize, management philosophy)

• Social Apathy and Alienated PositionsSocial Apathy and Alienated Positions

• Low degree of entreneurshipLow degree of entreneurship

The Greenland ModelThe Greenland Model

Decreasing dependenceDecreasing dependenceThe Ratio of the States expenditures regarding Greenland The Ratio of the States expenditures regarding Greenland

to the Disposable National Income in Greenlandto the Disposable National Income in Greenland

EtatismEtatismEtatism refers to a social formation where society is Etatism refers to a social formation where society is subordinated to the State, and where the State regulates all subordinated to the State, and where the State regulates all basic social relations ( Property relations, distribution of basic social relations ( Property relations, distribution of resources, and incomes, control over the supply of labor, resources, and incomes, control over the supply of labor, control with cultural life, mass media and the educational control with cultural life, mass media and the educational system etc). The French expression Etatism (etat=State) is system etc). The French expression Etatism (etat=State) is used instead of ‘Statism’. The concept has earlier been applied used instead of ‘Statism’. The concept has earlier been applied in research on the former USSR and Eastern Europe. Critique in research on the former USSR and Eastern Europe. Critique of the Soviet model characterized as an ‘Etatist’ mode of of the Soviet model characterized as an ‘Etatist’ mode of Production originates from the ‘Polish School’ (Oscar Lange, Production originates from the ‘Polish School’ (Oscar Lange, Wlodzimierz Brus and Edward Lipinski) and from proponents Wlodzimierz Brus and Edward Lipinski) and from proponents of the self-management model in former Yugoslavia (Edward of the self-management model in former Yugoslavia (Edward Kardelj, The Praxis group, Branko Horvat and Eugen Pusic).Kardelj, The Praxis group, Branko Horvat and Eugen Pusic).

Percentages of CollectivismPercentages of Collectivism

Government Government Expenditures to Gross Expenditures to Gross Domestic ProductDomestic Product

19941994 87,587,5

19981998 81,881,8

20022002 81.081.0

20062006 78.078.0

Companies: Part or Full Home Rule Ownership (2002)Holding: Subsidiaries:

Royal Greenland Inc (100%) (Aalborg, Glyngøre, USA, Japan, Germany)

KNI Inc. (100%) KNI Pilersuisoq Inc (100%)

Pisiffik Inc. (32.2%) ’Sparkøb’ (100%)

’Super Byg’ (40%)

Royal Arctic line (100%) Arctic Container oper. (80%) Aalborg Stevedore (100%)

RAL Linie Agentur (100%) RAL Spedition (100%)

RAL Bygdeservice (100%)

Royal Arctic Tankers (50%)

Air Greenland Inc. (37.5%) Arctic Hotel, Ilulissat (100%)

Greenland Travel (100%)

Tele Greenland Inc. (100%) Tele Gr. International (100%)

’Santa Claus’ (100%)

Nuuk Imeq Inc. (25.7%)

Nuna Minerals Inc. (91.1%) Moreover: Direct On the

Greenland resources inc. (100%) Greenland Contractors (33%) Fiscal Budget (100%):

Nuna oil Inc. (50%) Nukissiorfiit

Nuka Inc. (100%)

Sulisa Inc. (58%)

Housing Corporation INI (100%) Amutsiviit

Arctic Umiaq line (100%) Missueqqarrniit

Nunatta Naqiterivia (100%) (Grønl. Forundersøgelser)

Greenland Tourism (100%) Mittarfeqarfiit

Stratification of the Greenland Elite (The New Stratification of the Greenland Elite (The New Class)Class)

The Greenland Technostructural EliteThe Greenland Technostructural EliteThe Danish Technostructural EliteThe Danish Technostructural EliteThe Political EliteThe Political EliteThe Elite of Interest articulating The Elite of Interest articulating OrganizationsOrganizationsThe Private Capitalist EliteThe Private Capitalist Elite

Contradictions within the ruling ClassContradictions within the ruling ClassDevelopment Strategies:Development Strategies:

’’Imported’ highly educated and skilled Danes and some Imported’ highly educated and skilled Danes and some politicians proponents of neo-liberalism (Rent- and power politicians proponents of neo-liberalism (Rent- and power seeking).seeking).

’’Conservative’ forces prefer to maintain at least Conservative’ forces prefer to maintain at least elements of Greenland Etatism.elements of Greenland Etatism.

