I | INTRODUCTION |
Iceland (Icelandic, Ísland), island republic in
the North Atlantic Ocean, located between Greenland and Norway. The northern tip
of Iceland reaches the Arctic Circle. Iceland is roughly the size of the state
of Virginia. Oval in shape, Iceland measures about 485 km (300 mi) from east to
west and about 360 km (190 mi) from north to south. Unlike nearby Greenland,
Iceland is generally considered to be a part of Europe.
Geologically, Iceland is not very old. It was
formed by volcanic eruptions during the last 60 million years. A large number of
volcanoes are still active on the island. Earthquakes are frequent, and hot
springs bubble to the surface in volcanic areas, especially in the southwest.
Steam rising from hot springs in a southwestern bay gave rise to the name of
Iceland’s capital city, Reykjavík, which is an Icelandic term meaning “Smoky
Bay.” Today, abundant geothermal energy provides much of Iceland’s heating
needs.
Despite its northerly location, Iceland is not
an Arctic country. The island’s climate is tempered by the warm waters of the
North Atlantic Drift—a part of the Gulf Stream. The seacoast is open for ships
nearly all year-round. It is closed only in the north and east during the
winter, when ice descends from the polar region.
Icelandic culture derives from the island’s
9th century Viking settlers. Icelanders are proud of their Viking heritage, and
many people can trace their family roots to the earliest settlers. The Icelandic
language is closely related to Old Norse, the language of the Vikings, and it
has changed very little since ancient times. Because of this, Icelanders can
easily read the medieval Icelandic sagas—the history and folklore of
early settlers—in the language they were originally written (see
Icelandic Literature).
Icelanders inhabit a rugged land with few
mineral or agricultural resources. About three-quarters of the island is barren
of vegetation. Plant life consists largely of grasslands, which are grazed by
livestock, especially sheep, cattle, and sturdy Icelandic ponies. Many varieties
of fish live in the surrounding ocean waters, and the fishing industry has
traditionally been a cornerstone of Iceland’s economy. Today, fishing and fish
processing account for more than half of Iceland’s total exports.
II | LAND AND RESOURCES |
Iceland lies about 1,000 km (620 mi) west of
Norway and 300 km (185 mi) southeast of Greenland. It is encircled by the
Denmark Strait, the Norwegian Sea, and the Arctic and Atlantic Oceans. To the
southwest of Iceland lie the small Vestmannaeyjar Islands.
Iceland’s coast is indented by many bays and
fjords, except in the south, where the shore is mostly sandy. Three large
peninsulas jut out from Iceland’s west coast. The most prominent is Vestfjarda
Peninsula. Iceland’s coastline has a total length of 4,988 km (3,099 mi).
Iceland is located on a volcanically active
region of the Mid-Atlantic Ridge. Volcanic eruptions have created vast
uninhabitable lava tablelands with mountainous outcroppings. Elevations in the
uplands, which cover about half the country, average from about 610 to 915 m
(about 2,000 to 3,000 ft). Hvannadalshnúkur (2,119 m/6,952 ft), in the
southeast, is the highest summit.
Snowfields and glaciers cover nearly 15
percent of Iceland’s surface. Vatnajökull, a glacier in the southeast, has an
area of 8,456 sq km (3,265 sq mi). Iceland has numerous small lakes and many
swift-flowing rivers broken by dramatic waterfalls. None of the rivers is
navigable, but many hold significant waterpower potential.
Lowlands in Iceland are situated mainly along
the southwestern coast. Lowlands occupy about 25 percent of the island’s total
area. The bulk of the Icelandic population lives along the coast, particularly
in the southwest.
Iceland is remarkable for its numerous
volcanoes, craters, and hot springs, and for the frequency of its earthquakes.
More than 100 volcanoes, including at least 25 that have erupted in recorded
history, rise on the island. In 1963 a volcanic eruption off Iceland’s southern
coast created the small island of Surtsey. Among Iceland’s best-known volcanoes
are Hekla (1,491 m/4,892 ft), which has erupted many times, and nearby Laki,
with about 100 separate craters. Many eruptions have caused widespread
devastation, including the 1783 eruption of Laki in which more than 9,000
Icelanders died. Where ice fields overlay volcanoes, the latter sometimes erupt
through the ice, causing spectacular ice explosions.
