ICELAND

Republic of Iceland

Lveldi Ísland

CAPITAL: Reykjavík

FLAG: The national flag, introduced in 1916, consists of a red cross (with an extended right horizontal), bordered in white, on a blue field.

ANTHEM: O Guð; vors lands (O God of Our Land).

MONETARY UNIT: The new króna (k), introduced 1 January 1981 and equivalent to 100 old krónur, is a paper currency of 100 aurar. There are coins of 5, 10, and 50 aurar and 1, 10 and 50 krónur, and notes of 10, 50, 100, 500, 1,000 and 5,000 krónur. k1 = $0.01571 (or $1 = k63.65) as of 2005.

WEIGHTS AND MEASURES: The metric system is used.

HOLIDAYS: New Year's Day, 1 January; Labor Day, 1 May; National Holiday, 17 June; Bank Holiday, August; Christmas, 25–26 December. Movable religious holidays include Holy Thursday, Good Friday, Easter Monday, Ascension, and Whitmonday. Half-holidays are observed on Christmas Eve, 24 December, and New Year's Eve, 31 December.

TIME: GMT.

LOCATION, SIZE, AND EXTENT

Iceland, the westernmost country of Europe, is an island in the North Atlantic Ocean, just below the Arctic Circle and a little more than 322 km (200 mi) e of Greenland, 1,038 km (645 mi) W of Norway, and 837 km (520 mi) nw of Scotland. It has an area of 103,000 sq km (39,769 sq mi), extending 490 km (304 mi) e–w and 312 km (194 mi) n–s. Comparatively, the area occupied by Iceland is slightly smaller than the state of Kentucky. The total length of coastline is about 4,988 km (3,099 mi). The republic includes many smaller islands, of which the chief are the Westman Islands (Vestmannaeyjar) off the southern coast.

Iceland's capital city, Reykjavík, is located on the country's southwest coast.

TOPOGRAPHY

Iceland consists mainly of a central volcanic plateau, with elevations from about 700 to 800 m (2,297–2,625 ft), ringed by mountains, the highest of which is Hvannadalshnúkur (2,119 m/6,952 ft), in the Örfajökull glacier. Lava fields cover almost 11% of the country, and glaciers almost 12%. Among the many active volcanoes there is an average of about one eruption every five years. The largest glacier in Europe, Vatnajökull (about 8,400 sq km/3,200 sq mi), is in southeast Iceland. There are also many lakes, snowfields, hot springs, and geysers (the word "geyser" itself is of Icelandic origin).

The longest river is the Thjórsá (about 230 km/143 mi) in southern Iceland. Most rivers are short and none are navigable, but because of swift currents and waterfalls, Iceland's rivers have important waterpower potential. There are strips of low arable land along the southwest coast and in the valleys. Good natural harbors are provided by fjords on the north, east, and west coasts.

CLIMATE

Despite Iceland's northern latitude, its climate is fairly mild because of the Gulf Stream, part of which almost encircles the island. There are no extreme temperature variations between seasons, but frequent weather changes are usual, particularly in the south, which experiences many storms and heavy precipitation. Temperatures at Reykjavík range from an average of 11°c (52°f) in July to -1°c (30°f) in January, with an annual mean of about 5°c (41°f). Humidity is high, and there is much fog in the east. Annual rainfall in the north ranges from 30 to 70 cm (12–28 in); in the south, 127–203 cm (50–80 in); and in the mountains, up to 457 cm (180 in). Winters are long and fairly mild, summers short and cool. Summer days are long and nights short; in winter, days are short and nights long.

FLORA AND FAUNA

Although there are a few small trees (ash, aspen, birch, and willow), the chief forms of vegetation are grass, mosses, and small shrubs (heather, willow, dwarf birch). Some 340 different species of flowers have been listed, but most of these are sparse.

The fox, the chief indigenous animal, is common. Wild reindeer, introduced in the 18th century and once abundant, were almost exterminated and therefore have been protected in recent years; they are found chiefly in the northeastern highlands. The waters around Iceland abound in whales, many types of seals, and many kinds of fish. Dolphin, grampus, porpoise, and rorqual are numerous. Cod, haddock, and herring are particularly abundant, but there are also sole, shark, halibut, redfish, saithe, and other fish. Salmon abound in many rivers and trout in rivers and lakes. There are about 88 species of breeding birds; most are aquatic. The chief resident birds are eiderduck (raised commercially for their down) and ptarmigan. Other characteristic indigenous birds are swan, eagle, falcon, and gannet, all rare now and protected. Iceland has no reptiles or frogs and very little insect life.

ENVIRONMENT

Because of Iceland's sparing use of hydrocarbon fuels, its air is cleaner than that of most industrialized nations. However, its water supply is polluted by excessive use of fertilizers (current estimates put Iceland's yearly usage of fertilizers at 2,500 lbs per acre). Population increases in the cities also contribute to water pollution. Iceland has 170 cu km of renewable water resources with 6% used for industrial purposes. Industrial carbon dioxide emissions totaled 2.1 million metric tons per year in 1996. Protected lands, which account for 9.5% of Iceland's total land area, include four national parks, with a total area of 619,300 hectares (1,530,315 acres) and 27 nature reserves, covering 256,861 hectares (634,714 acres). Principal environmental responsibility is vested in the Ministry of Social Affairs.

According to a 2006 report issued by the International Union for Conservation of Nature and Natural Resources (IUCN), threatened species included 7 types of mammals and 8 species of fish. Endangered species include the leatherback turtle and four species of whales. The great auk has become extinct.

POPULATION

The population of Iceland in 2005 was estimated by the United Nations (UN) at 295,000, which placed it at number 168 in population among the 193 nations of the world. In 2005, approximately 12% of the population was over 65 years of age, with another 23% of the population under 15 years of age. There were 100 males for every 100 females in the country. According to the UN, the annual population rate of change for 2005–10 was expected to be 0.8%, a rate the government viewed as satisfactory. The projected population for the year 2025 was 335,000. Iceland is one of the least densely populated countries in the world, with an overall population density of 3 per sq km (7 per sq mi). The interior of the country is largely uninhabited.

The UN estimated that 94% of the population lived in urban areas in 2005, and that urban areas were growing at an annual rate of 0.71%. The capital city, Reykjavík, had a population of 184,000 (more than half the nation's population) in that year. The next largest towns and their estimated populations are Kópavogur (25,291), south of Reykjavík; Hafnarfjördur (21,300), about 10 km (6 mi) from Reykjavík; and Akureyri (16,475), on the north coast.

MIGRATION

Little immigration has occurred since the original settlement in the 9th and 10th centuries. In the last quarter of the 19th century, because of unfavorable economic conditions, about 12,000 residents of Iceland emigrated to Canada and the United States. After 1900, net emigration decreased substantially.

As of 1997, just 375 refugees had arrived in Iceland since 1956. During the Kosovo crisis, Iceland offered to take up to 100 refugees under the UNHCR/IOM Humanitarian Evacuation Programme. A total of 70 people were actually evacuated to Iceland, 16 of whom returned to Kosovo by 1999. There were 16,000 migrants living in Iceland in 2000. In 2004 Iceland had 239 refugees, and 19 asylum seekers. In 2005 the net migration rate was estimated as 2.06 migrants per 1,000 population. The government views the migration levels as satisfactory.

ETHNIC GROUPS

The population is almost entirely Icelandic, many of whom descended from the Norse and Celtic settlers who came in the late 9th and early 10th centuries.

LANGUAGES

Icelandic, the national language, derives from the Old Norse language that was spoken throughout Scandinavia at the time of settlement. It has changed little through the centuries, partly because of the country's isolation and partly because of the people's familiarity with the classical language, as preserved in early historical and literary writings. There is comparatively little difference between the old language and the modern, or between the written language and the spoken. To this day, Icelanders are able to read the great 13th-century sagas without special study.

RELIGIONS

The Church, the national church, is endowed by the state, but there is complete freedom for all faiths, without discrimination. All of Iceland constitutes a single diocese of the national church, headed by a bishop with his seat at Reykjavík; there are 281 parishes. As of 2004, about 86% of the population were nominally members of this established church, though it is believed that most do not practice actively. A 2003 Gallup poll indicated that 43% of Lutherans did not attend church at all and only 10% said that they attend church one or more times a month. About 4.3% of the population belong to one of three Lutheran Free Churches: the Reykjavík Free Church, the Hafnarfjordur Free Church, or the Reykjavík Independent Church. Another 4.4% (about 13,025 people) belong to one of 21 different denominations that are registered and recognized by the state. The largest of these groups is the Roman Catholic Church (5,582 members); the smallest is the First Baptist Church (10 members). Seventh-Day Adventists, Jehovah's Witnesses, Buddhists, Baha'is, Muslims, and Jews are also represented by small congregations.

TRANSPORTATION

There are no railways or navigable inland waters. All important towns and districts can be reached by bus and truck via interurban roads. In 2004, Iceland's roadway system totaled 13,004 km (8,088 mi), of which only 4,331 km (2,694 mi) were paved or were surfaced with oiled gravel. Registered passenger cars in 2003 numbered 161,721 and there were 27,977 commercial vehicles.

In 2005, Iceland's merchant marine fleet consisted of three ships of 1,000 GRT or more, with a total capacity of 4,341 GRT. In addition, there are about 1,000 civilian vessels, mostly small fishing craft. Most of the import and export trade is handled in Reykjavík. Akureyri, on the north coast, is the largest port serving the outlying areas.

Iceland had an estimated 98 airports in 2004, of which 5 had paved runways as of 2005. The principal airport is Keflavik at Reykjavík. In the 1950s, Icelandic Airlines was the first transatlantic airline to offer fares drastically lower than those of the major carriers. Icelandair, formed by a merger of Icelandic Airlines and Iceland Air in the early 1970s, operates domestic routes as well as international flights to the United Kingdom, Scandinavia, and Germany, and transatlantic flights with stopovers at Reykjavík. In 2001 (the latest year for which data was available), 1,357,900 passengers were carried on scheduled domestic and international flights.

HISTORY

Iceland's first known settler, Ingólfur Arnarson, sailed from his native Norway to Iceland and settled at what is now Reykjavík in 874. During the late 9th and early 10th centuries, the island was settled by other Norwegians fleeing the oppressive rule of their king and by smaller groups of Scottish and Irish emigrants. In 930, a central legislative and judicial assembly, the Althing, was established, and a uniform code of laws for the entire country was compiled. Christianity was introduced in 1000, but the memory of the old pagan religion was preserved in 12th and 13th-century Icelandic literature. Many of the early settlers were great seafarers and continued their westward voyages of discovery and exploration from Iceland. Most famous of these were Eric the Red (Eiríkur Thorvaldsson), who discovered and settled in Greenland in 982, and his son Leif Ericsson (Leifur Eiríksson), who around the year 1000 discovered the North American continent, which he called Vinland ("wineland") because of the grapes he found there. Icelanders acknowledged the sovereignty of Haakon IV of Norway in a treaty of 1262, which established a purely personal union, ending the independent republic or commonwealth in Iceland. When all the Scandinavian countries came under the rule of Denmark at the end of the 14th century, Iceland became a Danish dominion. Lutheranism was introduced in the 1540s. Exclusive trading rights with Iceland were given in 1602 to a private Danish trading company. Danes had a complete monopoly of trade with Iceland until 1786, when trade was opened to all subjects of the kings of Denmark, including Icelanders.

The last decades of the 18th century were a period of economic ruin for Iceland, compounded by poor harvests, epidemics, and volcanic eruptions (notably that of 1783, the worst in Iceland's history); the population dwindled to 38,000 by 1800, less than half the number in the period of independence. In that year, the king abolished the Althing, long since reduced in power. Within a few decades, however, a nationalist movement had attained considerable strength, winning the reestablishment of the Althing (but only as an advisory body) in 1843, followed by the opening of trade with all countries in 1854. After a long constitutional struggle—led by a national hero, Jón Sigurðsson, who was both statesman and scholar—limited home rule was granted in 1874, and almost complete home rule in 1903. By agreement with Denmark in 1918, Iceland was declared a free and independent state, but personal union with the Danish crown was retained. The Danish king continued to function as king of Iceland, and Denmark conducted Iceland's foreign affairs; but Iceland had the right to terminate this union after 25 years.

Cut off from Denmark during World War II by the German occupation of that country, Iceland established diplomatic relations with the United Kingdom and the United States. British forces took over the protection of the island in 1940 and were replaced the following year by US troops that remained in Iceland until early 1947. In a referendum held in May 1944, more than 97% of those participating voted to end the union with the king of Denmark and, on 17 June 1944, Iceland became an independent republic. In 1946, it was admitted to UN membership. Three years later, Iceland became a party to the Atlantic Pact (NATO), and a bilateral defense agreement was signed in 1951 providing for a US military presence. In March 1970, Iceland joined EFTA, and a tariff agreement was ratified with the EC in February 1973. To protect its fishing industry, Iceland unilaterally extended its fishing zone in 1958, and again in 1972 and 1975, provoking conflict with the United Kingdom and other countries. Casualties resulted from the most serious outbreak of the "cod war" with the United Kingdom in late 1975 and in February 1976. An agreement ended the conflict in June 1976 and relations with the United Kingdom improved. Disputes over fisheries resources have also arisen with the Norwegians periodically, though both Norway and Iceland are united in their opposition to the international ban on whaling.

In 1985, the parliament unanimously voted to declare Iceland a nuclear-free zone, banning any deployment of nuclear weapons. Reykjavík was the scene of the October 1986 summit meeting between US president Ronald Reagan and Soviet leader Mikhail Gorbachev on arms control and nuclear disarmament.

