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Economy of Greenland

From Wikipedia, the free encyclopedia

Economy of Greenland
Colorful-nuuk2.jpg
Nuuk skyline at night
Currency1 Danish krone (DKK) = 100 øre
calendar year
Statistics
PopulationDecrease 56,025 (2018)[1]
GDP
  • Increase $2.714 billion (nominal, 2016)[2]
  • Increase $2.413 billion (PPP, 2015 est.)[3]
GDP rank
GDP growth
  • 4.7% (2014) −2.5% (2015)
  • 6.0% (2016) 1.0% (2017)[4]
GDP per capita
  • Increase $48,296 (nominal, 2016)[5]
  • Increase $41,800 (PPP, 2015 est.)[3]
GDP per capita rank
GDP by sector
Population below poverty line
16.2% (2015 est.)[3]
Positive decrease 33.9 medium (2015 est.)[3]
Labour force
  • 26,840 (2015 est.)[3]
  • Increase 60% employment rate (2015)[6]
Labour force by occupation
UnemploymentPositive decrease 9.1% (2015 est.)[3]
Main industries
fish processing (mainly shrimp and Greenland halibut); Oil, gold, niobium, tantalite, uranium, iron, and diamond mining; handicrafts, hides, skins, small shipyards
External
ExportsDecrease $407.1 million (2015 est.)[3]
Export goods
fish and fish products 91% (2015 est.)
Main export partners
ImportsDecrease $783.5 million (2015 est.)[3]
Import goods
machinery and transport equipment, manufactured goods, food, petroleum products
Main import partners
Positive decrease $36.4 million (2010)[3]
Public finances
13% of GDP (2015 est.)[3]
+5.6% (of GDP) (2016 est.)[3]
Revenues1.719 billion (2016 est.)[3]
Expenses1.594 billion (2016 est.)[3]
Economic aid$650 million subsidy from the Kingdom of Denmark (2012)
Main data source: CIA World Fact Book
All values, unless otherwise stated, are in US dollars.

The economy of Greenland can be characterized as small, mixed and vulnerable.[7] Greenland's economy consists of a large public sector and comprehensive[clarification needed] foreign trade. This has resulted in an economy with periods of strong growth, considerable inflation, unemployment problems and extreme dependence on capital inflow from the Kingdom Government.[7]

GDP per capita is close to the average for European economies, but the economy is critically dependent upon substantial support from the Danish government, which supplies about half the revenues of the Self-rule Government, which in turn employs 10,307 Greenlanders [8] out of 25,620 currently in employment (2015). Unemployment nonetheless remains high, with the rest of the economy dependent upon demand for exports of shrimp and fish.[9]

YouTube Encyclopedic

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  • ✪ Greenland and Iceland Compared
  • ✪ History of Greenland
  • ✪ Ancient History in Greenland Ice

