DENMARK

COUNTRY OVERVIEW

LOCATION AND SIZE.

Denmark is in Northern Europe, bordered primarily by the Baltic Sea and North Sea. It consists of the peninsula of Jutland, north of Germany, and close to 406 islands, about 80 of which are inhabited. The most populated and largest of the islands is Zealand, where the country's capital can be found; Funen; and Jutland. Denmark occupies 43,094 square kilometers (16,621 square miles), a little less than twice the size of Massachusetts. Germany shares 68 kilometers (42 miles) of border with Denmark, and the other 7,314 kilometers (4,545 miles) is coastline. In 1 July 2000, the Øresund Bridge was completed, connecting Denmark and southern Sweden. The Kingdom of Denmark also includes the island of Bornholm in the Baltic Sea, and the territories of Greenland and the Faroe Islands.

POPULATION.

Denmark's population in 2000 was 5,336,394, and was projected to fall to around 5,200,000 in 2025. From the late 1960s to the present, the fertility and mortality rates have been declining. Average life expectancy at birth has increased, but it is notable that life expectancy for men and for women in Denmark is still lower than all of its neighbors, especially for women (in 1999 life expectancy for women was 78.3, while in the United States it was 80.1). The overall population growth rate has been consistently low at 0.31 percent.

The Danish population is extremely homogenous. As of 2000, 97 percent are Danes (ethnic Scandinavians), and the rest are Inuit (Eskimo), Faroese, and Germans. The proportion of elderly people in the population has been increasing as well, with the result that in 2000 only 18 percent were under 14, and 15 percent were over 65.

The population is highly urbanized, with around 85 percent living in cities. However, population density is low compared to places such as the United States and European countries farther south. It is worth noting that to be classified as "urban" in Denmark, a settlement needs only 250 people (compared to Greece, where "urban" is defined as a settlement of 10,000 or more). Urbanization has slowed in the 1990s, with some Danes reversing the pattern and moving back to rural areas.

INDUSTRY

MANUFACTURING.

In 1996, 45 percent of the manufacturing industry's total production went to export, corresponding to 75 percent of total exports. Mechanical engineering production, especially of electronic goods, was an increasing proportion of the sector's value, and also created some 12,400 new jobs between 1980 and 1996. Nearly all Danish electronics production is exported, including products such as measuring instruments, microphones, equipment for tele-and radio communication, computer networks, power units, engine controls, and hearing aids. Food, drink, and tobacco production/processing, by contrast, has declined between 1993 and 1997 from around 30 percent to around 25 percent of production in manufacturing. The Carlsberg beer company is the most significant producer of beverages, in 1998 having a turnover of DKr29.3 billion and employing 20,500 workers. The largest employers in manufacturing are the makers of metal products, machinery, and equipment; the food-processing industry (bacon factories, dairies, corn mills, and breweries); the paper and graphic industries; and manufacturers of transport equipment, especially shipbuilding. A significant percentage of workers are also employed making wood and wood products.

CHEMICALS.

The chemical industry has also grown through the last decade, and in 1999 accounted for 24 percent of all chemical production in the EU. Denmark, in 1996, was the world's second-largest per capita exporter of pharmaceuticals, with exports valued at almost DKr15 billion. Novo Nordisk, despite its status as one of the largest chemical companies, is still in many ways typical of Danish industrial style: a high-tech, highly-specialized firm, investing heavily in research (in this case on insulin, hormones, and enzymes), exporting 98 percent of its products.

ELECTRICITY, COAL, GAS, AND OIL.

Denmark is the third-largest oil producer in Western Europe, in 1998 producing 233.35 million barrels per day (bpd) of petroleum, while in the same year natural gas reserves produced 267.69 billion cubic feet (bcf) per year. Natural gas exports at that time were over 95 bcf per year, primarily to Sweden and Germany. Danish oil and gas production in 1998 was worth just over DKr30 million. In 1999, the energy and water industries together employed 17,000 people. Maersk/A.P. Møller, the largest company (of any kind) in Denmark, is heavily involved in oil production, although it began as a shipping concern. Statoil (owned by the state of Norway), and the American-based multinational Amerada Hess are the other significant operators in this industry. At the end of the century, Denmark was still opening up new areas of the North Sea for exploration, and it is possible that new reserves will be discovered. The government retains its shares in some oil industries, and licenses the right to explore and extract.

CONSTRUCTION.

The construction industry illustrates the trend of a decline in work-intensive manufacturing. Devastated in the 1970s and 1980s by a severe fall in house building, production, and employment in this construction fell considerably and stayed low through the late 1990s. The value of construction products fell from 12 percent of GDP in 1972 to 6 percent in 1996. Over that time, employment fell by 43,000. The building and construction industry is mainly made up of small companies in which independent (paid) and assisting (unpaid) spouses constitute a relatively large proportion of those employed. The rapid decline in this sector in Denmark has in the first half of the 1990s led to the industry being more export-oriented, partly through Danish firms increasing activity in Germany. Construction has shifted somewhat from mainly making new buildings (which had accounted for 47 percent of its work in 1970) to a greater focus on repairs and maintenance, which grew from 23 percent in 1970 to 38 percent of construction work in 1999. New building construction in that time frame fell to 32 percent.