Depressed world fish prices weakened the economy in the early 1990s, resulting in a no-growth GDP and higher unemployment. A number of factors have combined to reinvigorate the Icelandic economy. The government launched an austerity program to trim the Icelandic welfare state which included measures such as increasing the retirement age from 65 to 67 years of age (with future increases to age 70 envisioned). Icelanders are also being asked to pay for a greater portion of social services out of their own pockets. Demand in Europe and the United States for Icelandic fish has rebounded and fish exports account for 70% of exports and 50% of foreign earnings. Liberalization of many sectors of the economy such as telecoms and banking, required under the EEA (European Economic Area) agreement with the European Union in exchange for greater access to the EU market, has reduced public expenditures and positively affected governmental finances. By 1999, Iceland had experienced four years of more than 5% GDP growth, and purchasing power was increasing at four times the OECD average. Unemployment had dropped to 2%, and Iceland has dealt with its labor shortage by initiating labor immigration from the Philippines. The economic boom years from 1996–2001 slowed in 2002, and Iceland experienced a mild recession with a GDP growth rate of -0.5%. Growth of GDP increased from 2003–05, however, nearing 6% by 2005.

Iceland was in the international headlines at the end of 1998 for altogether different reasons. In December 1998, the Icelandic parliament agreed after two full revisions of the legislation to create a health database of medical records of all Icelanders for use by a private company seeking to decode the human genome. Iceland's isolated, homogeneous population is a boon to medical researchers seeking to decode the genetic sequences of many hereditary diseases, but the lack of informed consent by individuals in the legislation became a heated political issue.

A public opinion poll taken in June 2002 indicated a 50–50 split between supporters and opponents of EU membership. However, conservative Independence Party leader and Prime Minister Davíð Oddsson remained resolutely opposed to EU membership, stating in 2002 that Iceland's affairs should not be dictated by conditions in "Paris or Berlin." Oddsson in 2005, however, indicated in a speech that a policy change was not ruled out depending upon how the EU evolved.

Iceland rejoined the International Whaling Commission in 2002 with reservations. It declared it would engage in whaling for scientific purposes, and resume commercial whaling of Minke and Fin whales after 2006.

President Ólafur Ragnar Grímsson was reelected president in June 2004. In September of that year, Prime Minister Davíð Oddsson switched positions with Foreign Minister Halldór Ásgrímmson. Oddsson had held the position of prime minister for a record 13 years.

GOVERNMENT

Iceland is an independent republic. Executive power is vested in the president and the government, legislative power in the president and the legislative assembly (Althing). The president is elected by universal suffrage for a four-year term. Effective executive power is exercised by a prime minister enjoying the confidence of the Althing: the prime minister is appointed by the president, and the prime minister in turn selects a cabinet composed of ministers responsible to the Althing for their acts. The president must sign all legislation before it becomes law.

All citizens who have reached the age of 18 may vote, provided they have resided in Iceland for the five years immediately preceding an election. In 2003, 87.5% of Icelanders eligible to vote in the parliamentary elections did so. By a system of proportional representation, voters elect the 63 members of the unicameral (since 1991) Althing from eight constituencies at a general election held every four years, but sooner if the governing coalition loses its ability to command a legislative majority. Because of the widely varying populations of the constituencies (Reykjavík constitutes one-third of the nation's population), each constituency has a minimum of five seats, and more populous regions have more. Three-quarters of the seats in any constituency are divided by the parties according to proportional representation of that region, while the final quarter of the seats in each constituency are apportioned according to the national vote tally to ensure national proportional representation. Any citizen qualified to vote is eligible to run for a seat in the Althing. When any amendment to the constitution is voted, the Althing is dissolved and new elections are held; if the new Althing accepts the proposed amendment, it becomes law when ratified by the president.

The institution of the Althing has parliamentary immunity and its members swear allegiance to the constitution. Government ministers are normally members of the Althing and enjoy full parliamentary privileges. The constitution and the rules of procedure of the Althing specify the rights and duties of parliamentarians, and the legislative year of the Althing begins on 1 October. The legislative agenda of the Althing is divided among 12 standing committees. At the first meeting following the inauguration ceremony, the president of the Althing is elected. In addition to acting as the chief executive of Althing, the president sits on the five-person presidium along with the four vice presidents. The presidium is responsible for the organization of parliamentary activities. Sessions of the Althing are normally held four days a week.

POLITICAL PARTIES

No one major party in recent years has been able to command a majority of the electorate, and coalition governments have been the rule. Principal parties include the Independence Party (Sjálfstoeðisflokkurinn) (IP), a conservative grouping; the Progressive Party (Framsóknarflokkurinn) (PP), an agrarian, left-center party; the Progressive Alliance (Althýðubandalag) (PA), a formerly Communist-oriented party, now a far-left party; and the Social Democratic People's Party (Althýðuflokkurinn) (SDP), a center-left group. An Independence Party splinter group, the Citizens' Party (CP), lost its parliamentary representation by securing no seats. Iceland is unique among the Nordic states (which lead the OECD countries on all indicators of gender equality) in that it is the only one to have a women's party, which has gained a foot-hold in parliament. In 1995, the Icelandic Women's Alliance, a political party devoted to feminist issues, gained three seats in the Althing.

Of these parties, the Independence Party dates back to 1929, and the Progressive and Social Democratic People's (formerly Labor) parties to 1916; all three have been the source of various splinter groups. The People's Alliance became a distinct political party in 1970; it grew out of an alliance among Communist-oriented elements in the Social Democratic People's Party and other groups, and in effect replaced the earlier People's Union–Socialist Party (Sameiningarflokkur althyðu-Sósíalistaflokkurinn).

It was the issue of NATO and the US military presence that in March 1956 broke up an early alliance between Progressives and Independents, and the elections that year led to a new coalition of the Progressive, Labor, and People's Union–Socialist parties, all of which opposed the US military base on Iceland. (After the Hungarian uprising of October 1956, however, the Progressive and Labor parties reversed their stand.) That government fell because of Communist opposition to a proposed wage freeze, and after elections in October 1959, a government formed by the Independence and Labor parties came into office. This coalition endured for some time. But after the loss of four seats in the June 1971 general elections, a new government, composed of the Progressive Party, the People's Alliance, and the Liberal and Left Alliance (a party established in 1969 on a platform opposing Iceland's participation in NATO and its defense agreement with the United States) came into power under Prime Minister Olafur Jóhannesson. Then, on 29 August 1974, after gains by the Independence Party in June elections, a coalition of Independents and Progressives was sworn in under Geir Hallgrímsson of the Independence Party.

Two short-lived coalition governments followed. The first, a leftist coalition including the Social Democrats, People's Alliance, and Progressive Party, led by Olafur Jóhannesson, was dissolved when the Social Democrats left the coalition in October 1979. Following an election that December, a second coalition was eventually formed from members of the Independence Party, the People's Alliance, and the Progressives, with Gunnar Thoroddsen, deputy chairman of the Independence Party, as prime minister. After three unsuccessful attempts by party leaders to form a governing coalition following the April 1983 elections, Vigdís Finnbogadóttir—who in August 1981 had been elected president, becoming the first woman to become democratically elected head of state—threatened to request the formation of a government of civil servants. Eventually, Progressive leader Steingrímur Hermannsson formed and headed a coalition of the Independence and Progressive parties. Following the 1987 elections, Thorsteinn Pálsson of the Independence Party replaced Hermannsson as prime minister.

The general election of April 1991 resulted in a new center-right coalition led by Davíð Oddsson of the Independence Party and members of the Social Democratic People's Party. Vigdís Finnbogadóttir was reelected unopposed for a fourth four-year term in June 1992. The left-right coalition of the IP and SDP was dissolved after the elections of April 1995 when Oddsson formed a new coalition government composed of the Independence Party and the Progressive Party, chaired by Halldór Ásgrímsson, minister for foreign affairs and external trade. This coalition remained in power after the 1999 elections in which the Independence Party increased its share of the popular vote while the Progressives polled more poorly. Two new parties gained representation in the Althing in 1999, the environmental Left-Green Party (Vinstrihreyfing-Grnt framboð) and the Liberal Party (Frjáslyndi Flokkurin). Of all 63 parliamentarians, 41 were men and 22 were women. In the presidential elections of 29 June 1996, Vigdís Finnbogadóttir chose not to run and Dr. Ólafur Ragnar Grímsson won with 41.4% of the vote. In 2000, Grímsson was reappointed president, unopposed, to a second four-year term. Grímsson faced two opponents in the 2004 presidential election, but beat them soundly (with 85.6% of the vote).

In the 10 May 2003 elections for the Althing, the Independence Party secured 33.7% of the vote and 22 seats in parliament. The opposition Social Democratic Alliance (which now includes the People's Alliance, Social Democratic Party, and Women's List) won 31% of the vote and took 20 seats. The Progressive Party won 17.7% of the vote and 12 seats, and entered into a coalition with the Independence Party. Therefore, the Independence/Progressive coalition held a slim majority of 34 seats in parliament, compared with the 43 it held after the 1999 elections. The Left-Green Alliance secured 8.8% of the vote and 5 seats, and the Liberal Party won 7.4% and held 4 seats. Following the election, Prime Minister Oddsson stated that in 2004, Minister of Foreign Affairs Halldór Ásgrímsson would become prime minister in a new government. He held true to his pledge, and Ásgrímsson became prime minister on 15 September 2004.

LOCAL GOVERNMENT

Iceland is divided into eight regions (landshluta ), 23 counties (sýslur), and 23 independent towns (kaupstaðir). A magistrate or sheriff (sýslumaðour) administers each county. Within the counties are 101 municipalities (as of 2004), each governed by a council: town councils are elected by proportional representation, rural councils by simple majority. The local government units supervise tax collections, police administration, local finances, employment, and other local affairs.

JUDICIAL SYSTEM

District courts are courts of first instance. There are eight district courts in Iceland, which have jurisdiction in both civil and criminal cases. Appeals are heard by the Supreme Court, consisting of nine justices (all appointed for life by the president), who elect one of their number as chief justice for a two-year term. There are special courts for maritime cases, labor disputes, and other types of cases.

The courts are free from political control. Although the Ministry of Justice administers the lower courts, the Supreme Court oversees independent and fair application of the law.

A recent reform project transferred all judicial authority for criminal and civil cases from local officials (chiefs of police) to newly established district courts. This complete separation of judicial and executive power in regional jurisdictions was completed in 1992. Iceland did not accept compulsory ICJ jurisdiction.

ARMED FORCES

Iceland is the only NATO member with no military force of its own, although the government does maintain a 130-member coast guard with three patrol and one logistical/support vessels. US forces (1,658 personnel), along with Dutch forces, are stationed in Iceland.

INTERNATIONAL COOPERATION

Iceland became a member of the United Nations on 19 November 1946 and belongs to ECE and most of the nonregional specialized agencies, such as FAO, UNESCO, ILO, IFC, IFAD, the World Bank, and WHO. It belongs to the Council of Europe, the WTO, European Bank for Reconstruction and Development, the Euro-Atlantic Partnership Council, EFTA, NATO, the OECD, and the OSCE. The country is an associate member of the Western European Union. Iceland hold membership in the Council of the Baltic Sea States, the Nordic Council, the Nordic Investment Bank, the Arctic Council, and Barents Euro-Arctic Council. In 2001, the government established the Icelandic Crisis Response Unit (ICRU), which is designed to expand national support for cooperation in peacekeeping initiatives through the United Nations.

Iceland belongs to the Australia Group, the Nuclear Energy Agency, and the Organization for the Prohibition of Chemical Weapons. In environmental cooperation, Iceland is part of the Basel Convention, Conventions on Biological Diversity and Air Pollution, Ramsar, CITES, the London Convention, the Kyoto Protocol, the Montréal Protocol, MARPOL, the Nuclear Test Ban Treaty, and the UN Conventions on the Law of the Sea, Climate Change and Desertification.

ECONOMY

Iceland's economy, once primarily agricultural, is now based overwhelmingly on fishing. Crop raising plays a small role, since most of the land is unsuitable for cultivation and the growing season is short. Sheep raising and dairying are the chief agricultural activities, with horse breeding also substantial. Iceland is generally self-sufficient in meat, eggs, and dairy products, but sugar and cereal products must be imported. Since Iceland has almost no known mineral resources and has had no concentrations of population until recent decades, industry is small-scale and local, depends heavily on imported raw and semi-manufactured materials, and cannot compete favorably with foreign industry, especially with imports from low-income countries.

Although the economy is based on private ownership and operates mainly on a free-enterprise basis, public enterprises account for a sizable share of GDP (about 30% in the mid-1990s). The cooperative movement is important in rural trade, and the national and local governments own some productive facilities in certain fields requiring large amounts of capital not available from private sources. The economy developed rapidly after World War II, with a rate of capital investment so high at times as to strain available resources. GNP growth fell from 9% in 1977 to -3% in 1983 but recovered to 9% in 1987. After that, it averaged -0.4% through 1993. From 1992–2001 the economy grew impressively. GDP per capita reached one of the highest levels among OECD countries. This performance was largely due to market liberalization, privatization, and other factors that spurred entrepreneurship and investment.

For a time, inflation ran rampant, rising from 30 to 45% in the late 1970s to nearly 50% annually during 1981–85. It then moderated, dropping to only 3.7% in 1991 and 1.7% in 1998; it rose again to 9.4% at the beginning of 2002. Unemployment, traditionally low, was 2% in 1999 and 3.2% in 2002.

After 2001, the overheated economy slowed. The government tightened monetary policy and exercised fiscal restraint to reduce domestic demand. The króna went through a period of devaluation and inflation rose. However, the weak currency resulted in a surge in exports, which was also helped by increased production. Aluminum exports were up 22% in 2002. Iceland is in the process of reducing its dependence upon fishing, and the aluminum industry is one sector that is contributing to the diversification of the economy; in addition, the government is taking advantage of Iceland's inexpensive and abundant supply of geothermal energy. Iceland was in a mild recession in 2002, but the economy was expected to recover by 2003 or 2004.