Transcription

Iceland and Greenland Both are countries Um, well, Greenland is not exactly its own country It’s part of the Kingdom of Denmark, considered a self-governing constituent country. So it’s almost a country? Kind of a country? Well, most of the people who live there are not Danish. They are Inuit. Iceland is a country. Wait a second. Let me double check. Hey Iceland. Are you a country? Iceland: Uh, yeah. Mr. Beat: That's what I thought. Both are way north. In fact, north of 60 degrees north of the Earth’s equator. So in the winter they have little sunlight, but in the summer the sun doesn’t seem to ever go down. The Vikings, or more accurately the Norsemen, were the first European settlers of both Iceland and Greenland, reaching the two places hundreds of years before Columbus sailed west. However, Greenland was first settled by various Inuit tribes thousands of years before European arrival. The Norseman were the first settlers of Iceland, arriving around the year 870. So Iceland is one of the most recent islands ever settled by humans. Islands? Yeah, both Iceland and Greenland are islands. Greenland is the largest island in the world. Wait, it's not THAT big. Stupid Mercator projection. Both have hardly any people. Iceland has a population of around 350,000, while Greenland has a population of around 57,000, despite being about 21 times bigger than Iceland. There are more people in the city of Omaha, Nebraska, than both Iceland and Greenland COMBINED. Both have hardly any native species of plants and animals. There are absolutely no native reptiles or amphibians on the two islands. Get this, Greenland has mosquitoes, that can be pretty relentless in the summer especially since it’s been getting warmer there, but Iceland? Nope. Iceland apparently has no mosquitoes. Most residents of both are concentrated in one single city. More than half of Icelanders live in or around Reykjavík, Iceland’s largest city, and about a third of Greenlanders live in Nuuk, Greenland’s largest city. The biggest religion in both countries is Christianity, specifically having ties with Lutheranism. The Church of Denmark dominates in Greenland, and the Church of Iceland dominates in, um, you know, Iceland. But really, Iceland is much less religious than Greenland. It’s a very secular country, and church attendance tends to be low there. Both are more politically and culturally aligned with Europe than North America, despite the fact that Greenland is part of North America. Both have a parliamentary system of government. As I mentioned earlier, Greenland is technically still part of the Kingdom of Denmark, but it governs itself. Denmark only still controls Greenland’s defense and foreign relations. Both have economies that revolve fishing and fish processing and the metals. Not heavy metal. No, not that kind of metal. Like metals, like...yes, that kind of metal. Greenland, however, is heavily dependent on Denmark in terms of investment dollars. Tourism is much bigger in Iceland than Greenland. Both are members of NATO. Steven: Playdoh? Mr. Beat: No, NATO. Both are not members of the European Union. Well, Denmark is so Greenland is closely linked to it. Both Iceland and Greenland have universal health care. Based solely on the names of the two, it may seem that Iceland and Greenland are two very different places, and yep, they mostly are. First of all, why is Iceland called Iceland and Greenland called Greenland, anyway? Well, according to the Landnamabok, aka The Book of Settlements, a Viking named Floki Vilgerdarson named it that after experiencing some bad luck on the island due to cold weather. Erik the Red gave Greenland its name after he settled there in 982 after getting kicked out of Iceland for killing a dude. Erik and his fellow Norsemen called it Greenland partly because it was a bit warmer there back then, meaning the area where they settled actually was green, but also because they wanted to attract new settlers to the area. So yeah, you could argue it was a bit of a marketing scheme. While both Iceland and Greenland have permanent ice caps, Greenland has a lot more ice than Iceland. Iceland’s covered in 11 percent of permanent ice, whereas Greenland’s covered in about 80 percent of it. Due to warmer sea temperatures around Iceland, it has more moderate temperatures than Greenland. It gets warmer in the summer in Iceland, and colder in the winter in Greenland. So yeah, Iceland is more green than Greenland and Greenland is more icy than Iceland. Confused yet? Most Icelanders are descendants of Norse and Gaelic settlers, and their culture reflects that. Most Greenlanders are Inuit. Get this. Icelandic is the official language of Iceland, and Greenlandic is the official language of Greenland. That just makes sense, man. By many standards of living accounts, Iceland comes out ahead versus Greenland. Iceland is wealthier. It has a GDP per capita of $48,100, while Greenland has a GDP per capita of $37,900. Iceland has the 7th most productive economy in the world. It also has one of the lowest rates of income inequality in the world. The average lifespan in Iceland, which is among the highest in the world, is 83 years, whereas it’s just 73 in Greenland. In Iceland, the unemployment rate is just 2.8%. It’s 9.1% in Greenland. Babies born in Iceland are around 77% less likely to die in infancy than babies born in Greenland. Iceland has a much more developed internet presence than Greenland. And no offense Greenland, but both Iceland’s music scenes and film contributions are more world-renowned than Greenland’s. Iceland uses a heck of a lot more energy than Greenland, but it’s fairly cheap due to the easy access to geothermal and hydroelectric power there. Speaking of geothermal...(The Secret Life of Walter Mitty clip) Iceland has lots of volcanoes, and Greenland has none. Thanks to sitting right smack dab on the Mid-Atlantic Ridge, Iceland has hundreds of volcanoes...about 30 of them are active. One volcanic eruption there in the 18th century caused a freaking famine that killed about a quarter of the island’s population. Iceland is one of the most geographically active places on the planet. Probably the most fascinating and disturbing part of my research for this video was looking at how happy each island was. While it’s always challenging to measure the happiness of a large group of people, I found out that Greenland has had the world’s highest suicide rate for decades. This, despite the fact that the World Happiness Report lists Denmark, a country Greenland is still technically a part of, as the second happiest country in the world. The third happiest country according to that list? Iceland. That's the first time I've compared places outside the United States. So looking to branch some more in the future. I know I didn’t cover it all, but what do you think? Are any of you from Iceland or Greenland? Have you been to either place? I’d love to hear from you in the comments below. I can’t wait to visit both places. Hey now, thanks for watching. I’ll be back next week with another episode of Supreme Court Briefs.