Hot springs rise to the surface across
Iceland. Particularly numerous in the volcanic areas, the springs occur as
geysers (a word of Icelandic origin), as boiling mud lakes, and in
various other forms. The famous Geysir in south central Iceland—the oldest
geyser in recorded history and generally regarded as one of the most
spectacular—erupts at irregular intervals (usually from 5 to 36 hours), ejecting
a column of boiling water up to about 60 m (about 200 ft) in height. Most homes
and industrial establishments in the Reykjavík area are heated by water piped
from nearby hot springs.
A | Climate |
Although Iceland touches the Arctic Circle,
the island’s climate is relatively mild. This is because an ocean current called
the North Atlantic Drift carries relatively warm waters along Iceland’s shores.
As a result, climatic conditions are moderate across most of the island. The
mean annual temperature at Reykjavík is about 5° C (about 41° F), with a range
from -1° C (31° F) in January to 11° C (52° F) in July.
The northwestern, northern, and eastern
coastal regions are subject to the effects of polar currents and drifting ice,
and temperatures are generally lower. Violent windstorms are common during much
of the winter season. Annual precipitation ranges between about 1,270 and 2,030
mm (about 50 and 80 in) along the southern coast, but only about 510 mm (about
20 in) along the northern coast. The southern slopes of some of Iceland’s
interior mountains receive up to about 4,570 mm (about 180 in) of moisture per
year.
B | Plants and Animals |
Iceland does not sustain a great variety of
indigenous plants. Grasslands and heather (see Heath) are abundant along
the southern coast and provide pasturage for sheep and other livestock.
Extensive forests probably existed on the island in prehistoric times, but
present-day trees, such as birch and spruce, are relatively scarce. Bilberries
and crowberries are the only kinds of fruit native to the island.
The arctic fox was the only land mammal
living in Iceland at the time of the first human settlement. Ancient Viking
settlers brought a breed of pony to Iceland that today is called the Icelandic
pony, a surefooted, muscular animal that for centuries has been used as a beast
of burden. Reindeer were introduced about 1770; mice and other rodents were
brought in on ships. Neither reptiles nor frogs and toads are found. About 100
species of birds inhabit the island. Many of these species are aquatic, among
them the whistling swan and several varieties of duck. The eider duck is valued
for its down. Gulls are common along the seashore. Whales and seals live along
the coast, as do cod, haddock, halibut, and herring. Salmon and trout thrive in
Iceland’s freshwater rivers and lakes.
III | PEOPLE |
Icelanders are one of the most homogenous
peoples in the world. They are predominantly of Nordic origin, descendants of
the hardy people who emigrated from Norway to Iceland in the Middle Ages. There
are also some Celtic influences from Irish and Scottish immigrants who arrived
from the British Isles (see Celts). The population of Iceland (2008
estimate) is 304,367.
Numerous times in its history, Iceland has
suffered major population losses due to epidemics, volcanic eruptions, and
earthquakes. Beginning in the mid-20th century, many rural Icelanders began
moving to coastal towns and villages. Today, some 93 percent of the people now
live in cities and towns. About 60 percent of Iceland’s total population lives
in Reykjavík. The overall population density is 3 persons per sq km (7.8 per sq
mi).
A | Principal Cities |
Reykjavík (population, 2005 estimate,
113,022) is the capital and chief port. Other towns are Akureyri (16,308), on
the northern coast; Kópavogur (25,803), Hafnarfjörður (22,000), and Keflavík
(7,637), on the western coast near Reykjavík; and Vestmannaeyjar (4,640), on the
tiny island of Heimaey off the southern coast.
B | Religion and Language |
The state church of Iceland is the
Evangelical Lutheran church (see Lutheranism). About 90 percent of
Icelanders are affiliated with the church. Complete religious freedom exists,
however. Free Lutherans and Roman Catholics make up a small minority.
The language is Icelandic, which has
remained closer to the Old Norse of Iceland’s original Viking settlers than to
the other Scandinavian languages. See Icelandic Language; Icelandic
Literature.
C | Education |
Literacy in Iceland approaches 100 percent
of the adult population. Education is free through the university level and is
compulsory for all children between the ages of 6 and 16. The leading
institution of higher education is the University of Iceland (1911), in
Reykjavík. The country also has a technical college and colleges of agriculture
and music as well as teacher-training schools.