The GDP growth in 2004 was 5.2%, up from 4.2% in 2003; in 2005, the economy was expected to expand by 5.9%. The inflation rate has been fluctuating, but at 3.2% in 2004, it was well under control and did not pose any problems to the economy. A similar trend was registered by the unemployment rate, which reached 3.2% in 2004, and was expected to decrease to 2.1% in 2005. The government of Iceland continues to oppose EU membership for fear of losing control of the fishing industry, which is one of the country's main economic engines.

INCOME

The US Central Intelligence Agency (CIA) reports that in 2005 Iceland's gross domestic product (GDP) was estimated at $10.3 billion. The CIA defines GDP as the value of all final goods and services produced within a nation in a given year and computed on the basis of purchasing power parity (PPP) rather than value as measured on the basis of the rate of exchange based on current dollars. The per capita GDP was estimated at $34,600. The annual growth rate of GDP was estimated at 5.9%. The average inflation rate in 2005 was 4.1%. It was estimated that agriculture accounted for 11.8% of GDP, industry 22.3%, and services 65.9%.

Approximately 16% of household consumption was spent on food, 8% on fuel, 3% on health care, and 10% on education.

LABOR

The labor force was estimated at 160,000 in 2005. In 2003, agriculture, fishing or fish processing accounted for 10.3% of the work-force, with 18.3% in manufacturing, and 71.4% in the services sector. In 2005 the estimated unemployment rate was 2.1%.

As of 2002, about 85% of workers are union members. Principal unions are the Icelandic Federation of Labor (associated with the ICFTU) and the Municipal and Government Employees' Association. Labor disputes are settled by direct negotiations or by special courts, however strikes are permitted. Collective bargaining is used to negotiate pay, hours, and other conditions.

The customary workweek is 40 hours. Workers are entitled to overtime pay in excess of eight hours per day. There is no legal minimum wage, but wages are negotiated through collective bargaining. Even the lowest paid workers earn sufficient wages to provide a decent standard of living. Child labor standards are stringent and strictly enforced.

AGRICULTURE

About 78% of Iceland is agriculturally unproductive, and only about 1% of the land area is actually used for cultivation. Of this amount, 99% is used to cultivate hay and other fodder crops, with the remaining 1% used for potato and fodder root production. There were about 4,000 full-time farmers in the 1990s, with about 75% living on their own land; some holdings have been in the same family for centuries. In the 19th century and earlier, agriculture was the chief occupation, but by 1930, fewer than 36% of the people devoted their energies to farming, and the proportion has continued to fall. Hay is the principal crop; other crops are potatoes, turnips, oats, and garden vegetables. In hot-spring areas, vegetables, flowers and even tropical fruits are cultivated for domestic consumption in greenhouses heated with hot water from the springs. Besides hay and other fodder crops, about 7,500 tons of potatoes were produced in 2004. There are agricultural institutions in Borgarfjörður, Hjaltadalur, Hvanneyri, and Reykir; between 15–20% of all farmers have finished an agricultural degree program.

ANIMAL HUSBANDRY

Sheep raising is extensive, and mutton and lamb are primary meat products. Sheep are permitted to find their own grazing pasture during the warmer months and are rounded up toward the middle of September and put in shed for the winter. Cattle are raised mainly for dairying, and their number has been rising steadily; beef production is negligible. Sheep in 2005 numbered an estimated 454,000; cattle, 64,000 head; horses, 72,000; and poultry, 190,000. Estimated livestock production in 2005 included milk, 112,000 tons; mutton and lamb, 8,500 tons; and eggs, 2,600 tons. Iceland is self-sufficient in meat, dairy products, and eggs.

Icelandic farm animals are directly descended from the sheep, cattle, goats, pigs, poultry, dogs, cats, and especially horses (which were an invaluable means of travel) brought by 10th century Scandinavian settlers. In sparsely populated areas, such as the western fjords and on the east coast, farming is chiefly limited to raising sheep, although sheep farming exists in all areas of the country. Milk is produced mostly in the south and north. Except for poultry, egg, and pig production, farms are small in acreage and usually family-run. About 2,000 farmers are engaged in full-time sheep farming, and 1,000 more in mixed farming. There also are about 1,800 dairy farms in operation; Icelanders consume on average 175 liters (46.2 gal) of milk per capita per year, one of the highest amounts in the world. Cheese consumption is fourth highest, after France, Germany, and Italy. Horse-breeding is also a growing branch of animal husbandry in Iceland, as the popularity of the Iceland horse (which has five gaits) grows at home and abroad.

Animal farming is a highly mechanized industry carried out by well-educated farmers; nearly one fifth of all farmers matriculate at one of three agricultural colleges in Iceland.

FISHING

Accounting for about 9% of Iceland's employment, fishing and fish processing provide the primary source of foreign exchange. Exports of fish products were valued at $1.5 billion in 2003. Icelanders consume more fish per capita annually (over 91.5 kg/201 lb live weight equivalent) than any other people in Europe. Cod is caught during the first five months of the year off the southwest coast. Herring are taken off the north and northeast coasts from June to September and off the southwest from September to December. In 2005, the fish catch was 1,984,349 tons (12th in the world), up from 1,502,445 tons in 1990. The 2003 catch included 680,291 tons of capelin, 501,494 tons of blue whiting, 250,039 tons of Atlantic herring, 206,670 tons of Atlantic cod, 60,402 tons of haddock, and 57,940 tons of pollock.

The fishing fleet as of 2004 consisted of 70 stern trawlers totaling 86,048 GRT and 869 other decked fishing vessels of 101,031 GRT. Most fishing vessels are now equipped with telecommunications devices, computers, and automated equipment. Through the early 1980s, about 250 whales a year were caught off the coast, providing lucrative export products. Although Iceland had agreed to phase out whaling in order to comply with the 1982 ban by the International Whaling Commission, in 1987 it announced its intention to take 100 whales a year for scientific purposes. The FAO reported that Iceland took 39 whales in 2003.

Abundant quantities of pure water and geothermal heat give Iceland an advantage over other nations in fish farming. Aquaculture is being developed to offset lean years in the natural fish catch, and to produce more expensive and profitable species of fish.

FORESTRY

There are no forests of commercial value, and the existing trees (ash, birch, aspen, and willow) are small; only about 1% of the total land area is considered forested. The originally extensive birch forests were cut down for firewood and to clear land for grazing sheep. In recent years, the remaining woods have been protected and reforestation has begun. Imports of forestry products amounted to about $76.4 million in 2004.

MINING

Diatomite was a leading export commodity in 2004, and ferrosilicon production and geothermal power were Iceland's major mineral industries. Diatomite production, from Lake Myvatn, was estimated at 28,000 metric tons in 2004. Iceland also produced hydraulic cement, nitrogen, pumice, salt, scoria, sand (basaltic, calcareous, and shell), sand and gravel, and crushed stone (basaltic and rhyolite); these minerals were used by local industries. Among Iceland's other mineral resources, spar and sulfur deposits, once mined, were no longer worked extensively. Peat was common, but little used and sulfur and lignite were being processed experimentally, the former with the use of subterranean steam. The country's aluminum plant and ferrosilicon plant relied on imported raw materials and inexpensive hydroelectric and geothermal energy. Ferrosilicon production in 2004 totaled an estimated 118,000 metric tons in 2004.

ENERGY AND POWER

Iceland has no known reserves of oil, natural gas or coal. Thus, the country is entirely reliant upon imports to meet its demand for fossil fuels. However, the country does rely upon hydroelectric power and geothermal/other sources to generate electric power and to provide heat.

In 2002, refined oil imports were reported at 15,760 barrels per day, while demand was reported at 18,050 barrels per day. Coal imports and consumption for 2002, were each placed at 161,000 short tons There were no imports of natural gas in 2002.

Hydroelectric power is the main source of electric power for Iceland, followed by geothermal and conventional thermal sources, respectively. In 2002, electric power generating capacity totaled 1.460 million kW, with hydropower accounting for 1.109 million kW, geothermal at 0.202 million kW, and conventional thermal at 0.149 million kW. Electric energy output in 2002 was 8.277 billion kWh, with hydroelectric output accounting for 83%, alternative sources for 16%, and conventional thermal fuels at less than 1%. Electric power demand in 2002 totaled 7.698 billion kWh. Peat, formerly an important source of heat on the farms, has been virtually abandoned.

Hot springs are used for heating greenhouses in which vegetables, fruit, and flowers are raised, and for heating public buildings. Since 1943, most of Reykjavík has been heated by water from hot springs at Reykir, some 160 km (100 mi) from the city. About 85% of the population lives in homes heated with geothermal power. In recent years, however, a significant decline in flow from geothermal drill holes has raised concern that this energy resource may not be so boundless as was once thought.

INDUSTRY

Fish processing is the most important industry. Facilities for freezing, salting, sun-curing, and reducing to oil or fish meal are flexible enough to allow shifting from one process to another in accordance with demand. Byproducts include fish meal and cod-liver oil.

Although Iceland's industry is focused on fish processing, the country in the 21st century needs to diversify its economy, as fish stocks are declining. (Nevertheless, fishing accounted for 12% of GDP in 2001 and 40% of total exports.) The manufacturing of energy-intensive industries, particularly aluminum, are rising. The ISAL aluminum smelter has expanded its capacity, and in 2002, construction of another aluminum smelter was underway. Production exports rose 22% in 2001. Other projects included the construction of a magnesium plant and the enlargement of the ferro alloy plant. Other industry is small-scale and designed to meet local needs. Chief manufactures include fishing equipment, electric stoves and cookers, paints, clothing, soaps, candles, cosmetics, dairy products, confectionery, and beer. Clothing factories are situated in Reykjavík and Akureyri. Icelandic ammonium nitrate needs are more than met by a fertilizer plant at Gufunes with an annual production capacity of 60,000 tons. A cement factory in Akranes with a capacity of 115,000 tons per year supplies most domestic cement requirements; total production in the mid-1990s amounted to 83,100 tons per year. Production of aluminum rose from 40,000 tons in 1970 to 99,300 tons per year in the same period. A ferrosilicon smelter, which began production in 1979, produced some 66,000 tons per year and a diatomite processing plant produced 25,000 tons.

In 2004, the industry had a 9.6% share in the GDP and employed 18.3% of the labor force; agriculture made up 11.2% of the economy, and together with fishing and fish processing employed 10.3% of the work force; services was by far the largest economic sector, with a 79.2% share in the GDP, and a 71.4% representation in the work force. The industrial production growth rate was 8.8% in 2004, higher than the GDP growth rate, which indicates that industry is currently a growth engine in Iceland.

SCIENCE AND TECHNOLOGY

The Icelandic Research Council coordinates science policy and advises the government on scientific matters. It has five research institutes devoted to marine science, technology, agriculture, the fish industry, and the construction and building industries. Other research institutes and learned societies include the Surtsey Research Society, the Icelandic Meteorological Office, the Association of Chartered Engineers in Iceland, the Agricultural Society of Iceland, the Iceland Glaciological Society, the Icelandic Natural History Society, and the Icelandic Society of Sciences, all located at Reykjavík.

The Icelandic Council of Science, an independent agency under the Ministry of Culture and Education, aims to stimulate and encourage scientific research. The University of Iceland has faculties of medicine, engineering, dentistry, and science. Two agricultural colleges are located in Hólum i Hjaltadal and Hvanneyri. The Icelandic College of Engineering and Technology is located at Reykjavík. In 1987–97, science and engineering students accounted for 41% of university enrollment. In 2002, of all bachelor's degrees awarded, 17.2% were in the sciences (natural, mathematics and computers, and engineering).

In 2001, there were 6,592 researchers and 2,082 technicians per million people that were actively engaged in research and development (R&D). For that same year, R&D expenditures totaled $262.371 million, or 3.08% of GDP. Of that amount, business accounted for the largest slice at 46.2%, followed by the government sector at 34%, with foreign sources and higher education accounting for 18.3% and 1.6%, respectively.

DOMESTIC TRADE

Foreign firms do not have branches in Iceland. Their business is conducted by Icelandic agents. Imports are handled by these agents, by wholesale or retail importers, or by the Federation of Iceland Cooperative Societies, and distribution is through private channels. Most advertising is translated and disseminated directly by agents. Foreign trade fairs are held from time to time.

Of the wholesale enterprises, 80–90% are concentrated in Reykjavík; more than half the retail establishments are likewise in the capital. Much trade is handled by cooperative societies, most of which are joined in the Federation of Iceland Cooperative Societies. A sales tax of 14% applies to most food items and books. A 24.5% tax applies to most other goods and services.

Business hours are from 9 am to 6 pm on weekdays, and from 9 or 10 am to noon on Saturdays. Banking hours are from 9:15 am to 4 pm, Monday–Friday, with an additional hour from 5 to 6 pm on Thursday.

FOREIGN TRADE

The fishing industry of Iceland supports most of its commodity export market (60%). It supplies the world export market with 10.5% of its salted, dried, or smoked fish, second only to Norway in volume. Other important exports include aluminum (19%), animal feed (6.3%), iron (2.6%), diatomite, and ferrosilicon.

In 2004, exports reached $2.9 billion (FOB—Free on Board), while imports grew to $3.3 billion (FOB). The bulk of exports went to the United Kingdom (19.1%), Germany (17.2%), the Netherlands (11.5%), the United States (9.8%), Spain (6.8%), and Denmark

(4.6%). Imports included machinery and equipment, petroleum products, foodstuffs, and textiles, and mainly came from Germany (12.3%), the United States (9.9%), Norway (9.7%), Denmark (7.9%), the United Kingdom (7.2%), Sweden (6.7%), and the Netherlands (6%).

BALANCE OF PAYMENTS

The difference between imports and exports since World War II has been met by drawing from large wartime reserves, by Marshall Plan aid, and, since 1953, by income from US defense spending at Keflavík, the NATO airbase. Widely fluctuating current account deficits, attributable mainly to the trade imbalance, averaged more than 6.5% of GNP during 1971–75. During the next four years, although still largely negative, the current account balance improved; from 1980 through 1985, however, Iceland's current accounts position again deteriorated, this time because of large deficits in services.