Contents

Historical development

Except for an abortive royal colony established under Major Claus Paarss between 1728 and 1730, colonial Greenland was administered by companies under royal charter until 1908. Hans Egede's Hope Colony was organized under the auspices of the Bergen Greenland Company prior to its bankruptcy in 1727; it was succeeded by the merchant Jacob Severin (1733–1749), the General Trade Company (Det almindelige Handelskompagni; 1749–1774), and finally the Royal Greenland Trading Department (KGH; 1776–1908).

Early hopes of mineral or agricultural wealth were dashed, and open trade proved a failure owing to other nations' better quality, lower priced goods and hostility.[10] Kale, lettuce, and other vegetables were successfully introduced, but repeated attempts to cultivate wheat or clover failed throughout Greenland, limiting the ability to raise European livestock.[11] After government-funded whaling failed, the KGH eventually settled on maintaining the native Greenlanders in their traditional pursuits of hunting and whaling and enforced a monopoly on trade between them and Europe. Repeated attempts to open trade were opposed on both commercial and humanitarian grounds, although minor reforms in the 1850s and 60s lowered the prices charged to the natives for "luxuries" like sugar and coffee; transferred more of the KGH's profits to local communities; and granted the important Ivigtut cryolite concession to a separate company.[10]

During the years before World War I, the KGH's independence was curtailed and the company folded into the Ministry of the Interior. Climate change, apparent since the 1920s, disrupted traditional Kalaallit life as the milder weather reduced the island's seal populations but filled the waters offshore with cod.[12] After World War II, reforms were finally enacted by the Danish Greenland Commission composed of Greenland Provincial Council members and Danish economists. The report outlined a program to end the KGH model and establish a modern welfare state on the Danish model and supported by the Kingdom Government. The KGH monopolies were ended in 1950; Greenland was made an equal part of the Kingdom of Denmark in 1953 and Home Rule granted in 1979.

The KGH had long opposed urbanization of the Kalaallit Greenlanders, but during the 1950s and 1960s the Danish government introduced an urbanization and modernization program aimed at consolidating existing settlements. The program was intended to reduce costs, improve access to education and health care, and provide workers for modernized cod fisheries, which were growing rapidly at the time. The program faced a number of problems including the collapse of the fisheries and the shoddy construction of many of the buildings, particularly the infamous Blok P, and produced a number of problems of its own, including continuing unemployment and alcoholism.

Greenland left the European Economic Community in February 1985,[13] principally due to EEC policies on fishing and sealskin. Most EU laws do not apply to Greenland; however, owing to its connection with Denmark, Greenland continues to enjoy preferential access to EU markets.[13] In the same year, Greenland exercised its new control over the Royal Greenland Trading Company to reestablish it as KNI. Over the next few decades, divisions of the conglomerate were slowly spun off and competition within the Greenlandic economy somewhat increased.

Following the closure of the Maarmorilik lead and zinc mine in 1990 and the collapse of the cod fisheries amid colder ocean currents, Greenland faced foreign trade deficits and a shrinking economy, but it has been growing since 1993.[citation needed]

Sectors of the economy

Greenland Export Treemap
Greenland Export Treemap

The Greenland economy is extremely dependent on exports of fish and on support from the Danish Government, which supplies about half of government revenues.[14] The public sector, including publicly owned enterprises and the municipalities, plays the dominant role in the economy.

Governance

The largest employers in Greenland are the various levels of administration, including the central Kingdom Government in Denmark, the Local Greenland Self-Rule Government, and the municipalities. Most of these positions are in the capital Nuuk.[15] In addition to this direct employment, the government heavily subsidizes other major employers in other areas of the economy, including Great Greenland's sealskin purchases, Pilersuisoq's rural stores, and some of Air Greenland and Royal Arctic's regional routes.