(Defending Obtained Power)(Defending Obtained Power)

A minority of ’Third Way’ proponentsA minority of ’Third Way’ proponents

(Participatory power)(Participatory power)

The Greenland Housing Sector I (G50)

• The typical Settlement house of the fifties and sixties.

• Heating based on Ship Stoves.

• Water from tap houses.

• The traditional Economy based on hunting and fishing and low tech. Manufacturing of products (drying or salting).

Qullissat• A mining town

established in 1924.• The mine was closed

in 1972 (1000 inhabitants).

• The store was closed• The inhabitants were

forced to move.• In 2002 a giant

tsunami washed many of the houses away.

The Greenland Housing Sector II (G60)

• The Concentration policies of the sixties.

• Exodus from the Settlements to the larger towns.

• Building in concrete and in floors.

• Hunters and Fishermen were moved into the towns.

• Wage earning in modern plants and Alienated dwellers.

Block P in Nuuk (2% of the Block P in Nuuk (2% of the Greenland Population)Greenland Population)

Greenland Housing Sector III• The Construction after

the sixties up until now.

• Close-low buildings.• Wooden houses• Houses covered with

wood or fiber cement boards.

Greenland Housing Sector IV• The settlement houses

today• But also in towns• ‘Illorput’ house• Favorable support

from the Government• ‘Do it yourself

housing’

Back to the past (G10): Reforms

• Back to tall buildings• Concentration of

people in four towns• Abolishment of

uniform price system• Reliance of markets• Privatizations,

liberalization, franchizing and service contracts with private firms

The Construction sector dominated by Greenland Companies Operated by Danes and by Danish and foreign companies

• Very few Greenland Employers and entrepreneurs

• Danish Craftsmen came to Greenland and often with the Help from the Greenland technical Organization they started their own business.

• Building with Concrete Bricks Instead of wood?

• The case of the Siku-block (Jakob Knudsen)

• This man so seldom an occurrence that some would say he should be stuffed.

• The Elite opposed him in the debate.

• A lobby of Carpenter Employers against him

The Nursing Home in Narsaq.

One of the Few Entrepreneurs• Manufacturing of bricks in

Greenland.

• Another building technique than Bricks manufactured from clay.

• A production based on a Block Machine

• Multi-good Production.

Comparing Building techniquesComparing Building techniques•Wooden Skeleton outer wall covered with fiber cement boards Wooden Skeleton outer wall covered with fiber cement boards

•Sikublock Bricks (Concrete blocks)Sikublock Bricks (Concrete blocks)

•Wooden Skeleton covered by wooden boardsWooden Skeleton covered by wooden boards

•Burned clay bricksBurned clay bricks

Cost-efficency, employment and Balance of trade analysis based on Cost-efficency, employment and Balance of trade analysis based on calculations on outer walls, concrete floor constructions and wall calculations on outer walls, concrete floor constructions and wall partitions. The remaining part of the building is the samepartitions. The remaining part of the building is the same

Construction of Apartment block in Sisimiut as our caseConstruction of Apartment block in Sisimiut as our case

Socio-economic impact of the four building types.Socio-economic impact of the four building types.  

Fiber cementFiber cement Sikublok-Sikublok- WoodenWooden Clay Clay bordsbords BoardsBoards bricksbricks

1 boligblok:1 boligblok:  Production valueProduction value 876.651 876.651 1.070.1871.070.187 908.176908.176

1.093.580 1.093.580 Value addedValue added 294.160 294.160 356.308 356.308 313.915 329.600****313.915 329.600****GDP Change*GDP Change* 464.773 464.773 562.967 562.967 495.986495.986

520.767520.767Employmenteffect** 2,20Employmenteffect** 2,20 2,74 2,74 2,27 2,27 2,73 2,73Importeffect***Importeffect*** 582.491 582.491 659.769 659.769 594.261594.261

763.980763.980  * * Income multiplier is estimated to 1,58.Income multiplier is estimated to 1,58.** ** Statistic Greenlands Employment multiplier (1990) for the direct and the Statistic Greenlands Employment multiplier (1990) for the direct and the

indirect employment in construction. Other techniques than Siku-block is indirect employment in construction. Other techniques than Siku-block is pure import. The measure is man years per invested million D.Kr.pure import. The measure is man years per invested million D.Kr.

*** Calculations based on V&S data on building materials. *** Calculations based on V&S data on building materials. **** The relative higher value added for clay bricks is explained by the high **** The relative higher value added for clay bricks is explained by the high

freight cost that involves more handling and yields a higher volume of freight cost that involves more handling and yields a higher volume of logistics. logistics.

Thank You