Iceland suffered a prolonged recession during 1987–93 due to cuts in fish catch quotas necessitated in part by overfishing. Again, there was a significant deterioration in the balance of payments, especially on the current account and merchandise trade balances. In 1994 the economy recovered with the help of a 6.3% growth in exports, due to a better than expected performance in the fishing sector. The external current account balance was positive for the first time since 1986. Iceland experienced successful economic performance in the 1990s but fell into recession in 2001, which negatively impacted the current account deficit.

The US Central Intelligence Agency (CIA) reported that in 2002 the purchasing power parity of Iceland's exports was $2 billion while imports also totaled $2 billion.

The International Monetary Fund (IMF) reported that in 2000 Iceland had exports of goods totaling $1.9 billion and imports totaling $2.38 billion. The services credit totaled $1.05 billion and debit $1.16 billion.

Exports of goods reached $2.9 billion in 2004, and were expected to grow to $3.2 billion in 2005. Imports were expected to reach $4.6 billion in 2005, up from $3.4 billion in 2004. The resource balance was consequently negative, reaching -$0.4 billion in 2004, and -$0.6 billion in 2005. The current account balance was also negative, at -$1.0 billion in 2004, and an expected -$2.1 billion in 2005. Foreign exchange reserves (including gold) grew to $935 million in 2004, covering less than four months of imports.

BANKING AND SECURITIES

In March 1961, the Central Bank of Iceland was founded to issue notes and assume other central bank functions previously exercised by the National Bank of Iceland, a wholly state-owned bank established in 1885. Other banks are the Agricultural Bank, a state bank founded in 1929; the Fisheries Bank, a private joint-stock bank founded in 1930, with most of its shares held by the government; the Industrial Bank, a joint-stock bank established in 1953, with part of the shares owned by the government; the Iceland Bank of Commerce, founded in 1961; the Cooperative Bank of Iceland, founded in 1963; and the People's Bank, founded in 1971. All banks have main offices in Reykjavík, and some have branches in other towns. Savings banks are distributed throughout the country.

In 1955, Iceland took the first step toward indexation of financial assets. The Economic Management Act of 1979 established a system of full indexation of savings and credit, most provisions of which were gradually implemented over the next two years. Most deposits are now indexed, and legislation that took effect in November 1986 gave banks increased power to determine their interest rate.

In 1990 the number of commercial banks in Iceland were reduced from seven to four. A number of banks were forced to merge into the Islandbanki because of financial trouble. In 1997 there were four commercial banks, two of which, the Landsbanki and Bunadar banki, are still state-owned. The country's two other banks, Islandsbanki and Sparisjodabanki, are privately-owned.

The whole basis on which the financial system is supervised and regulated, however, has been transformed by Iceland's accession to the European Economic Area (EEA) in 1994. Under the agreement, Iceland has been required to implement into national law the common minimum standards for the supervision of financial institutions—banks, insurance companies, and securities firms—developed at EU level.

Since 15 June 1973, the market rate of the Icelandic króna has been floating vis-à-vis other currencies. A currency reform that took effect on 1 January 1981 introduced a new króna equivalent to 100 old krónur. The money supply, as measured by M2, totaled k135,353 million in 1995. The International Monetary Fund reports that in 1998, currency and demand deposits—an aggregate commonly known as M1—were equal to $820.5 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $3.2 billion. The money market rate, the rate at which financial institutions lend to one another in the short term, was 8.12%. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 8.5%.

The Securities Exchange of Iceland (SEI) was established in 1985 on the basis of rules set by the Central Bank. A new Act on the Icelandic Stock Exchange was passed in February 1993, granting a monopoly to the exchange. As of 2004, a total of 34 companies were listed on the stock exchange, which had a market capitalization that year of $17.629 billion. In 2004, the ICEX-15 rose 58.9% from the previous year to 3,359.6.

INSURANCE

There are many mutual insurance societies in addition to the national health and social insurance scheme. Almost all direct insurance is written by domestic companies that conduct business in the various kinds of property and life insurance. Automobile liability insurance and homeowners' coverage against fire, floods, earthquakes, and volcanic eruptions are compulsory. The Ministry of Insurance Affairs is the principal supervisory body. In 2003, direct premiums written totaled $345 million, of which nonlife premiums accounted for $314 million. In 2002, Sjova Almennar was Iceland's top nonlife and life insurer, with gross written non-life premiums (for nonlife and life insurers) and life premiums of $112.7 million and $14.4 million, respectively.

PUBLIC FINANCE

Since 1984, Iceland's budget has shown a deficit averaging nearly 2% of GDP, raising its net indebtedness relative to GDP to almost 30% in 1994. Government attempts to balance the budget were frustrated by the economic downturn during 1987–93 and by fiscal concessions to expedite wage settlements. Consequently, the deficit has been larger than expected, reaching 34% of GDP in 1999.

The US Central Intelligence Agency (CIA) estimated that in 2005 Iceland's central government took in revenues of approximately $6.9 billion and had expenditures of $6.7 billion. Revenues minus expenditures totaled approximately $234 million. Public debt in 2005 amounted to 34% of GDP. Total external debt was $3.073 billion.

The International Monetary Fund (IMF) reported that in 2002, the most recent year for which it had data, central government revenues were k259,012 million and expenditures were k262,231 million. The value of revenues was us$2,826 million and expenditures us$2,861 million, based on an exchange rate for 2002 of us$1 = k91.662 as reported by the IMF. Government outlays by function were as follows: general public services, 18.5%; public order and safety, 4.9%; economic affairs, 15.7%; housing and community amenities, 0.9%; health, 26.2%; recreation, culture, and religion, 3.1%; education, 10.0%; and social protection, 20.7%.

TAXATION

Recent tax reforms in Iceland have produced a steady drop in corporate income tax rates throughout the 1990s and, since 1995, decreased marginal rates and increased thresholds for personal income tax. The corporate income tax rate, at 50% in 1989, was decreased from 30% in 2001 to 18% in 2002. The income tax on partnerships, was decreased from 38% in 2001 to 26% in 2002. Since March 1999, Iceland has also offered an offshore corporate tax rate of 5% to international trading companies (ITCs) that exclusively trade in goods and services outside of Iceland. Capital gains are taxed as ordinary income at 18%, although gains may be offset by extraordinary depreciation. Dividends paid to nonresident companies are subject to a 15% tax rate, while dividends paid to nonresident persons are subject to a 10% tax rate.

The personal income tax schedule in Iceland consists of a tax free allowance (about $10,457 in 2002 increased to $10,785 in 2003); a total tax rate that is the sum of the central government's general rate (25.75% in 2002 and 2003) and the municipal tax rate (12.8% in 2002 and 2003) giving a total tax rate of 38.55%; and a central government surtax (7% in 2002 reduced to 5% in 2003) which is applied to income above a certain threshold ($51,404 in 2002 and $52,818 in 2003) creating a three-bracket structure with maximum tax rate of 45.54% in 2002 decreased to 43.54% in 2003. Seamen are allowed special a special tax reduction amounting to about $9.40 a day in 2003. The social security tax, paid by the employer, is 5.73%. Since 1999, reductions in social security taxes (0.2% in 1999 and 0.4% as of May 2000) have been offered to employers in exchange for their contribution to supplementary employee pension premiums. In 2003 the wealth tax rate, applied to assets above about $61,000, was halved from 1.2% to 0.6% and a 0.25% surtax on net wealth above approximately $81,800 was abolished largely because of increases in real property values following an assessment review by the Valuation Office in 2002. Inheritance and gift taxes range from 11–15%. There is a 2–6% tax on the transfer of housing, and a 10% tax on the transfer of large estates. Local authorities may levy individual income and corporate taxes.

The major indirect tax is Iceland's value-added tax (VAT) with a normal rate of 24.5% on domestic goods and services. There is a reduced rate of 14% applied to most foodstuffs, books, newspapers and periodicals, subscriptions to radio and the TV, hotels, electricity, geothermal heating. Exempted from VAT are exports of goods and services, as well as services connected with imports and exports. Other categories for exemption include health services, social services, education, libraries, the arts, sports, passenger transport, postal services, rental of property, insurance, and banking.

CUSTOMS AND DUTIES

Over 90% of imports are not subject to import restrictions or duties other than the same value-added tax applied to domestically produced goods. Special excise taxes are levied on sugar and some sugar products, potatoes, and motor vehicles. Agricultural products remain the most heavily taxed. In March 1970, Iceland acquired full membership in EFTA. On 28 February 1973, Iceland ratified a trade agreement with the European Community (later named the European Union) leading to the elimination of tariffs on industrial goods. A law authorizing the establishment of free trade zones went into effect in 1992. Iceland's trade regime underwent considerable liberalization in the 1990s with accession to the European Economic Area (EEA) in 1993, and the Uruguay Round in 1994.

Current duty rates generally range from 0–30% ad valorem and the average weighted tariff is 3.6%. Some goods enter duty-free, such as meat, fish, and dairy products.

FOREIGN INVESTMENT

Icelanders have been reluctant to permit substantial foreign investment; nearly all such investment is limited to participation in joint ventures in which Icelandic interests hold a majority share. There is only one wholly foreign-owned industrial facility in the country, a Swiss aluminum-processing facility. Two others, a ferro-silicon and a diatomite plant, have foreign equity participation. From the beginning of 1993, Icelanders have been free to invest abroad.

For the period 1988 to 1990, Iceland's share in world foreign direct investment (FDI) inflow was only 30% of its share in world GDP. For the period 1998 to 2000, its share of world FDI inflows was 40% of its share of world GDP, a marginal improvement. Except for a fall to $66 million in 1998, yearly FDI inflows to Iceland have in the range of $146 million (2001) to $158 million (2000).

Energy-intensive industrial activities is one of the main areas for foreign investments, due to the inexpensive energy resources available in Iceland. The national telephone company was expected to be privatized by the end of 2005, and the government has started discussing about opening part of the fishing industry to limited foreign investment. Biomedical and genetic research are two areas with future potential for investments.

ECONOMIC DEVELOPMENT

The national government and some local governments are involved in trawler fishing, herring processing, merchant shipping, electric power facilities, and certain other industries. To a considerable degree, the central government supervises the export-import trade and the fishing and fish-processing industries. It may set uniform prices of export commodities and may shift export and import trade to specific countries as balance-of-payments considerations require. It channels investment funds into fields it considers desirable.

The government supports farmers in the rebuilding or enlarging of their homes, livestock sheds, and barns, and assists them in the purchase of machinery. Equipped with crawler tractors and excavators, a government agency helps farmers enlarge cultivated areas and break, drain, and level new lands for the establishment of homesteads. Thousands of new acres have thus been brought under cultivation.

The government fixes prices of essential foods and other basic consumption items and subsidizes them, both to limit prices for the consumer and to maintain farm incomes. It also fixes mark-ups that manufacturers, wholesalers, retailers, and importers may place on a wide variety of products.

In the early 1990s, the government concentrated on maintaining the value of the króna by bringing down inflation, even at the cost of economic growth. Wage gains were restricted. In late 1992, plans were made public for a Fisheries Development Fund that would buy and scrap unneeded vessels and thereby promote efficiency. The Fund would also be used to help firms establish joint ventures abroad and buy fishing rights. Plans were also under way to sell several state-owned companies, with the money used for research and development and reducing the deficit. Entry into the European Economic Area (EEA) in 1994 and the Uruguay Round brought increased trade liberalization and foreign investment. The country experienced rapid economic growth during the late 1990s, but high domestic spending led to a widening current account deficit that peaked at 10% of GDP in 2000.

The economy went into recession in 2001, and inflation rose. The government tightened monetary and fiscal policy that brought inflation down, but GDP growth remained negative in 2002. The government adopted a floating exchange rate for the króna in March 2001. Gross external debt amounted to 130% of GDP at the end of 2002. The government is looking to diversify exports, which is expected to stabilize the economy.

More than 70% of export revenues are contributed by the fishing industry, which makes the Icelandic economy susceptible to declining fish stocks and fluctuations in world prices for fish and fish products. To better equip for the future, Iceland has started diversifying its economic base, and branched out into software production, biotechnology, and financial services. At the same time, it has started expanding its manufacturing and tourism sectors. The current economic growth is expected to be sustained until 2007, and will have private consumption as its prime engine.

SOCIAL DEVELOPMENT

There is a universal pension covering all residents and a mandatory occupational pension covering all employees and self-employed persons. Universal pensions covering all residents are paid by employer and government contributions, while the cost of employment pensions is shared by employees and employers. Benefits include old age, disability, and survivorship pensions. Sickness and maternity benefits are available to all residents. The first laws covering sickness and maternity were instituted in 1936. Medical benefits cover all residents.

The number of women in the work force is high, partially due to a comprehensive subsidized day care program. In 2004 more than 75% of women were actively engaged in the work force. Equal pay for equal work is required by law although men continue to earn more than women. The government takes serious measures to protect women against violence and sexual abuse, though many cases remain unreported.

The constitution provides for the freedom of speech and press, assembly and association, and religion. These rights are generally respected by the government. There is very little discrimination based on race, gender, religion, disability, language, or social status.

HEALTH

The Director of Public Health is responsible for all health matters. Iceland had an estimated 347 physicians, 893 nurses, 77 midwives, 120 dentists, and 85 pharmacists per 100,000 people in 2004. In the 1990s there were an estimated 53 hospitals, with 3,985 beds. Two-thirds of the beds were in nursing and senior living homes, with the remaining one-third in hospitals. Public expenditures on health were among the highest in industrialized countries at 19.3% of the gross domestic product.