Fishing industry

The second-largest sector by employment is Greenland's fishing industry. The commercial fishing fleet consists of approximately 5,000 dinghies, 300 cutters, and 25 trawlers. While cod was formerly the main catch, today the industry centers on cold-water shrimp and Greenland halibut.[15]

The fish processing industry is almost entirely centered on Royal Greenland, the world's largest retailer of cold-water shrimp.[15]

Hunting and whaling

Whaling and seal hunting were once traditional mainstays of Greenland's economy. Greenlanders still kill an estimated 170,000 seals a year[15] and 175 whales a year,[16][17] ranking them second and third in the world respectively. Both whaling and sealing have become controversial, limiting the potential market for their products. As such, the only seal tannery in the country – Great Greenland in Qaqortoq – is heavily subsidized by the government[15] to maintain the livelihood of smaller communities which are economically dependent on the hunt.[18]

Reindeer or caribou are found in the northwest of the island, while muskoxen are found in the northeast and at Kangerlussuaq. Because the muskoxen's natural range favors the protected Northeast Greenland National Park, it is a less common object of hunting than in the past. Polar bear and reindeer hunting in Greenland still occur but are regulated to avoid endangering the populations.

Retail

Approximately half of total sales are conducted by KNI, the state-owned successor to the Royal Greenland Trade Department; its rural sales division Pilersuisoq; or its daughter company – which has been purchased by the Danish Dagrofa – Pisiffik.[15] The third major chain is the Brugsen association of cooperatives.[19]

Mining

Ivigtut used to be the world's premier source of natural cryolite, an important mineral in aluminum extraction, but the commercially viable reserves were depleted in the 1980s. Similarly, deposits of coal, diamonds, and many metals – including silver, nickel, platinum, copper, molybdenum, iron, niobium, tantalum, uranium, and rare earths – are known to exist, but not yet in commercially viable deposits.[20] Greenland's Bureau of Minerals and Petroleum is working to promote Greenland as an attractive destination for prospectors.[20] Improvements in technology and increases in mineral prices have led to some mines being reopened, such as the lead and zinc mine at Maarmorilik and the gold mine at Nalunaq.[21]

Greenland is expected to be one of the world’s next great mining frontiers as global warming starts to uncover precious metals from the frozen surroundings. Substantial volumes of minerals are now within reach of geological land mapping technologies, according to research conducted by GlobalData, a natural resources business intelligence provider.[22]

Energy

At 70%, Greenland has one of the highest shares of renewable energy in the world, mostly coming from hydropower.[23][additional citation(s) needed]

While the Greenland Home Rule Government has primary sovereignty over mineral deposits on the mainland,[24] oil resources are within the domain of the Danish exclusive economic zone. Nonetheless, prospecting takes place under the auspices of NUNAOIL, a partnership between the two governments. Some geologists believe Greenland has some of the world's largest remaining oil resources:[25] in 2001, the U.S. Geological Survey found that the waters off north-eastern Greenland (north and south of the Arctic Circle) could contain up to 110 billion barrels (17×10^9 m3) of oil,[26] and in 2010 the British petrochemical company Cairns Oil reported "the first firm indications" of commercially viable oil deposits.[27] Nonetheless, all six wells drilled since the 1970s have been dry.

Greenland has offered eight license blocks for tender along its west coast by Baffin Bay. Seven of those blocks have been bid for by a combination of multinational oil companies and NUNAOIL. Companies that have participated successfully in the previous license rounds and have formed a partnership for the licenses with NUNAOIL are DONG Energy, Chevron, ExxonMobil, Husky Energy, and Cairn Energy. The area available known as the West Disko licensing round is of interest due to its relative accessibility compared to other Arctic basins, as the area remains largely free of ice and contains a number of promising geological leads and prospects from the Paleocene era.

Coal used to be mined at Qullissat but this has been suspended.