The principal libraries of Iceland are the
University Library, the National Library, and the City Library, all located in
Reykjavík. The capital is also the site of the Museum of Natural History; the
National Museum, containing a major collection of Icelandic antiquities; and an
art gallery housing the work of the Icelandic sculptor Einar Jónsson.
D | Literature and Culture |
Because the Icelandic language has
changed so little over the centuries, Icelanders can read literature produced in
Iceland during the 12th and 13th centuries with little difficulty. The most
famous Icelandic writings of this period are the sagas. Modern Icelandic writers
have produced a substantial body of literature. The Icelandic writer Halldór
Laxness won the Nobel Prize in literature in 1955. Laxness adapted the lyrical
beauty of the old Icelandic sagas to modern use in his novels about the people
of Iceland.
Contemporary Icelanders are prodigious
readers. It is said that the people of Iceland read more books per capita than
the people of any other country.
In medieval Iceland, the most widely
practiced crafts were woodcarving, silversmithing, and sculpturing in stone for
church decoration. Folk arts found expression in wood carvings and textiles.
Woodcarvings and tapestries from Iceland’s early history have been preserved in
the National Museum in Reykjavík.
In medieval times, church choral singing
was the dominant form of musical expression. Protestant hymns grew in importance
in the 17th century, following Iceland’s adoption of Lutheranism. Choir singing
remains very popular. Folk music, derived mainly from Nordic music, has a long
history in Iceland. Iceland’s folk traditions inspire vibrant pop and rock
genres in modern Iceland, including the music of the singer Björk and the
internationally famous folk band Islandica.
IV | ECONOMY |
Private enterprise forms the basis of the
economy of Iceland, but the government exercises a considerable degree of
control and supervision over key sectors. Until the close of the 19th century,
most people raised livestock and crops, with fishing as a supplementary source
of income. By the middle of the 20th century, however, fishing and fish
processing had become the major industries.
Hydroelectric and geothermal energy sources
are abundant in Iceland. Hydroelectric power has promoted the development of
modern industrial enterprises, including the energy-intensive aluminum industry.
Geothermal energy provides nearly all of Iceland’s heating and hot water needs.
In recent decades, Iceland’s economy has diversified into services, software
production, and biotechnology. The Iceland Stock Exchange (ICEX), founded in
1985, has encouraged the growth of financial services by establishing a platform
for domestic trading in equities, bonds, and mutual funds. Tourism has grown
steadily since the mid-20th century, and whale watching draws tens of thousands
of visitors every year.
In 1970 Iceland became a member of the
European Free Trade Association (EFTA) trading bloc established a decade earlier
by Austria, Denmark, the United Kingdom, Norway, Portugal, Sweden, and
Switzerland. Most Icelanders remain opposed to membership in the European Union
(EU), largely because of Iceland’s national interest in maintaining strict
control over its territorial fishing resources.
A | Agriculture |
Iceland’s landscape is generally
inhospitable for agriculture, and less than 1 percent of the island’s total land
area is under cultivation. However, about 20 percent of the land is suitable for
livestock grazing. Sheep farming has always been the most important form of
animal husbandry. In the summer, the sheep graze in pastures and in the
mountains. In the fall, they are driven into pens and sorted according to
owners’ marks, as they have been for centuries. Iceland produces large
quantities of dairy products, wool, mutton and lamb, and chicken eggs. Hay is
the most important fodder crop.
Iceland’s principal food crops include
turnips and potatoes. A variety of flowers, vegetables, and fruits are grown in
greenhouses heated by hot springs.
B | Fishing |
Fishing and fish processing are the most
important Icelandic industries. Food products, including fresh and processed
fish, account for 62 percent of Iceland’s exports.
Iceland is one of the world’s leading
producers of cod. Other major products of Iceland’s fishing industry include
capelin, haddock, crustaceans, herring, redfish, and saithe (see
Pollock). Large fish processing plants operate in many coastal towns.
Fishery protection is a major concern for
Icelanders. In 1975 Iceland extended its territorial fishing zone from 80 km (50
mi) to 320 km (200 mi) from the coastline in an attempt to protect its fisheries
from foreign fleets, especially British trawlers. The controversial move led to
a so-called Cod War with the United Kingdom, the third and most serious such
conflict since the late 1950s. But Britain, along with other European
governments, eventually recognized the new limit.