As of 2002, Iceland had estimated birth and death rates of, respectively, 14.4 and 6.9 per 1,000 people. Life expectancy was estimated at 80.19 years, among the highest in the world. Infant mortality in 2005 was estimated at 3.31 per 1,000 live births, one of the lowest in the world. The total fertility rate was two children per woman during her childbearing years. The incidence of tuberculosis, once widespread, has been greatly reduced. Leprosy, also common in earlier times, has been virtually eliminated, with no new cases reported in recent decades. Approximately 99% of Iceland's children were immunized against measles. The HIV/AIDS prevalence was 0.20 per 100 adults in 2003. As of 2004, there were approximately 220 people living with HIV/AIDS in the country. There were an estimated 100 deaths from AIDS in 2003.

The major causes of death were circulatory system diseases, cerebrovascular disease, malignant neoplasms (cancers), and diseases of the respiratory system.

HOUSING

In 2003, there were about 111,157 dwellings in the nation; about 383 dwellings for every 1,000 inhabitants. About 53% of all dwellings were one- or two-family houses; 45% were apartments. About 37% of all dwellings had five or more rooms and a kitchen. Most rural buildings were at one time made of turf, then of wood, and most recently of stone and concrete. In the towns, turf houses long ago gave way to wooden ones, but for some decades most new housing has been concrete. Virtually all dwellings have electricity, piped water, and central heating.

EDUCATION

Education is compulsory for 10 years of basic education (ages 6 to 16). Students may then choose to attend a general or technical secondary school, each offering four-year programs. Specialized vocational schools are also available to secondary students, including a commercial high school, a school of navigation, two schools of agriculture, and a health professions school. In some remote rural areas, a system of "alternate teaching" is in effect. This allows children to study intensively for a week or two at a boarding school, then return home for the same period of time. The academic year runs from September to May.

Most children between the ages of three and five are enrolled in some type of preschool program. Primary school enrollment in 2003 was estimated at about 100% of age-eligible students. The same year, secondary school enrollment was about 86% of age-eligible students. Nearly all students complete their primary education. The student-to-teacher ratio for primary school was at about 11:1 in 2003; the ratio for secondary school was about 13:1.

There are at least eight háskóli; a term that refers to both traditional universities and other institutions of higher education that do not have research programs. The University of Iceland in Reykjavík, founded in 1911, has faculties of law and economics, theology, medicine and dentistry, philosophy (art and humanities), and engineering. Tuition is free; only nominal registration and examination fees must be paid. In 2003, about 63% of the tertiary age population were enrolled in some type of higher education program; with 45% for men and 81% for women. The adult literacy rate has been estimated at about 99.9%.

As of 2003, public expenditure on education was estimated at 7.6% of GDP.

LIBRARIES AND MUSEUMS

The National and University Library in Reykjavík (founded in 1818; 900,000 items) serves as a national library as well as a public lending library. Other leading libraries, in the Reykjavík include the City Library of Reykjavík, which sponsors seven branch location and bookmobile, and the National Archives, which contains a collection of documents covering 800 years of Icelandic history. In 2000, there were about 106 public libraries in the country.

The important museums, also all in Reykjavík, are the Icelandic National Museum (founded in 1863), the Natural History Museum (1889), and a museum devoted to the sculptures and paintings of Einar Jónsson. The Arni Magnusson Institute contains Iceland literature and documents that were somewhat recently returned to the Icelandic government after being held by Denmark for centuries. Also in the capital are the National Gallery of Iceland, the Living Art Museum, and the Sigurjón Ólaffson Museum, among others. The Kopavogur Art Museum contains exhibits primarily on modern and contemporary art. A Salt Fish Museum opened in Grindavik in 2002 to commemorate the country's fishing industry.

MEDIA

Radio and radiotelephone communications are maintained with Europe and America and an underwater telegraph cable connects Iceland with Europe. The telephone, telegraph, and radio systems are publicly owned and administered. In 2003, there were 190,700 mainline phones and 279,100 mobile phones in use throughout the country.

The government-owned Icelandic National Broadcasting Service (RUV) provides the primary national radio and television broadcasts. There are, however, several smaller private stations. As of 1999 there were 5 AM and 147 FM radio stations and 14 television stations. In 1997 there were 260,000 radios and 98,000 television sets throughout the country. In 2003, there were about 195,000 Internet subscribers nationwide served by about 122,175 Internet hosts.

There are five daily newspapers, four of which are published in Reykjavík. With their political orientation and average daily circulation in 2002, they were: Morgunblaid, Independence Party, 53,000; DV Dagblaid, 44,000; Tíminn, Progressive Party, 14,000; Althydublaid, 4,000; and Dagur-Tíminn (Akureyri), Progressive Party. Icelandreview.com is an English-language news site. Nondaily newspapers are published in Reykjavík and other towns. Various popular and scholarly periodicals are published in Reykjavík.

The law prohibits the production, showing, distribution, and/or sale of violent movies, which are defined as containing scenes depicting the mistreatment or the brutal killing of men or animals. The Motion Picture Review Committee, which includes six members, is appointed by the Minister of Education and Culture to review all movies before they are shown. The committee also rates the films based on their suitability for children. By their evaluation, the committee may ban a film or require edits before its release.

The constitution provides for freedom of speech and press, and the government is said to respect these rights in practice.

ORGANIZATIONS

The Iceland Chamber of Commerce and the Confederation of Icelandic Employers are based in Reykjavík. Organizations representing laborers, businesses, and industries include the Farmers Association of Iceland, the Federation of Icelandic Industries, and the Federation of Icelandic Trade.

There are professional associations representing a wide variety of fields, such as the Icelandic Teachers Union and the Icelandic Nurses' Association. Many of these promote research and education in particular fields, such as the Icelandic Medical Association. There are several other associations dedicated to research and education for specific fields of medicine and particular diseases and conditions, such as the Icelandic Heart Association.

Notable national youth organizations include the Federation of Young Progressives, Independence Party Youth Organization, National Council of Icelandic Youth, National Union of Icelandic Students, Social Democratic Youth Federation, Youth Movement of the People's Alliance, YMCA/YWCA, and The Icelandic Boy and Girl Scouts Association. There are several sports associations in the country representing such pastimes as football (soccer), badminton, squash, mountain biking, skiing, skating, and track and field.

Learned societies include the Icelandic Archaeological Society, the Icelandic Historical Society, the Icelandic Literary Society, the Music Society, the Icelandic Natural History Society, and the Agricultural Association. There are also the Icelandic Artists' Association, the Iceland Association of Pictorial Artists, the Icelandic Actors' Association, the Icelandic Musicians' Association, the Icelandic Composers' Society, the Icelandic Architects' Association, and the Icelandic Writers' Association. Among other cultural organizations are the Icelandic-American Society, the Danish Society, the Danish-Icelandic Society, the Anglo-Icelandic Society, the Alliance Française, the Nordic Society, and the Union of Women's Societies.

The Salvation Army, Caritas, Amnesty International, and the Red Cross all have active chapters within the country. Volunteer service organizations, such as the Lions Clubs and Kiwanis International, are also present.

TOURISM, TRAVEL, AND RECREATION

Iceland offers such diverse and unusual natural attractions as active volcanoes, glaciers, and hot springs. Among popular participatory sports are swimming (possible year-round in geothermal pools), salmon fishing, pony trekking, bird-watching, skiing, river rafting, and golf. Tourists may arrange to stay in modern hotels, guest houses, on farms, or in youth hostels.

Citizens of the Scandinavian countries do not require a passport when visiting Iceland. All other visitors need valid passports and visas, except residents of some 60 countries (including the United States, Australia, and Canada). Visas are good for up to three months. A certificate of vaccination against yellow fever is required if traveling from an infected country.

In 2003, there were 569,194 tourist arrivals, almost an 11% increase from 2002. There were 7,330 hotel rooms with 14,948 beds and an occupancy rate of 42%.

In 2005, the US Department of State estimated the daily cost of traveling in Reykjavík from May through September at $442, and $352 the rest of the year. The cost of a stay in Keflavik-Grindavik was estimated at $367 per day.

FAMOUS ICELANDERS

Famous early Icelanders were Eric the Red (Eiríkur Thorvaldsson), who discovered and colonized Greenland in 982, and his son Leif Ericsson (Leifur Eiríksson, b.970), who introduced Christianity to Greenland and discovered the North American continent (c.1000). Two famous patriots and statesmen were Bishop Jón Arason (1484–1550), who led the fight for liberty against the power of the Danish king, and Jón Sigurðsson (1811–79), Iceland's national hero, champion of the fight for independence. Vigdís Finnbogadottír (b.1930) served four consecutive terms as president from 1980 to 1996, becoming the first female elected to the presidency of any republic.

Prominent writers were Ari Thorgilsson (1067–1148), father of Icelandic historical writing; Snorri Sturluson (1178–1241), author of the famous Prose Edda, a collection of Norse myths; and Hallgrímur Pétursson (1614–74), author of Iceland's beloved Passion Hymns. Leading poets include Bjarni Thorarensen (1786–1841) and Jónas Hallgrímsson (1807–45), pioneers of the Romantic movement in Iceland; Matthías Jochumsson (1835–1920), author of Iceland's national anthem; Thorsteinn Erlingsson (1858–1914), lyricist; Einar Hjörleifsson Kvaran (1859–1939), a pioneer of realism in Icelandic literature and an outstanding short-story writer; Einar Benediktsson (1864–1940), ranked as one of the greatest modern Icelandic poets; Jóhann Sigurjónsson (1880–1919), who lived much of his life in Denmark and wrote many plays based on Icelandic history and legend, as well as poetry; and the novelist Halldór Kiljan Laxness (1902–98), who received the Nobel Prize for literature in 1955.

Niels Ryberg Finsen (1860–1904), a physician who pioneered in the field of light (ray) therapy, received the Nobel Prize for medicine in 1903. Stefán Stefánsson (1863–1921) was the pioneer Icelandic botanist. Helgi Pjeturss (1872–1949), geologist and philosopher, was an authority on the Ice Age and the geology of Iceland. Einar Jónsson (1874–1954), Iceland's greatest sculptor, is represented in European and American museums.

Singer, songwriter, and composer Björk (b.1965), formerly the lead singer of the Icelandic band The Sugarcubes, works in a variety of musical genres. The former world chess champion Bobby Fischer (b.1943) became an Icelandic citizen in 2005. Russian pianist and composer Vladimir Ashkenazy (b.1937) has been a citizen since 1972.

DEPENDENCIES

Iceland has no territories or colonies.

BIBLIOGRAPHY

Durrenberger, E. Paul. The Dynamics of Medieval Iceland: Political Economy and Literature. Iowa City: University of Iowa Press, 1992.

Images of Contemporary Iceland: Everyday Lives and Global Contexts. Iowa City: University of Iowa Press, 1996.

International Smoking Statistics: A Collection of Historical Data from 30 Economically Developed Countries. New York: Oxford University Press, 2002.

Jochens, Jenny. Women in Old Norse Society. Ithaca, N.Y.: Cornell University Press, 1995.

Karlsson, Gunnar. The History of Iceland. Minneapolis: University of Minnesota Press, 2000.

Magnusson, Magnus. The Icelandic Sagas. London: Folio Society, 2002.

Ross, Margaret Clunies (ed.). Old Icelandic Literature and Society. New York: Cambridge University Press, 2000.

Sullivan, Paul. Waking Up in Iceland. London, Eng.: Sanctuary, 2003.

Tulinius, Torfi H. The Matter of the North: The Rise of Literary Fiction in Thirteenth-Century Iceland. Odense, Denmark: Odense University Press, 2002.

Iceland

History & Background

Iceland, one of the world's first independent, democratic nations, is the second largest island in Europe (39,769 square miles). Located 180 miles south of the Arctic Circle, Iceland's nearest neighbor is Greenland to the west (180 miles), followed by Scotland to the south east (495 miles), and Norway to the east (590 miles). Iceland is largely a classless society composed of the descendents of farmers and warriors who fled the tyranny of Scandinavia many centuries ago. The strength of the people, mirrored by the powerful landscape, is evident in the thriving independent culture. Visitors to Iceland typically find the people to be courteous and friendly, are surprised by the cold yet temperate climate (mild winters and cool summers), and are struck by the breathtaking natural beauty of the country. Despite physical isolation, Iceland has maintained its place in European civilization.

Iceland has a rich literary tradition and unusually high standards of education, with 15 percent of the national budget devoted to education. Illiteracy is unknown in the small island country. Icelanders are generally very open to new ideas and trends, and they have rapidly developed, implemented, and embraced new technology throughout their society. Approximately 82 percent of Icelanders between the ages of 17 and 75 have access to the Internet at home, school, or work. With artists frequently deriving inspiration from the extraordinary terrain and the ancestral culture, the arts are flourishing in Iceland. Painting in particular has thrived since the end of the nineteenth century. Nearly every district has its own museum reflecting the local cultural history, while magnificent galleries and museums grace the capitol. Literature has always played a prominent role in Icelandic culture. Manuscript illumination, woodcarving, and folk music have been associated with periods of heightened interest. There are numerous theater companies in Iceland, and Reykjavik is home to a symphony orchestra, an opera house, and a ballet company. The National Theater of Iceland celebrated its fiftieth anniversary in the year 2000. Icelandic nightlife is famous for its vibrancy, with night clubs, cafes, and cinemas in all major towns.

The Evangelical Lutheran Church is the official state church, but freedom of religion exists for all other congregations. Although the state provides financial support to the church, it extends considerable freedom. The bishop is elected by pastors and members of the theological faculty at the University of Iceland; and the one diocese is divided into districts, which are further subdivided into parishes. An elected church congress serves as an advisory board to the church. Roughly 90-94 percent of Icelanders are Protestants (73 percent Evangelical Lutheran) and 1 percent are Catholic.

With an excellent health care system available to all citizens at no cost, the life expectancy in Iceland is among the highest in the world (76.5 years for males and 81.5 years for females) and infant mortality is among the lowest in the world (5.5 per 1,000 live births). The health-care system receives 40.5 percent of the national budget and the nation operates one of the most expensive health-care systems in the world. Welfare services include unemployment insurance, old age and disability pensions, family and childbearing allowances, and sickness benefits. The medical and welfare systems are jointly financed through taxation by the national and local government.