Electricity generation is controlled by the state-owned Nukissiorfiit. It is distributed at 220 V and 50 Hz and sockets of Danish type K are used. Electricity has historically been generated by oil or diesel power plants, even though there is a large surplus of potential hydropower. Because of rising oil prices, there is a program to build hydro power plants. Since the success of the 1993 Buksefjord dam, – whose distribution path to Nuuk includes the Ameralik Span – the long-term policy of the Greenland government is to produce the island's electricity from renewable domestic sources. A third turbine at Buksefjord brought its capacity up to 45 MW in 2008; in 2007, a second, 7.2 MW dam was constructed at Qorlortorsuaq; and in 2010, a third, 15 MW dam was constructed at Sisimiut. There is a plan for an Aluminium smelter plant, which requires multiple large (total 600-750 MW) hydropower plants.[28] Domestic heating is provided by electricity at locations where there is a hydro power plant.

Tourism

Tourism is limited by the short summers and high costs. Access is almost exclusively by air, mainly from Scandinavia and Iceland. Some tourists arrive by cruise ship (but they don't spend much locally, since the ship provides accommodation and meals). There have been tests with direct flights from the US East Coast from 2007 to 2008, but these were discontinued. The state-owned tourism agency Visit Greenland has the web address Greenland.com.[29]

Agriculture and forestry

Agriculture is of little importance in the economy but due to climate change – in southern Greenland, the growing season averages about three weeks longer than a decade ago[30] – which has enabled expanded production of existing crops. At present, local production accounts for 10% of potatoes consumption in Greenland, but that is projected to grow to 15% by 2020. Similarly, it has enabled new crops like apples, strawberries,[31] broccoli, cauliflower, cabbage, and carrots[30] to be grown and for the cultivated areas of the country to be extended[32] although even now only about 1% of Greenland is considered arable.[33] Expanded production is subsidized by the government through purchase guarantees by the state-owned Neqi A/S grocery store chain.

The only forest in Greenland is in the Qinngua Valley near Nanortalik. It is protected and not used for timber production.

Animal husbandry

Animal husbandry consists mainly of sheep farming, with free-grazing flocks. Modern sheep farming methods were introduced in the early 20th century, with the first farm built in 1906.[34] The farms provide meat for local consumption and wool mainly for export. Some 20,000 lambs are slaughtered annually in Narsaq by the state-owned Neqi A/S.[15] The lack of private land ownership rights on Greenland[citation needed] forces farmers to jointly agree to terms of land usage. In the south, there is also a small cattle farm.[35][36]

Reindeer herding has been introduced to Greenland in waves since 1952. Supervision by Scandinavian Sami ended in 1978 and subsequent results were dismal. Repeated attempts in mid-west Greenland in the 1980s and the 1990s failed due to the immobility of the herds, which destroyed their forage.[37] In 1998, the remaining herd was sold to the Nuuk municipality and removed through hunting. At that point, only one Greenlander was still a deerherd; the rest – about 20 people – were still hired Norwegian Sami. Although the conclusion was drawn that reindeer herding was incompatible with the local culture, the southern herds continue to prosper. In 2008, there was still a strong herd at the Isortoq Reindeer Station[38] maintained by the Icelander Stefán Magnússon and Norwegian Ole Kristiansen.