In response to international pressure,
Iceland suspended all whaling operations in 1989. However, Iceland strongly
condemned the international moratorium on whaling imposed by the International
Whaling Commission (IWC) in 1986 (see Whaling). In 1992 Iceland withdrew
from the IWC (although it was reinstated as a member in 2002). In 1999 Iceland’s
legislature, the Althing, recommended the resumption of whaling. Icelandic
lawmakers disputed the designation of some species of whales as endangered and
claimed that other species threatened Iceland’s commercial fish population. In
August 2003 Iceland resumed limited whaling, claiming the hunt was for
scientific purposes. The move provoked widespread international criticism.
Iceland came under further criticism in 2006 when the fisheries ministry
announced that it was resuming commercial whaling. The ministry said Iceland was
dependent on marine resources and would keep its catch within sustainable limits
by taking 9 fin whales (an endangered species) and 30 minke whales each
year.
C | Mining |
Iceland has few mineral resources, and
profitable development has been difficult. Minerals of commercial value include
pumice, diatomite, and spar—a transparent mineral sold to optical companies.
Icelanders manufacture large quantities of cement for concrete, a material from
which most modern buildings in Iceland are constructed due to the lack of forest
cover on the island.
D | Manufacturing |
Aside from fish processing, manufacturing
is largely for domestic consumption needs. Principal products include clothing,
shoes, soaps, and chemicals. Book production is also a large trade in Iceland.
Some electrical appliances are made. In addition, plants producing aluminum
(from imported bauxite) and ferrosilicon have been established to take advantage
of Iceland’s abundant energy resources.
E | Currency and Banking |
The monetary unit of Iceland is the króna,
consisting of 100 aurar (70.20 krónur equal U.S. $1; 2006). Currency is issued
by the state-owned Central Bank (1961).
F | Foreign Trade |
The yearly value of Iceland’s imports is
often greater than that of its exports, although the country’s foreign trade
balances occasionally. In 2004 imports cost $3.6 billion, and exports earned
$2.8 billion. Major imports include refined petroleum, machinery, transportation
equipment, textiles and clothing, chemicals, basic manufactures, and foodstuffs.
Exports of metal and ores, including a significant amount of aluminum, account
for 19 percent of total exports. The country’s main trade partners are the
United Kingdom, the United States, Germany, Denmark, the Netherlands, Sweden,
France, Norway, and Japan.
G | Transportation and Communications |
Iceland has 12,972 km (8,060 mi) of roads.
Most roads are located in coastal areas. The island has no railroads or
navigable rivers. The country has several seaports, including Arkanes, Keflavík,
Reykjavík, and Siglufjörður. Icelandair, the national airline, provides domestic
and international air service, and is one of Iceland’s largest employers.
There are three daily newspapers published
in Iceland, with a combined circulation of about 100,000. They are
Frettabladid, Morgunbladid, and DV. Telephone and telegraph
services are owned and administered by the government; the state monopoly on
radio and television broadcasting ended in 1986. Public television and radio
broadcasting networks are operated by the Icelandic National Broadcasting
Service.
V | GOVERNMENT |
Iceland is governed under a constitution that
became effective when the country achieved full independence from Denmark in
1944. Iceland has no official armed forces of its own except for a small number
of coast guard personnel. Iceland is a member of the North Atlantic Treaty
Organization (NATO), and it permits the United States to base military forces on
the island.
A | Executive |
The head of state of Iceland is a
president, who is elected by universal suffrage by persons aged 18 and older to
a four-year term. The president has little formal power. The country’s chief
executive is a prime minister, who is responsible to the parliament. The prime
minister, assisted by a cabinet of ministers, holds real executive power.
B | Legislature |
The parliament of Iceland is the Althing,
which has met almost continually since its establishment in ad 930. The Althing is considered the
oldest parliament in Europe and is often referred to as “the grandmother of
parliaments.” The power of the Althing declined after 1262, and it ceased to
function from 1800 to 1843—the year it became a consultative assembly. It
regained the full powers of a legislature in 1904.