Geologically, Iceland is a very young country and the process of its formation is still in progress. Iceland's interior consists mostly of uninhabited mountains and high plateaus. Much of the uninhabited regions, encompassing more than 80 percent of the island, are covered with permanent snow and ice (glaciers) or volcanic surface, preventing many agricultural activities. The settlements are limited to a narrow coastal belt, valleys, and lowland plains in the south and southwest. With a population of approximately 272,000 people, Iceland is one of the smaller nations in the world, yet it is the least densely populated of all European nations. More than 60 percent of the country's population resides in or near the capital city of Reykjavik ("Bay of Smokes" named for the geo-thermal stream), situated in the southwestern region of the island. Since WWII Iceland has maintained a high standard of living that is comparable to other Nordic countries. The strong Icelandic economy is based on the use of renewable natural resources and a highly educated and skilled labor force. Unemployment is nearly non-existent in contemporary Iceland. Over the course of the twentieth century, Iceland, which is situated on major shipping and air lanes of the North Atlantic Ocean, has effectively transformed itself from a subsistence economy to an exchange economy. The cost of living is very high because so many purchases from cars to paper are imported. Households require two or more incomes, with most women working outside the home and many men holding two jobs.

The principal employers are fishing, industry, agriculture, and health services. Icelanders as a group are very committed to their work regardless of the specific form. Whether employment involves intellectually challenging desk work, farming, or fishing, for the Icelander there seems to be an intrinsic association between one's work life and both one's personal contentment and the meaning ultimately attached to one's life. A common belief in Icelandic society is that an individual who is not very busy and actively involved in his or her work is not living life fully. Casual conversations over a meal frequently involve discussions about work. All Icelandic youth are expected to work as soon as possible, particularly during the summer months when school is out of session.

Although Irish monks were the first people to inhabit Iceland in the eighth century, it was not until the period extending from 870 to 930 A.D. that Iceland was systematically settled by both Norsemen from Scandanavia and Celts from the British Isles. The monks are believed to have left shortly after the arrival of the pagan Norsemen. Because the ruling class was Nordic, both the language and the culture have been predominantly Scandinavian from the beginning. There are, however, traces of Celtic influence in the literature and in the names of people and places. Immigration from other parts of the world has been minimal since the time of the first settlement.

Iceland's present day parliament, Althing, is the oldest existing national assembly in the world. When established in 930 A.D., the power of the Althing was distributed among four local courts and a supreme court. In 1000 A.D., Christianity was peacefully adopted at the Althing, which met for two weeks each summer and attracted a significant portion of the population. The first bishopric, or center for learning, was established at Skal-holt in south Iceland in 1056, and a second was developed at Holar in the north in 1106. These first schools were devoted primarily to educating men for the priesthood, but many others who were prominent in secular affairs were taught as well.

During the late twelfth and the early thirteenth century, dramatic Icelandic tales of early settlement, the colonization of Greenland, romance, disputes, and the development of Iceland were translated into a rich literary tradition dominated by Sagas. These fact-based works, which provided the early settlers with a source of entertainment as well as cultural heritage, represent some of the classics of world medieval literature and continue to be widely read and treasured by Icelanders. A common custom on farms was for families to sit with handiwork (weaving, tool making, carving, spinning, or knitting) while participating in shared reading, storytelling, and verse making. A study by Weingand conducted in 1989 revealed that 86 percent of well-educated Icelanders, 71 percent of the general population, and 53 percent of students reported recalling oral reading of sagas and folk-tales in the home during childhood.

The enlightened period of peace, or the "Golden Age," lasted 200 years until internal feuds resulting in civil war led to submission to the king of Norway and a new monarchical code in 1271. The infamous Sturlung Age, which followed the era of peace, was marked by political treachery and violence. During this time, the eruption of Mt. Hekla brought physical destruction, widespread epidemics, and death. At the end of the fourteenth century, Iceland was brought under Danish rule and conflicts between church and state culminated in the Reformation of 1550 with Lutheranism declared the country's official religion. The next three centuries were troubled by Danish profiteering, international pirates, a series of natural disasters, and famines.

Denmark's hold on Iceland was significantly reduced in 1874 when a constitution was drafted granting Iceland permission to handle domestic affairs. In 1918 Iceland became an independent state under the Danish king. After the occupation of Denmark and Iceland's declaration of sovereignty, the island's vulnerability was responded to by British and U.S. troops. On June 17, 1944, the Republic of Iceland was formally declared at Thing-vellir.

Iceland joined the United Nations in 1946 and it is a charter member of the North Atlantic Treaty Organization (NATO). In the post WWII era, Iceland has based its foreign policy on peaceful international cooperation and has participated in Western defense efforts. Iceland does not maintain armed forces. However, the United States, which has assumed responsibility for Iceland's defense, maintains a naval air station at the Keflavik International Airport.

Icelandic, the national language, has changed very little from the original tongue of the Norse settlers. A strong movement for linguistic purism gained strength in the nineteenth century and has persisted unabated. English, Danish, and German are also widely spoken and understood. A governmental agency, the Icelandic Language Committee, was established in 1965 and officiates over all language issues. New Icelandic terms are introduced in each discipline and foreign influence on the vocabulary is actively resisted.

Literacy has been universal in Iceland since the end of the eighteenth century. In 1700, less than half of the population of Iceland could read. However, literacy was accomplished in the eighteenth century as children were taught to read by their families or clergy in their homes. This practice of family members frequently teaching children to read continues in present day Iceland.

Constitutional & Legal Foundations

Iceland is a republic with a parliamentary democracy and a president elected for a four-year term by popular vote. The president functions as head of state but remains apolitical except when the two political parties fail to solve governmental crises. The Althing is a legislative body of 63 members elected by popular vote for a term of four years. With authority over finances, the Althing exercises considerable power over the executive branch of the government. The Althing also elects members of key committees and councils within state institutions. Local government is exercised by 162 separate municipalities.

Education in Iceland has historically been public with very few private institutions. Iceland's modern school system dates back to the late nineteenth century and the early twentieth century. In 1880, an education act required that all children be taught reading, writing, arithmetic, and Christianity according to the Lutheran confession. The act stipulated that parents were responsible for teaching their children with supervision provided by the pastors of the Lutheran Church.

The first major education act, a bill establishing the basic objectives and policies to serve as the foundation of educational practices, was passed by the Althing in 1907. With the act, education became compulsory and free of charge for all children between the ages of 10 and 14. In addition, a regional and administrative structure was introduced whereby rural areas, towns, and villages were subdivided into educational districts. Each district was to have a primary school paid for and run by the local authorities with supplementary government funds available based on need. The central Education Office was ultimately responsible for supervising all types of public education, the provision of textbooks and equipment, appointing inspectors, and the administration of final exams. A commissioner of Education was assigned the role of directing and supervising public education for the whole country.

The 1946 education acts divided the school system into four levels (primary, lower-secondary, upper-secondary, and higher), established an entrance exam for upper-secondary education, and introduced a double-track vocational and academic system designed to divert a large number of students into the vocational fields. In 1955, the State assumed full responsibility for the industrial-vocational schools in order to secure the future of this form of education.

In the late 1960s controversy surrounding educational reform became heated and led to the Education Act of 1973, the Primary School Act and the School Systems Act both of 1974, and other reforms during the 1970s. This legislation formed the basis of the contemporary educational system. In addition to providing all citizens the right to free compulsory (primary and lower-secondary), upper-secondary, and higher education, the various laws extended the compulsory education to grade 9, provided for municipalities to develop preschool classes for 5- to 6-year-olds, and enabled the establishment of an experimental comprehensive high school designed to balance the status of the two tracks (general academic and vocational) within one school.

Legislation adopted in 1995 and 1996 requires all compulsory and upper-secondary schools adopt methods for systematically evaluating the following components of educational practice: instruction and administrative practices, internal communication, and external relations. These methods of self-evaluation are examined by the Ministry in five-year cycles. Further, new legislation concerning compulsory schools placed the responsibility of operation with the local municipalities.

Educational discourse in the context of reform movements throughout the past few decades has revolved around topics such as active learning, mixed-ability grouping, hands-on math and science, thematic studies, projects and topic work, group work, peer tutoring, moral and social education programs, the whole language approach, and team teaching. Reform discussions have focused on school-based curriculum development, constructivist teaching and learning, performance-based assessment, teaching for multiple intelligences, learning styles, problem-based learning, life skills programs, inclusion, quality control and school self-evaluation, and information technology.

In 1996 the Ministry published a policy document regarding the role of information technology in education. Among the plans outlined was an extensive integration of information technology into instruction at all educational levels. All students are to have access to computers and high quality software.

Further, in 1998 the Ministry announced an ambitious education initiative with new school policy for compulsory and upper-secondary schools designed to provide Icelandic students with an education that is comparable to the best systems worldwide. The policy represents a concerted effort to create an efficient and flexible system that enables focused attention directed toward meeting the needs of individual students, and increased choices for students, while fostering academic discipline, good working skills, healthy competition, and enhanced student initiative and responsibility.

Educational System—Overview

Consistent with an overall philosophy of education based on tolerance, Christian values, and democratic-cooperation, perhaps the most fundamental principle embedded in the history of the Icelandic education system is that equal access to education should be granted to all irrespective of sex, economic status, area of residence, religion, physical handicap, cultural or social background. In recent years, carefully considered and articulated general aims of the education system in Iceland have been to encourage and preserve Icelandic culture, history, and language and to ensure that the Icelandic education compares favorably to the education provided by the leading nations in the world. Clear objectives have been specified to focus programs toward achieving these broad goals with the Ministry receiving widespread political and popular support for their efforts.

School attendance is obligatory for all children between the ages of 6 and 16 in Iceland. Those desiring to continue their education beyond the compulsory period attend various specialized schools or upper-secondary schools. Students can enroll in four-year secondary schools at age 16, with graduation entitling the student to admission to a university. There are also a number of technical, vocational, and specialized schools. Approximately 74 percent of the Icelanders under the age of 29 participate in Iceland's formal education system. This includes more than 42,000 young people of compulsory education age (6-16).

The language of instruction is Icelandic, and all educational institutions are publicly funded. Although the majority of schools are fully supported by the State, 6 percent are private grant-aided institutions (operated by nongovernment agencies but receiving a portion of their finance through the public sector). Students with special education needs are most typically integrated into the main stream classrooms, with only .3 percent of the special needs students educated in separate schools.

Preprimary education in Iceland is available on a fee basis and focuses on the developmental and educational needs of children between the ages of 1 and 5. More than 80 percent of children between the ages of 3 and 5 are enrolled in pre-compulsory education.

Children are admitted to compulsory education at age 6, with students usually attending their local school. Parents are permitted to transport their children to a more distant district. In the rural areas, children frequently attend boarding schools. Tuition and textbooks are free of charge at the compulsory level. Students in compulsory education are not grouped according to ability and no formal division is made between primary and lower-secondary education. However, students at the primary level have one teacher; whereas, lower-secondary school students have different teachers for each subject area.

The Ministry of Education, Science, and Culture oversees the curriculum and publishes a National Curriculum Guide. Core subjects include Icelandic (grammar and literature), mathematics, foreign languages, natural science, social science, religious study, arts and crafts, and physical education, with compulsory swimming practice. The curriculum guide also contains recommendations pertaining to assessment, progression, and examinations. Teachers select their own methods of classroom assessment and may adopt preferred instructional methods. The National Centre for Educational Materials publishes and distributes teaching and learning materials to assist compulsory education teachers. The school year runs for 170 days from early September through the end of May, with schools open 5 days per week.

Students who complete compulsory schooling have access to upper-secondary education, regardless of their achievement. Students pay an enrollment fee and may have to purchase books; however, there is no charge for tuition. The most prominent forerunner of the Icelandic upper-secondary schools is the Latin school devoted initially to training boys for the ministry. These schools eventually became more general as young people were trained for university education and civil service. Schools with a strong vocational mission and a classical academic curriculum were transformed into general education institutions. Upper-secondary education is of two forms in Iceland: general academic and vocational or specialized. The length of training varies from 6 months to 4 years depending on the course of study.

The upper-secondary school curriculum is set forth by the Ministry of Education, Science, and Culture in the National Curriculum Guide. All courses leading to matriculation include Icelandic, foreign languages, social studies, mathematics, computer science, and physical education. Academic education further includes compulsory specialist subjects and student electives. Vocational courses of study consist of the general core in addition to vocational theory and practice classes. Most of the upper-secondary schools award unit credits for individual courses and are flexible in terms of the amount of time students spend on given courses. Upper-secondary general and vocational assessment is based on two yearly examinations and, frequently, coursework. Students who fail to pass an examination are given three opportunities to try again.

Upper-secondary educational assessment had been the domain of the local school; however, national examinations in the general academic track were instituted. General academic training culminates in a General Certificate, which is a prerequisite to entering the higher education system in Iceland. Students completing vocational training are awarded a Journeyman's Certificate. Many schools offer both general academic and vocational training.

Higher education is offered at three universities in Iceland and 11 non-university institutions offering specialized training in areas such as the arts, agriculture, technology, preschool education, and physical education. Admission is dependent upon a matriculation certificate from an Icelandic upper-secondary school or an equivalent from an abroad institution. Instruction at most universities and colleges is conducted in Icelandic with many textbooks frequently written in foreign languages. Because the majority of the schools are financed by the state, tuition is free and students rarely have to pay fees.

Preprimary & Primary Education

Preschools are housed in buildings that are physically well-suited for their activities and are always situated in a location that allows for ample outdoor play space (30-40 square meters per child). Indoors, the law requires 7 square meters of space per child. With only one exception, preschool education is co-educational throughout Iceland. Very few preschools will accept children under the age of one, with most children not enrolling until age two. Children attend preschools for 4 to 9 hours daily. In municipalities where there are an insufficient number of spaces available to accommodate the need, preference is given to children of single parents and students. Children are typically divided into separate groups based on age; yet in the smaller communities children of various ages are kept together in a single group.