SERVICES

TOURISM.

In 1997, 2.2 million tourist arrivals in Denmark were recorded (a 4 percent increase from 1993). In 1999, tourism generated around DKr44 billion in revenues, an increase of 1 million from the year before. This made it the third-largest sector after industry and agriculture. The attractions most visited by tourists are Tivoli Gardens (Copenhagen), Lego Land (Billund), Hans Christian Andersen's House and Museum (Odense), and the Viking Ship Museum (Roskilde). Old manor houses and castles are also popular destinations, while Copenhagen harbor was in 2000 one of the most popular stops on European cruises.

Tourism employed over 70,000 (1999) people full-time in the facilities described above, as well as 650 hotels, 30 inns, 525 registered campsites, and over 100 youth hostels. In 1998, the Danish Ministry of Business and Industry, SAS, the Danish Tourist Council, and other tourism interest groups joined forces with local authorities to promote Denmark as a tourist destination for businesspeople and wealthy weekend tourists from the United States, Germany, Southern Europe, Sweden, and Russia. The 3-year international marketing project was estimated to cost a total of US$7.7 million, of which SAS was to pay US$4 million, the Ministry of Business and Industry US$1.3 million, and the rest will come from various municipalities.

WHOLESALE AND RETAIL TRADE.

Employment in the service sector is dominated by the wholesale and retail trades, with 441,000 people in 1998. However, employment has declined since the 1970s, as the sector has seen considerable vertical integration (an overall integration of retail, wholesale, and in certain cases production sectors). Moreover, 1980s-era mergers within the sector (horizontal integration) have marked both areas, leaving wholesale and retail highly concentrated (with a few firms dominating the market). In 1995, 4 percent of firms accounted for about 75 percent of the total turnover. In 1998, there were 8 wholesalers operating domestically, the largest 2 of which were Maersk and the cooperative FDB, which together accounted for 61 percent of the market in 1998. Total transactions in 1998 amounted to US$10.7 billion. In retail, even though a few large players dominate the industry as a whole, there are still a large number of small shops; 3 out of 4 retail shops are one-person businesses, while the remainder are mainly small companies or cooperatives.

TELECOMMUNICATIONS.

Growth in postal and telecommunications services was larger than any other business sector; from 1992 to 1998 productivity grew by 44 percent. Deregulation of the industry, beginning in 1986, paired with strong research and development supported by the government allowed firms to take advantage of new technologies. However, technological advances have meant that growth was not accompanied by much of a rise in employment, which in 1996 was 45,000 people, the same as in 1986. The major telecommunications companies are at least partly-owned by foreign companies. TeleDanmark, in which Ameritech (U.S.) owns a controlling interest, and Sonofon cellphones, almost half of which is owned by Bellsouth (U.S.), together account for over 75 percent of the market.

FINANCIAL SERVICES.

Between 1989 and 1996 there was a one-third decline in the number of domestic bank and financial institution branches. This was mainly due to Denmark's banks being burdened by a number of bad debts in the early 1990s. Since 1994, the improvement in both Denmark's economy and the banks' lending policies has contributed to more stability in the industry, along with a number of consolidations among the country's banks. The reduction of branches of institutions coincided with a 14 percent decline in the number of employees over the same 7 years. In 1998, Denmark had 95 banks with assets of US$216 billion, while total assets of the 5 largest banks totaled US$179 billion, over 80 percent of total banking sector assets. The 2 largest banks, Den Danske Bank and Unidanmark-Gruppen, also operate as financial "supermarkets" offering a wide range of financial services, and account for 50 percent of the financial service market. Danish banks are technologically sophisticated, and have invested heavily in computers and the development of electronic transfer systems, in 1998 adopting one of the first nationwide electronic payment card systems (Dankort). Employment in business services has been increasing throughout the last decade; by 1999, 326,000 people worked in the financial services sector, with Den Danske bank employing 11,409 people, and Unidanmark-gruppen employing 9,960.

TRANSPORTATION.

Road transport, both trucking/hauling and personal transport such as taxi services, dominates the domestic transportation sector. Road transport in 1996 generated just under half of the total revenues from the transport sector, while the remaining value was divided among other types of the transport: shipping (16 percent), railways (11 percent), and aviation (7 percent). The transport sector created around 9 percent of Denmark's GDP and 7 percent of total employment in 1996. Activity in the sector as a whole has risen steadily and at a faster rate than overall productivity since the 1980s. Production value in the sector rose by 74 percent between 1986-1996. In 2000, over half of Danish international trade was by road, and most of the remainder by sea. Denmark's increasing expertise in making high-tech liner and tanker ships has helped the shipping sector in recent years. Shipping accounts for most of Denmark's international freight traffic, and the country's almost 600-vessel merchant fleet is the fourth-largest in the European Union. Denmark's Maersk shipping line bought the U.S.-based Sea-Land Services in 1999 to become the largest container shipping line in the world.