See also

References

  1. ^ "Population, total". data.worldbank.org. World Bank. Retrieved 22 August 2019.
  2. ^ "GDP (current US$)". data.worldbank.org. World Bank. Retrieved 22 August 2019.
  3. ^ a b c d e f g h i j k l m n o p q "The World Factbook". CIA.gov. Central Intelligence Agency. Retrieved 22 August 2019.
  4. ^ "GDP growth (annual %)". data.worldbank.org. World Bank. Retrieved 22 August 2019.
  5. ^ "GDP per capita (current US$)". data.worldbank.org. World Bank. Retrieved 22 August 2019.
  6. ^ "Employment to population ratio, 15+, total (%) (national estimate)". data.worldbank.org. World Bank. Retrieved 22 August 2019.
  7. ^ a b "Greenland – Its Economy and Resources" (PDF). ARCTIC. Archived from the original (PDF) on 2011-07-06. Retrieved 20 February 2011.
  8. ^ StatBank Greenland. "Main employment for permanent residents by time, industry, gender, age, place of residence, place of birth and inventory". Accessed 19 Jan 2017.
  9. ^ "The Economy of Greenland is Dependent on Fishing". Danish Exporters. Retrieved 20 February 2011.
  10. ^ a b Marquardt, Ole. "Change and Continuity in Denmark's Greenland Policy" in The Oldenburg Monarchy: An Underestimated Empire?. Verlag Ludwig (Kiel), 2006.
  11. ^ Del, Anden. "Grønland som del af den bibelske fortælling – en 1700-tals studie Archived July 15, 2012, at the Wayback Machine" ["Greenland as Part of the Biblical Narrative – a Study of the 18th-Century"]. (in Danish)
  12. ^ Nielsen, Finn. "Planned reforms in Greenland". Arctic, Vol. 4, No. 1 (May 1951), pp. 12–17.
  13. ^ a b "Business Etiquette in Greenland". World Travel Guide. Archived from the original on 31 January 2011. Retrieved 20 February 2011.
  14. ^ "The World Factbook: Greenland". Central Intelligence Agency. Retrieved October 20, 2018.
  15. ^ a b c d e f g Government of Greenland. "About Greenland: Resources and Industry Archived 2012-02-23 at the Wayback Machine". Accessed 30 Apr 2012.
  16. ^ Catches under Permit Archived 2011-08-18 at WebCite. Iwcoffice.org. Retrieved on 2011-10-11.
  17. ^ Catches under Objection. Iwcoffice.org. Retrieved on 2011-10-11.
  18. ^ Hovelsrud-Broda, Grete K. "Contemporary Seal Hunting Households Trade Bans and Subsidies" in At the Interface: The Household and Beyond: Monographs in Economic Anthropology, Vol. 15. Univ. Press of America, 1999.
  19. ^ KNI. "Om os Archived 2012-06-16 at the Wayback Machine" ["About us"]. Accessed 1 May 2012. (in Danish)
  20. ^ a b "Prospectivity of Greenland". Greenland Minerals and Energy, ltd. Archived from the original on 2011-02-19. Retrieved 21 February 2011.
  21. ^ "Greenland – the Last Frontier". Angel Mining. Retrieved 21 February 2011.
  22. ^ Greenland – The next mining destination, International: mining.com, 2012, retrieved 3 October 2012
  23. ^ Nordic Investment Bank. "Hydropower creates clean energy and jobs in Greenland". NIB. Nordic Investment Bank. Retrieved 2 October 2016.
  24. ^ Treaty.[which?] 2008.
  25. ^ Overlooking the world's largest island, The Copenhagen Post, 17 April 2008
  26. ^ Allagui, Slim (July 16, 2006). "Greenland Makes Oil Companies Melt". Agence France-Presse. Retrieved 2008-08-31.
  27. ^ "Oil in Greenland: Black stuff in green land". The Economist. 26 August 2010. Retrieved 20 February 2011.
  28. ^ "Archived copy". Archived from the original on 2013-07-05. Retrieved 2013-06-01.CS1 maint: archived copy as title (link)
  29. ^ Visit Greenland. "About Visit Greenland". Accessed 1 May 2012.
  30. ^ a b Sarah Lyall (4 November 2007). "Greenland's broccoli is bad for our health". The Scotsman. UK. Retrieved 21 February 2011.
  31. ^ Gerald Traufetter. "Arctic Harvest – Global Warming a Boon for Greenland's Farmers". Der Spiegel. Retrieved 21 February 2011.
  32. ^ "Climatic changes and agriculture in Greenland: Plant diseases in potatoes and grass fields" (PDF). IOPscience. Retrieved 21 February 2011.
  33. ^ "Greenland::Economy". Encyclopædia Britannica Online. Retrieved 20 February 2011.
  34. ^ Rasmus Ole Rasmussen. "Greenland". Royal Danish Ministry of Foreign Affairs. Archived from the original on 1 February 2010. Retrieved 21 February 2011.
  35. ^ "Oversigt over får, lam, kvæg, heste og høns fordelt på kommuner – data fra husdyrtælling hos fåreholdere i år 2007, stk". Archived from the original on 2017-11-08. Retrieved 2017-11-07.
  36. ^ "Johs.Pedersens kreaturtransport". www.johs-pedersen.dk.
  37. ^ Christine Cuyler. "Success and failure of reindeer herding in Greenland" (PDF). Greenland Institute of Natural Resources. Archived from the original (PDF) on 11 August 2011. Retrieved 21 February 2011.
  38. ^ "Isortoq Reindeer Station". Randburg.com. Archived from the original on 2013-02-01. Retrieved 21 February 2011.

External links

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