Icelandic law concerning the conduct of preschool education emphasizes several aims. These aims are provided in abbreviated form below:

1. To provide children with a safe and healthy environment in which to play and grow.
2. To give children the opportunity to participate in and enjoy group games and activities under the direction of a preschool teacher.
3. To encourage the optimal development of each child through cooperation with parents and sensitivity to each child's unique nature, with special emphasis on providing the emotional and physical support children need to enjoy childhood.
4. To encourage tolerance and open-mindedness while providing equal developmental and educational opportunities to all children.
5. To support Christian ethical development and provide the necessary foundation for children to become independent, conscious, active, and responsible citizens of an ever-changing democratic society.
6. To foster the children's creative and expressive abilities in ways that fortify their self-image, sense of security, and ability to solve problems in a non-aggressive manner.

The Ministry issues a preschool program defining the educational and pedagogic role of preschools with policy pertaining to how it should be implemented. The contemporary program is based on a child-centered philosophy emphasizing individuality and childhood as being a distinct stage of life with special qualities. A strong emphasis is placed on play, as it is believed to provide the best medium for fostering learning and socio-emotional development in preschoolers. Several specific educational areas are addressed in the preschool education program: caring and daily routine, play and playing conditions, speech and speech stimulation, visual creativity and expression, music, sound, and movement, nature, and society. Individual schools make decisions regarding the relative emphasis placed on each of these areas and decide how and when to integrate the different educational components. Preschool age children with special needs are accommodated with needed assistance and/or specialized training that is monitored regularly for results.

Preschools are not required by law to formally assess the progress of the individual children. In cases of suspected deviation from normal development, the pre-school staff or specialists do, however, conduct appropriate assessments. The directors of preschools evaluate their programs regularly and the Ministry is responsible for conducting comprehensive assessments.

Icelandic law governing compulsory education renders school attendance obligatory for all children between the ages of 6 to 16. The law sets the length of the academic year, the minimum number of lessons to be given weekly, and identifies required subjects. The law further makes it the duty of parents to register their children and see to it that they attend regularly. The law makes it the domain of the state and local municipalities to insure that education is implemented in accordance with the dictates of the Ministry.

Primary education (grades 1-7) and lower-secondary education (grades 8-10) are considered part of the same general level of education. However, primary teachers instruct one class in most academic subjects; whereas in lower-secondary school, teachers usually teach one or more subjects to several different classes. There are no entrance requirements. Local school districts cover the costs of school construction, teaching, and other personnel-related instructional expenses, as well as the costs of daily operation. In addition, they provide specialist services including pedagogic counseling, counseling related to particular academic subjects, educational counseling, and school psychology services. On the other hand, the state monitors adherence to educational law and National Curriculum Guidelines by evaluating individual schools while also supplying educational materials including textbooks.

Compulsory school in Iceland is divided into 10 grades, many schools housing all ten grades, some schools with grades one though seven, and others with grades eight through ten. The total number of Icelandic compulsory schools is slightly more than 200, and the size of schools varies from from 700 to 800 pupils in the largest schools located in and around the capital city to fewer than 10 students in some remote rural districts. Nearly 50 percent of all compulsory schools in Iceland have fewer than 100 pupils. All compulsory schools enroll both boys and girls. Home-room or advisory teachers offer pupils advice on their studies, with special school counselors employed mainly at the larger schools.

National Curriculum Guidelines developed by the Ministry set parameters with respect to the organization, execution, and evaluation of education within the compulsory schools. The staff at each school must write a school working guide or administrative plan based on the Guidelines with sensitivity to the unique features and circumstances of the institution. The plan, which includes an annual calendar, must detail the organization of teaching, the content and objectives of education provided, student assessment procedures, assessment of school-related work, extra-curricular activities, and various other aspects of school operation.

The Ministry issues guidelines regarding the hours of instruction required for each grade as well as the proportion of total teaching time to be devoted to individual subjects. The number of lessons increases lightly during the 2001-2002 academic year with 30 weekly lessons slated for grades 1 through 4, 35 lessons per week for children in grades 5 through 7, and finally, 37 lessons provided for students in grades 8 through 10. At the conclusion of 10 years of compulsory education, students' time will have been partitioned in the following way: Icelandic, 18 percent; mathematics, 15 percent; arts, crafts, and home economics, 20 percent; modern languages, 9 percent; natural sciences, 6 percent; social studies, 7 percent; religious studies, 3 percent; physical education, 10 percent; and electives and miscellaneous studies, 12 percent. Danish is studied from the sixth through the tenth grades, with English studied during grades 7 through 10.

Children are expected to cover the same material in approximately the same amount of time and the students are not separated into instructional groups based on ability. However, students who experience difficulty are provided with remedial help. Teachers are free to select the methods that they find best suited for their students, the instructional goals, and the teaching conditions. Teachers generally strive to use as much variety as possible in their instruction. Children with special needs are assisted by a remedial teacher within the regular classroom environment or they are brought to another small room for oneon-one help by the remedial teacher. Many schools also have special departments for students with severe learning disabilities.

Examinations and other forms of assessment are designed and administered by individual teachers and schools. Methods for reporting student progress varies considerably across schools. Many compulsory schools assign numerical or letter grades, while others use oral or written comments. All schools issue some form of student progress report at regular intervals throughout the academic year. When students complete compulsory education, they take a nationally coordinated exam in Icelandic, mathematics, English, and Danish. Grades ranging from 1-10 are assigned by the Institute of Educational Research, which is also responsible for designing the test. The results provide information related to the student's relative standing in their group and are used to assist students in choosing a course of study in upper-secondary school. Beginning in 1995, nationally coordinated exams in Icelandic and mathematics have been administered to children in grades 4 and 7. Similar to the requirement for preschools, each compulsory school must undertake extensive periodic self-evaluations that consider teaching, administration, and internal and external communication. Every five years the schools' methods of assessment are evaluated by an external agent and the Ministry regularly evaluates compulsory schools to ensure compliance with the law.

Secondary Education

In Iceland, upper-secondary education is governed by law that was enacted in 1996, with certain provisions having taken effect in stages and becoming fully implemented (2000-2001 school year). The law defines the framework for upper-secondary education outlining aims as well as the role of the state and local municipalities. Further, in accordance with the law, the Ministry issues National Curriculum Guidelines describing the content and objectives of each program of study. Although upper-secondary education is not obligatory, everyone who completes compulsory education has a right to pursue this level of education. Between 87 and 89 percent of students completing compulsory education enroll in upper-secondary programs, but the dropout rate is rather high. All upper-secondary schools are co-educational and free of charge. However, students must pay enrollment fees, cover textbooks, and provide partial costs for materials if in a vocational program. The law allows for different entrance requirements to the different programs depending on the demands of the courses of study. Students not meeting the minimal requirements for a desired program are offered the opportunity to receive remedial training in the core courses.

There are approximately 40 upper-secondary schools varying in size from fewer than 50 to more than 1,500. Four different types of upper-secondary schools are operated in Iceland:

1. general academic schools that offer four-year academic programs concluding with the matriculation examination that is required for entrance into the higher education programs;
2. industrial-vocational school offering theoretical and practical programs of study in skilled and some nonskilled trades;
3. comprehensive schools that provide programs of study comparable to those offered in the general academic and vocational-industrial schools in addition to other specialized vocational training programs; and
4. vocational schools that offer programs of study designed for specialized employment.

The law stipulates that four general types of programs should be offered at the upper-secondary level. These include vocational programs, fine arts programs, a general academic program that leads to matriculation, as well as a shorter general academic program. Students in vocational programs are given the opportunity to complete additional course work if they are interested in university studies.

General academic education is organized into three subject areas: general subjects that all students are required to enroll in (approximately two-thirds of the curriculum), specialized subjects that fit with the aims of particular programs, and electives. There are three different academic programs leading to matriculation (foreign languages, natural sciences, and social sciences) with possibilities for more focused study within each of these broader programs. A shorter academic program is designed for students who are undecided about what particular course of study to pursue and for those who need additional preparation prior to committing to the longer academic track or a vocational program.

Although the length of vocational programs varies, most are four years with students choosing training in various skilled trades, agriculture, the travel industry, fisheries, food production, health, or commerce. A number of the vocational programs, in addition to those for skilled trades, award legal certification for certain types of employment. For example, certification is provided for nurses' aides and sea captains. The law of 1996 requires vocational councils composed of representatives from employers and employees in each vocation along with one representative from the Ministry to convene regularly for the purpose of defining knowledge and ability needs of each vocation and to make curricular recommendations.

The academic year is divided into autumn and spring terms with students attending 32 to 40 forty-minute lessons per week. Most upper-secondary schools operate under a unit-credit system that allows students to regulate the amount of time it takes to complete their programs. In this type of system each subject is divided into a number of defined course units lasting for one semester.

The objectives of upper-secondary level education, outlined by law, encourage the overall development of students to equip them for active participation in a democratic society, preparing students for employment and further study, and fostering several personal qualities including responsibility, broad-mindedness, initiative, self-confidence, tolerance, discipline, independence, critical thinking, appreciation for cultural values, and the desire to seek lifelong learning. The National Curriculum Guidelines prescribe the framework for individual courses of study including the content, duration, and assessment requirements. As with education at lower levels, students with special needs are provided appropriate instruction and training in the mainstream classrooms to the fullest extent possible.

Regardless of the type of school, upper-secondary schools typically have examinations at the conclusion of each semester, with grades on other course assignments figured into the final grades. For the skilled trades, there are the journeyman's and nationally coordinated subject area exams. Upper-secondary schools are required by law to write School Working Guides describing program offerings, teaching methods employed, and the role of the administration. They must also conduct regularly sequenced self-evaluations addressing teaching, administration, and communication.

Higher Education

Contemporary higher education in Iceland dates back to 1847 with the formation of the Theological Seminary. In 1876 the Seminary was followed by the Medical School and then in 1908 the School of Law. These three institutions merged in 1911 with the foundation of the University of Iceland in Reykjavik. The contemporary higher education system encompasses three universities with research responsibilities and more than one program of study in addition to 11 specialized technical, vocational, and art colleges. With the exception of the University of Iceland, fewer than 1,000 students are enrolled at all other higher education institutions. The University of Iceland with an enrollment of 5,900 students (59 percent female), remains the principal institution and it hosts nine faculties (economics and business administration, dentistry, engineering, humanities, law, medicine, natural sciences, social sciences, and theology). Many of the faculties are subdivided into departments. For example, the Faculty of Social Sciences offers majors in ethnology, library and information science, political science, psychology, social anthropology, and sociology. The University of Iceland is a rapidly expanding and diversified institution with a total of more than 50 degree programs. The National and University Library, with 15 branches on and off campus, contains approximately 700,000 volumes with regular subscriptions maintained for 2,600 foreign journals.

The University of Iceland does not have restrictions on admission for those who have passed the matriculation exam. However, in the Faculty of Medicine, the Departments of Medicine, Pharmacy, Nursing, and Dentistry operate under a system wherein the number of students permitted to continue their studies beyond the first semester is limited and based on their performance on an examination. Further, the Department of Pharmacy and the Faculty of Science require students to have matriculated from upper-secondary programs emphasizing math, physics, or natural science.

The University of Akureyri has four departments: Health Science, Management Study, Fishery Studies, and Education. The University College of Education is primarily responsible for the education of teachers at the compulsory school level. This institution also offers a Master of Education Degree with specialization in curriculum studies, special education, educational administration, and educational theory.

Colleges in Iceland offer technical and vocational courses in addition to training in the arts. Most colleges specialize in a single field of study with some colleges belonging formally to the upper-secondary school level while actually operating higher education programs. Courses of study are offered in several areas: physical education, social pedagogy, preschool education, drama, music, fine and applied arts and design, computer studies, management, civil and electrical engineering technology, laboratory and radiology technology, and agricultural science.

Icelandic is the primary language of instruction in higher education, although textbooks are frequently in English, a widely understood language in the country. Operating under a semester system, the academic year begins in September and lasts until May. There are no tuition fees at state-run Icelandic institutions, students only pay registration fees. The few private institutions do charge tuition. Icelandic students attending institutions of higher learning are eligible for state loans. The total loan amount is based on the student's income, with repayment deferred until two years after completion of one's studies. Grants are offered for post-graduate research-oriented studies at universities in Iceland and are based on proposals submitted jointly by a student and a professor.

Higher education assessment in Iceland is typically in the form of oral or written examinations in addition to other course-related assignments. Moreover, university degrees are only conferred with successful completion of a final thesis or research project.

A diploma or certificate is awarded for 2 to 3 years of postsecondary study in drama, fine and applied arts and design, music, computer studies, management, and civil and electrical engineering. A BA degree is granted to students who have completed 3 to 4 years of study in humanities, theology, and social sciences and have finished a final thesis or research project. The BS degree is awarded to students who have completed 3 to 4 years of study in economics, business administration, natural sciences, health subjects, fishery studies, agricultural sciences, and engineering. A BE degree is earned after 3 years of course work designed to prepare students to teach at the preschool, compulsory, or upper-secondary level or for 3 years of study in the area of social pedagogy. A BphilIsl degree (Baccalaureatus Philologiae Islandicae ) is granted upon completion of the program in Icelandic for foreign students. A Candidatus degree is offered only at the University of Iceland and qualifies the recipient for a particular profession or office. This type of degree is essentially an academic/professional degree offered in the fields of theology, medicine, pharmacy, law, business administration, engineering, and dentistry.