The Althing was converted from a bicameral
to a unicameral system in 1991. It has 63 members, 54 elected to four-year terms
under a system of proportional representation and 9 allotted to the political
parties based on their relative vote totals in the elections.
C | Political Parties |
The leading political organizations of
Iceland are the center-right Independence Party; the social democratic Alliance
coalition; the Progressive Party, a liberal agrarian group; the Left-Green
Movement; and the free-market oriented Liberal Party. Governments in Iceland are
generally formed by coalitions.
D | Local Government |
Iceland is divided into about 100
municipalities. The municipalities have significant autonomy and administer many
important local affairs. These include responsibility for primary and secondary
education; infrastructure, such as road maintenance, electric power, and water
supply; and the provision of health and social welfare. Each municipality is
governed by an elected council.
E | Judiciary |
The highest tribunal of Iceland is the
supreme court, made up of a chief justice and seven other justices appointed by
the president. Other judicial bodies include district and special courts.
VI | HISTORY |
Irish monks are known to have visited
Iceland before ad 800, but it
remained largely unsettled until about 870. Norwegian Viking Ingólfur Arnarson
is generally considered the first permanent settler. Arnarson established his
farm at Reykjavík, now the capital.
During the next 60 years, other settlers
flocked to the island from the Scandinavian countries and the British Isles. In
930 Icelanders set up their first central governing assembly, the Althing.
A | Headless State |
The commonwealth founded by the Icelanders
was a republic without executive authority or any head of state. Legislative and
judicial powers were wielded by the Althing, but enforcement was the
responsibility of the aggrieved party, sometimes assisted by a powerful
chieftain. Nevertheless, the state prospered for more than 300 years. The land
had ample resources of fish, seal, and fowl, and grazing lands were extensive.
Icelandic traders were active in Scandinavia, the continental European
countries, and the British Isles, and culture flourished in a golden age that
produced the great body of medieval Icelandic literature. Late in the 10th
century Icelanders colonized Greenland, and early in the 11th century, according
to one tradition, Leif Eriksson, the Icelandic explorer, reached the shores of
North America (Vinland), although attempts at settlement there were
frustrated.
Icelanders accepted Christianity by
arbitration in 1000, and the church gradually destabilized secular authority.
Notably, it undermined the old political order, in which the pagan priests
served as secular chieftains (see Paganism). Furthermore, the church
sought foreign support in its struggle with secular powers. Iceland was under
the archbishopric of Nidaros (now Trondheim), Norway. King Håkon IV of Norway,
aided by the internal squabbles of Icelandic politicians, ruthlessly exploited
the situation. In 1262-1264 his ambition was fulfilled when Icelanders
recognized him as their king.
B | Foreign Domination and Decline |
Foreign domination brought with it a long
decline of Icelandic fortunes. This was especially true after the country, along
with Norway, passed to the Danish crown in 1380. As Denmark sought to expand its
shipping and commerce, it did not want the lucrative Icelandic trade to flow to
England or Germany, the two countries that had the greatest interest in the
island. Gradually, the Danish managed to reduce the trading activities of these
nations in Iceland, and by the middle of the 16th century they had virtually
ceased. At the same time, the royal authority greatly increased its interference
in other spheres of Icelandic life.
In 1550 Lutheranism was forced on the
nation, a feat crowned with the execution without trial of the last Roman
Catholic bishop, Jón Arason, and two of his sons. Half a century later, in 1602,
a trade monopoly was instituted. From that time until 1787, commerce with
Iceland was permitted only to licensed merchants, who would buy their charters
from the Crown for exorbitant fees with the knowledge that they could recoup
their investment manifold from their captive customers. Consequently, prices for
necessities, such as grains, lumber, and metal goods, soared, while Icelandic
products—mostly wool and fish—were undervalued because their prices were
established by the same merchants. In the long run, this system of economic
oppression reduced Iceland to utter destitution.
C | Autocracy |
In 1660 King Frederick III of Denmark
assumed autocratic powers in his homeland. Two years later Icelandic leaders
were forced, under threat of arms, to accept the absolute monarchy in Iceland.
The abrogation of the Althing’s legislative powers, as well as the denial of its
judicial role, quickly followed. The country now stood stripped of all political
power.