DEPENDENCIES

GREENLAND.

Greenland (local name Kalaallit Nunaat) is the world's largest island, with an area of 2,175,590 square kilometers (840,000 square miles), slightly more than 3 times the size of Texas. Only 15 percent of the island is not covered in ice. There are no crops or trees, but there are many plants and flowers, as well as seals, fish, and reindeer. The population in 1998 was 54,100 with high birth and death rates. Greenlanders (Inuit and what the CIA World Factbook calls "Greenland-born whites") form the majority with 87 percent of the population, and the rest are Danish and others. Languages spoken are Greenlandic (East Inuit), Danish, and English. The 56 towns and villages on the island are mostly small; 40 have fewer than 500 people, and only 3 have more than 4,000. The administrative capital is Godthåb, called Nuuk in Greenlandic, with around 12,100 people.

Greenland was first a Danish colony in the 1300s, when Norway and Denmark were united kingdoms. In World War II, when Germany occupied Denmark, the U.S. and Danish ambassador in Washington D.C. agreed that U.S. troops could be stationed in Greenland. Some U.S. air bases remain there even now. A referendum (a nation-wide vote on a particular issue) in 1979 gave Greenland "home rule." Denmark has jurisdiction over foreign policy, defense, and justice, and there is joint authority over its oil and mineral resources. Greenland has its own legislature.

The population depends on fishing, and some also hunt seals. There is a small amount of mining, but the harsh climate and lack of transportation infrastructure have prevented much development. Greenland's economy has not been strong in the past 10 years. Since 1990, imports have outpaced exports. Following the closure of Greenland's last lead and zinc mine in 1989, the fishing industry and grants from the Danish government became the mainstay of the economy. In 1999, grants from mainland Denmark and EU payments for the right to fish in Greenland's waters made up about 50 percent of the home-rule government's revenues. As the cod is threatened with extinction, shrimp fisheries have taken over as the most important income earner.

Greenland is also looking to tourism as a sector for growth; however, the season is quite short due to the long and harsh winters. The public sector—both publicly owned businesses and municipalities—plays a dominant role in Greenland's economy. Greenland joined the European Community together with Denmark but withdrew in February of 1985 (after a referendum in 1982) due to disagreement with the EC over fishing policy.

FAROE ISLANDS.

The Faroe Islands (local name Foroyar) are north of the Shetlands and northwest of Scotland, between the Norwegian Sea and the North Atlantic Ocean. There are about 30 islands, 18 of which are inhabited, with a total 2000 population of 45,296. The total land area is 1,399 square kilometers (540 square miles). The population is mostly descended from Viking settlers who landed there in the 8th century. The local language is Faroese, descended from Old Norse, although Danish is also required in schools, and adults on the island can speak it. The capital of the Faroes is Torshavn.

The Faroes have been part of the Danish Kingdom since the 14th century, but were granted home rule in 1948, although the Danish government is still responsible for defense and other aspects of administration. Denmark's Folketing (Parliament) reserves 2 seats for representatives from the Faroes.

Despite their small and remote location, the Faroes have a good domestic and international communications infrastructure, with 22,000 main telephone lines—about one for every 2 people on the island. There is also a satellite earth station and a fiber-optic submarine cable that links the Islands to Iceland and Denmark. There are 14 radio stations and 7 television stations.

The mild winters, cool summers, and rocky terrain of the Faroes are unsuitable for agriculture, and in the past, sheep farming was very important to the economy. Nowadays fish and fish products are the center of the economy, with fish products comprising 90 percent of exports. Most other food is imported. This near-total dependence on fishing means the economy is very vulnerable, both to the changes in world demand and to environmental change. Even with the fishing industry, the Faroe Islands depend significantly on grants from Denmark. Without Danish government bailouts in 1992 and 1993, the Faroese economy would have gone bankrupt. The Faroes did not join the European Community (EC) when Denmark did, because of disagreement with EC fishing policies, which, the Faroese felt, put them at a disadvantage.

BIBLIOGRAPHY

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—Larisa Mann

CAPITAL:

Copenhagen.

MONETARY UNIT:

Danish krone (DKr). 1 Danish krone is made up of 100 øre. There are coins for 20, 10, 5, 2, and 1 krone and 50 and 25 øre. Paper currency comes in denominations of DKr1,000, 500, 200, 100, and 50.

CHIEF EXPORTS:

Machinery and instruments, meat and meat products, fuels, dairy products, ships, fish, and chemicals.

CHIEF IMPORTS:

Machinery and equipment, petroleum, chemicals, grain and foodstuffs, textiles, and paper.

GROSS DOMESTIC PRODUCT:

US$136.2 billion (purchasing power parity, 2000 est.).

BALANCE OF TRADE:

Exports: US$50.8 billion (f.o.b., 2000). Imports: US$43.6 billion (f.o.b., 2000).