Greenland election: “Good news for investors”
The result of the election is good news for investirs in Greenlands future, says Mikå Mened. (Foto: Vincent van Zeijst, Wikimedia commons).
Mikå Mered
Leader of Polarisk Analytics.
29/11/2014

The most-robust scenario at this point is that Kim Kielsen will work out a coalition agreement with Parti Naleraq within the next few days and Hans Enoksen will be Kim Kielsen’s deputy Premier.

There are more things that put them together than things that set them apart. We also believe that Per Rosing-Petersen (Partii Naleraq’s #2) may become Minister for Infrastructure and Knud Kristiansen (Atassut’s newly elected party-leader) will also be part of the new government.

Kim Kielsen will have to compromize and give Partii Naleraq some insurance on uranium mining, namely in the form of holding a referendum on uranium in the next quarters. But overall, that should not be too big of a compromize to make for Siumut given that, with a good campaign, the referendum’s result may very well end up in Siumut’s favor.

Overall, the outcome of this election is very good news for investors, especially in the mining and infrastructure sectors. With Siumut remaining in power, especially with a figure as reassuring as former policeman Kim Kielsen, we expect Greenland to stabilize itself —both from a political risk and a regulatory risk standpoint— whilst keeping the country’s march towards independence.

On the economic front: Kim Kielsen will do everything to have an economically sound 2015 budget bill voted before Christmas. He will invest in building new infrastructure across the country so as to boost the economy. He will get less tough on natural resources investors so as to, 1- regain the interest of past investors who had turned their back on Greenland due to political and regulatory risks, and 2- attract new FDIs. He will also invest in social housing, in building new fish processing capabilities so as to increase Greenland’s exports revenues, and is very likely to privatize some of Greenland’s great public monopolistic companies —yet another great business opportunity for foreign investors.

On foreign policy, Kielsen is likely to pursue Greenland’s open-door policy with Greenland’s Asian partners (namely South Korea and China). It will be hard for the new government to finance the opening of a diplomatic representation in Beijing, but that can be expected to happen in 2016 or 2017 if the Greenlandic economic bounces back in 2015.

 

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