During the 18th century, Icelanders
reached the lowest point of their national existence. At the end of the Age of
Settlement in 930, some 60,000 to 90,000 people are estimated to have lived in
the country. By the early years of the 18th century, when the first national
census was taken, the population was down to 50,000. A series of disasters,
including a smallpox epidemic in 1707-1709, famines in the middle of the
century, and the eruption of the volcano Laki in 1783, further reduced the
nation to some 35,000 inhabitants, most of them paupers. Due to such hardship,
Denmark seriously considered evacuating all the remaining Icelanders to the
heathlands of the Jutland Peninsula.
D | Turning Point |
In the 18th century, however, national
fortunes reached a turning point. Shortly after the middle of the century an
enterprising Icelandic official established some cottage industries in
Reykjavík, then a mere collection of huts. Although his effort eventually
failed, it provided inspiration for other attempts that improved conditions in
the country. The first tangible sign of this was the modification of the trade
monopoly in 1787, allowing commerce with any Danish subject.
Although the 19th century began with the
total suspension of the Althing, it eventually became an age of reawakening. The
waves of revolution on the European continent brought about the end of
absolutism in Denmark, and soon the Icelanders began to clamor for their own
national rights. In this struggle they were led by the scholar-politician Jón
Sigurdsson, now revered as a national hero. The Althing was reconvened in 1843;
trade was made free to all nations in 1854; and 20 years later a new
constitution was promulgated, granting the Althing partial control over domestic
finances.
E | Rapid Progress |
Until this time, the Icelandic economy had
remained practically medieval. With financial authority established within the
country, Iceland began to progress at a relatively fast pace. At the same time
the struggle for independence continued. In 1904 Iceland attained home rule, and
in 1918 Denmark finally recognized Iceland’s status as an independent kingdom.
For the next 25 years, however, under the Treaty of Union, it was bound to
Denmark in a personal union under Christian X. During this time, until World War
II (1939-1945), great economic strides were made, despite the lean years of the
worldwide depression.
When Denmark was occupied by Nazi Germany
in April 1940, Iceland was cut off from its head of state. A month later, it,
too, was occupied, but by British troops. In May 1941 the Icelandic government
appointed Sveinn Björnsson, a former minister to Denmark, as regent.
The Treaty of Union ran out in 1943, and
by early 1944, given that Denmark was still occupied, Icelanders decided to act
unilaterally to terminate it. In a national referendum, with 98.6 percent of
eligible voters participating, 97.3 percent voted to sever all ties with
Denmark, and 95 percent chose a republic. The Icelandic republic was accordingly
proclaimed at Thingvellir on June 17, 1944, with Sveinn Björnsson as the first
president.
F | Free but Occupied |
Paradoxically, Iceland celebrated its
final deliverance from alien rule while still occupied by another foreign power.
In 1941 the Icelandic government had been pressed by Britain and the United
States to ask for U.S. protection, primarily to free the British occupation
troops for service elsewhere. Contrary to contractual obligations, however, the
United States did not withdraw its forces at the end of the war, instead
requesting permanent military bases in the country. These were refused. A
compromise agreement was made in 1946, permitting the United States control of
the Keflavík airport for six and a half years. Before that pact expired, Iceland
became a founding member of the North Atlantic Treaty Organization (NATO), and
in 1951, during the Korean War, the United States again obtained Icelandic
permission to station troops in the country, this time under a NATO umbrella.
This U.S. presence in Iceland,
uninterrupted since 1941, has been profoundly divisive for Icelanders; while
overwhelmingly sympathetic to Western democracies, Icelanders remain split on
the issue of basing U.S. troops on their land. In 1985 the Althing unanimously
passed a resolution declaring Iceland a nuclear-free zone, a measure that banned
the entry of nuclear weapons into Iceland.
G | Protecting the Fisheries |
Another fundamental question of national
existence since World War II has involved Iceland’s efforts to protect its
fisheries from foreign fleets. In 1958 Iceland decided to extend its fisheries
jurisdiction from 6 to 20 km (4 to 12 mi); the British responded by sending
warships to protect their trawlers in Icelandic waters. A so-called Cod War that
resulted lasted until 1961, but it was renewed with two extensions of Icelandic
jurisdiction over adjacent waters—to 80 km (50 mi) in 1972 and 320 km (200 mi)
in 1975. The last extension triggered the most serious of the cod wars, a
conflict that resulted in casualties. In 1976 Iceland temporarily severed
diplomatic ties with Britain, marking the first such break between two NATO
members. It was not until 1977 that Icelanders finally became the undisputed
masters of their most vital resources.
Since that time, however, Iceland has
become embroiled in several heated fishing disputes with other countries in
areas near its territorial waters. In the early 1990s, a conflict between
Iceland and Norway broke out over fishing rights in a part of the Barents Sea
claimed by Iceland. A similar dispute arose between Iceland and Denmark in 1996
over fishing rights in waters between Greenland and Iceland.
Despite Iceland’s success in securing
exclusive rights to its enlarged territorial fishing grounds, the mechanization
of the fishing industry eventually took a heavy toll on fish stocks. Overfishing
in the 1970s and 1980s led to a decline by about one-third to one-half of the
most valuable fishing stocks in Icelandic waters. Declining revenues caused by
overfishing, combined with high inflation and excessive borrowing abroad,
resulted in a prolonged period of high inflation and low economic growth in
Iceland. Efforts to limit overfishing, including restrictions on cod fishing and
a reduction in the size of Iceland’s fishing fleet, produced some signs of a
recovery in fish stocks. As a result, Iceland increased fishing quotas in the
1990s and early 2000s.
H | Recent Political Developments |
In 1980 Vigdís Finnbogadóttir was elected
president, becoming the world’s first popularly elected female head of state.
She served until 1996, when she was replaced by Ragnar Grímsson. In 2000 the
parliament voted to give Grímsson a second term in office without an election,
due to the president’s popularity and the lack of opponents.
In September 2004, Halldór Ásgrímsson,
leader of the liberal and agrarian-oriented Progressive Party, took over as
prime minister, leading a coalition government with the center-right
Independence Party. Ásgrímsson’s rise to the post of prime minister was part of
a deal that permitted the Progressive Party/Independence Party coalition to
remain in power. Ásgrímsson’s predecessor, Independence Party leader David
Oddsson, had served as Iceland’s prime minister since April 1991. Oddsson became
foreign minister in the new government.
Ásgrímsson was succeeded by Geir Haarde of
the Independence Party in June 2006. Haarde remained prime minister following
May 2007 parliamentary elections. The results of that election, however,
necessitated an end to the partnership between the Independence Party and the
Progressive Party. Instead, Haarde fashioned a coalition between the
Independence Party and the Social Democrats. The elections saw the Progressive
Party lose seats, declining from 12 to 7, while the Independence Party increased
its total from 22 to 25, and the Social Democrats won 18 seats.
I | Outlook |
During the 1990s and early 2000s Iceland’s
economy experienced significant economic growth, spurred in part by the
diversification of manufacturing and services. New industries, including
software development, biotechnology, and financial services have become
important elements of Iceland’s growing economy. Today, Icelanders enjoy a
standard of living among the highest in the world. One key to Iceland’s modern
success is its high standard of education and cultural life. Despite hundreds of
years of abject poverty, most Icelanders remained literate and educated. Thus,
they were well-prepared to adapt quickly to new technological trends of the 20th
and early 21st centuries.
The rapid economic advancement of Iceland
has not been matched by corresponding progress in the political arena. For most
of the 20th century, Iceland was governed by shifting coalitions of four
political parties, whose candidates were elected to parliament based on an
electoral system that gave rural areas substantial overrepresentation in the
legislature. As a result, agrarian interests have held considerably more
influence in Iceland than in other Nordic countries. This bias is in part
responsible for delays in legislative reforms aimed at enhancing efficiency in
agriculture, the fisheries, banking and finance, and other areas. It also helps
explain why Iceland, nearly alone in Europe, has expressed little interest in
joining the European Union (EU), even though EU member nations constitute
Iceland’s most important trading partners.
Environmental issues appear to
increasingly concern Icelandic voters. Although Iceland’s economy has been
invigorated in recent years by the growth of an aluminum smelting industry,
voters in the May 2007 parliamentary elections sent a cautionary note about the
possible environmental impact of the industry. Voters punished the Progressive
Party, which advocated the continued building of smelters by foreign aluminum
companies such as ALCOA, while electing Social Democrats and Left Greens, who
called for a halt in construction while environmental impact studies are
performed.
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