The University of Iceland offers a number of postgraduate degree programs. One year post-bachelor degree programs lead to certificates in education, social work, journalism, and mass communication. The MS degree is awarded following successful completion of two years of post-graduate study and a thesis research project in the faculties of medicine, economics and business administration, engineering, and natural sciences. Similarly, the MA degree is awarded after two years of postgraduate study in the Humanities and the Social Sciences in conjunction with a thesis research project. The MEd degree is awarded at the University College of Education following two-years of post-graduate study and completion of a thesis research project. Doctoral level training is only offered at the University of Iceland. There are two types of doctoral programs: a doctor of philosophy degree in Icelandic literature, language, and history and one that is not based on a predefined course of studies, but instead involves independent research by a candidate. As a rule, admission to doctoral programs requires completion of a professional degree (candidatus) or a master's degree.

Although there is no general legislation governing higher education, each institution is directly responsible to the Ministry of Education, Science, and Culture. The law pertaining to the operation of each institution defines its mission as related to education and research, the internal structure, and administrative roles. Within the framework outlined by the state, each university or college designs and updates the aims, scope, and length of programs offered as well as the content of courses.

Students in Iceland have a long history of traveling abroad to study, with 20 percent of higher education students (mostly post-graduate) studying overseas at any given time. The number of foreign exchange students enrolled in Icelandic universities and colleges has increased throughout the last several years. In response to their presence, the number of short intensive Icelandic courses has expanded along with services designed to enrich the daily lives of foreign students. For example, excursions and lectures pertaining to the country and Icelandic society are regularly available.

Administration, Finance, & Educational Research

The Icelandic parliament is responsible for education in Iceland, developing the basic objectives and administrative framework. More specifically, all forms of education fall under the jurisdiction of the Ministry of Education, Science, and Culture. Directed by a Secretary General, the Ministry is divided into three offices: 1) the Office of the Minister and Secretary General, which encompasses four departments (Administration, Financial Affairs, International Relations, and Legal Affairs), 2) the Office of Educational Research and Development, and 3) the Office of Cultural Affairs. Each of the offices is supervised by a Director General. The Ministry is directly responsible for insuring that legislation is implemented, planning system changes, and issuing educationally-based regulations. For example, the Ministry issues National Curriculum Guidelines for compulsory and upper-secondary schools that offer detailed educational objectives with specific information pertaining to how they should be met. However, responsibility for compulsory education shifted from the State to authorities within the local municipalities. While upper-secondary schools are managed by school boards with representation from the Ministry, the local authority, teachers, and students, higher education institutions are the sole responsibility of the Ministry. In general, supervision of education occurs at the local level with final responsibility residing with the Ministry. Eight regional authorities share responsibility for primary education; each authority, headed by a superintendent, appoints an education council of three to five members for four year terms. The eight educational regions are further subdivided into districts with local school boards responsible for running primary schools.

Between 1968 and 1995 an experimental Lab-school operated in conjunction with the University College of Education. The teachers experimented with various teaching methods and arrangements. Many of them were active in teacher education, and were promoters of topics such as educational drama, team teaching, integrated curriculum, the Scottish storyline approach, media-studies, hands-on science, new math, creative writing and inquiry-based reading instruction.

For more than a decade, two funds have assigned grants to developmental projects at the compulsory school level. Each year between 40 and 60 projects are provided support. The projects differ in size and scope, but most are small scale projects dealing with curriculum development in a limited area, small surveys, special education efforts, particular teaching projects, the compilation of curriculum materials or experimentation with teaching methods or assessment procedures.

Ingvar Sigurgeirsson, an Icelandic educational researcher, attempted to identify the extent to which innovative teaching methods have been adopted in schools throughout the country. Head teachers and deputy heads in 200 Icelandic schools (96.6 percent of all compulsory schools in 1994) were interviewed. Respondents in 28 schools (14 percent) emphasized that alternative (to the traditional model) teaching methods were frequently applied (thematic studies, topic work, work with various resources) in their classrooms. The remainder continued use of the traditional form of teaching. Despite this, pedagogical research has expanded dramatically and there has been considerable growth related to teaching ideas and models. In particular, research has focused on cooperative learning, "effective school" and "effective teaching" research, developments in authentic and constructivist learning, and the assessment and promotion of teacher research.

Nonformal Education

An Adult Education Act was introduced in the Althing in 1979 as an effort to organize and coordinate the various educational programs available for adults in Iceland. The Reykjavik School of Adult Education was founded in 1939 and is operated by the city. A variety of afternoon and evening courses are offered. Similar schools run by local authorities have been established throughout the country. In addition, there are private adult education schools devoted to adult education in foreign languages, fine arts, and music.

A few compulsory school and upper-secondary institutions have courses open to mature students. These schools have evening classes with programs comparable to those offered during the day in traditional schools and designed to meet the needs of adults with daytime commitments. Upper-secondary schools generally have educational counseling available to assist students in the selection of programs of study, design of a plan of study, and with academic and personal problems.

Distance education has a relatively strong presence in Iceland. A number of college courses and a few college programs are offered using only network communication. For example, the College of Education at the University of Iceland offers a B.Ed. distance education program. Available data gathered from both lecturers and students suggest some discrepancy in their views regarding the efficacy of the program. The majority of the lecturers felt that all of the aims of the curriculum were equally well-served in the distance program and the traditional program. However, students expressed a need for face-to-face courses as a supplement to the distance learning. A few secondary schools in Iceland have likewise adopted distance learning programs. For example, one program evolved in a rural school based on widespread adult interest in evening courses. When the interest spread beyond commuting distance, correspondence courses and a distance learning program were instituted to fulfill the need.

The Adult Education Center is located in Reykjavik with annexes in other locations throughout the country. Students range in age from 17 to 67 years and the center provides short courses for people who do not have access to other educational opportunities. The courses provide training for independent or semi-independent living to people possessing widely varying physical and psychological handicaps with the goal of enhancing their quality of life. The curriculum is divided into basic living skills training, reading, writing, arithmetic, computer skills, physical exercise, swimming, home economics, arts and crafts, music, and drama. The format of education is very flexible and the each student has his or her own curriculum that is constantly evaluated and modified. As is characteristic of other forms of education in Iceland, there is a strong emphasis on values and needs of the individual.

Teaching Profession

All teachers in Iceland are civil servants with the nature and length of training varying as a function of the educational level. Although preschool teachers are generalists and compulsory education teachers are specialists in one or more subject areas, at both levels, teachers must complete a three-year bachelor of education course of study. Upper-secondary teachers finish a four-year BA or BS degree in addition to 30 credits in pedagogy and didactics.

Teachers in Iceland's preschools complete a 3-year course of study that is two-thirds academic or theoretical and one-third practical at either the Icelandic College for Preschool Teachers or at the University of Akureyri. In-service training for preschool teachers is not officially mandated by law, yet preschool personnel frequently supplement their education after working for 3 or more years in a preschool setting.

Compulsory education teachers complete a three-year course at a teacher training college, and as with pre-school teaching, participation in in-service training is not mandatory. However, collective bargaining agreements enable teachers to attend training sessions.

Legislation requires upper-secondary general academic school teachers complete at least four-years of university-level education. A minimum of two years needs to be devoted to a major subject and one year to the study of education and instructional methodology. Teachers of vocational subjects must be qualified in their field or be a master craftsman with a minimum of two years experience working in the trade in addition to one year of study in education and instructional methodology. Teachers are paid by the state but hired locally. In-service training courses are held annually for upper-secondary school teachers.

Teacher education in Iceland has a history extending more than a century and leading to the founding of the Iceland University of Education. Legislation in 1997 resulted in the merging of three other colleges with the former University College of Education (founded in 1907). These three colleges were the Icelandic College of Early Childhood Education, The College for Developmental Therapists, and the College of Physical Education at Laugarvatn. There are two departments at the Iceland University of Education (the Department of Undergraduate Studies with five divisions and the Department of Graduate Studies).

The postgraduate program offers courses ranging from 15 to 60 units for professionals in education and social work. Study at this level is largely in the form of distance education, with a few periods of residency required. Students either complete their training with a diploma in Education (15-30 units) or with a Med degree (60 units). A full year of study is 30 units. Graduate students specialize in administration, curriculum and instruction, educational theory, special education or educational technology. Approximately 200 students are enrolled in graduate programs.

Icelandic teachers show considerable interest in keeping up with current developments in the education field. Most seminars, workshops, and in-service courses are well attended as are education conferences. A relatively large Institute of Continuing Education also operates within the University. The main purpose of the Institute is to provide education for professionals in education and social work. In addition, the Institute occasionally provides training for other groups and fosters research and development projects. There is a strong emphasis on distance learning and use of information technology within the Institute.

The Iceland University College of Education has approximately 170 faculty members and other permanent staff. All assistant, associate, and full professors teach and maintain a program of research. The University of Iceland has a Department of Education within the Faculty of Social Sciences. This Department offers a Teaching Certification Program designed to train lower-secondary and upper-secondary school teachers. The program is for four years (129 units) and involves specialized study in a particular discipline (BA/BS) along with one year of instructional methodology. An average of 50 students graduate from the program each year.

The University of Akureyri is the youngest of the three Universities offering teacher training. The Faculty of Education began operation in the Fall of 1993 with a BEd program for compulsory school teaching. A Pre-school Program and a Teaching Certification Program are offered as well. The Compulsory School Program has a special focus on science and training teachers for small rural schools. In 1998 the Ministry of Education, Science, and Culture released a report of an extensive external assessment of the Teacher Certification Program at the University of Iceland, the programs offered at the University College of Education, and both the Compulsory School Program and the Teaching Certification Program at The University of Akureyi. The review team, chaired by Dr. Benjamin Levin, Dean of the Continuing Education Division at the University of Manitoba, concluded that all three programs were making ambitious efforts to meet the needs of teachers in training. They commended the Icelandic institutions' use of information technology in teacher education training, concluding that efforts went well in comparison to similar institutions in other nations.

The team also identified areas needing more focused attention. For example, they recommended more long-range planning or a vision. Future aspirations seemed to be contingent upon the actions of others such as the Ministry, and the review team felt that the faculty at each institution should develop a public document outlining their plans for initial and continued training, graduate programs, and research. Other recommendations included greater coordination among the three institutions related to curriculum development, continuing education efforts, and access to and delivery of distance education, increased availability of computer facilities, the need for more active collection of student data, and improving conditions for research.

Teachers in Iceland have historically been relatively poorly paid by international standards. However, there is evidence that this trend is reversing. According to a wage contract, upper-secondary teachers with a BA or BS will receive a starting salary of US$2,083 rising to $2,380 by 2004. According to the previous contract, the minimum starting wage was US$1,309. Teachers with 10 to 15 years of experience will receive raises of US$773. The agreement also included fewer compulsory overtime hours. Although the status of teaching as an occupation has been rather low in the past, there is evidence to suggest that this is changing. One recent study of the vocational plans of Icelandic teenagers revealed that becoming a primary school teacher ranked in third place.

Summary

Compulsory education in Iceland is targeted for all children between the ages of 6 and 16, with those desiring to continue their education beyond the compulsory period pursuing programs of study of various forms in upper-secondary schools. A matriculation certificate from an Icelandic general academic upper-secondary school or an equivalent from an abroad institution is necessary for admission to a higher education institution. There are also a number of technical, vocational, and specialized upper-secondary schools that prepare students to enter the workforce upon completion of required class work and supervised practical experiences. Higher education is offered at three universities in Iceland and several colleges provide training in the arts, agriculture, technology, pre-school education, and physical education.

The majority of Icelandic schools at all levels are fully supported by the State (over 90 percent), yet private schools have become more common. Students with special education needs are usually taught in inclusive-type classrooms, with less than 1 percent of the special needs population educated in separate schools. More than 80 percent of Icelandic children between the ages of 3 and 5 are enrolled in fee-based pre-compulsory education.

The Ministry of Education, Science, and Culture generally oversees the curriculum and publishes a National Curriculum Guide for all levels of compulsory education and for both vocational and academic upper-secondary education. The curriculum guides also contain recommendations pertaining to teaching and assessment; however, teachers actually choose their own methods of classroom assessment and may adopt preferred instructional methods. No general legislation governs higher education in Iceland, but each institution is held accountable to the Ministry. Laws define the mission of each institution with respect to education and research, the internal structure, and administrative roles. However, each university or college is granted relative autonomy to develop and update the aims, scope, and length of programs.

Icelanders have an admirable respect for and interest in their past as well as a contemporary perspective that embodies enthusiasm for current trends and technology and careful planning for the future. Public education in Iceland combines a long history of devotion to learning, cultural values (tolerance, open-mindedness, responsibility to others), emphasis on the unique educational and socio-emotional needs of individual students, and appreciation for contemporary pedagogical knowledge.

Various cultural factors have unfortunately impeded the process of modernization of the educational system in the country over the last few decades. For example, the system has been one that has been highly regulated by a national government that has swayed considerably in terms of support for educational reform based on differing political party agendas. Another problem has been that language barriers have limited teachers' access to primary educational literature. Efforts to evaluate strengths and weaknesses of the education system at all levels have been less than systematic. Further, Icelandic teachers have been underpaid and the profession has tended not to be one associated with high status.

Nevertheless, several recent trends suggest that the future will bring a respectable system to compete with the best educational systems in the world. These trends include the following: 1) unified effort on the part of the state and the public to more effectively replace traditional teaching practices with contemporary ones by developing specific methods for translating accepted theory into practice, 2) transfer of many educational operations from the state to the local level, 3) more focused effort to gather data on school effectiveness, teaching competence, and teacher training, 4) higher pay for teachers and higher status associated with the profession, and finally 5) enhanced interest and use of technology in the classroom.

Iceland has experienced profound cultural shifts over the course of the last century from gaining independence to radical changes in the economy. Compared to transformations that occurred relative to these other realms, modifications to the educational system have been far less dramatic. However, with the consciousness shared by the government, industry, businesses, and the public, it seems inevitable that Icelanders will work to put their ideas into practice.

Bibliography

Durrenberger, Paul, and Gisli Palsson, eds. An Anthropology of Iceland. Iowa City: University of Iowa Press, 1994.

Edelstein, Wolfgang. "The Rise and Fall of the Social Science Curriculum Project in Iceland, 1974-84: Reflections on Reason and Power in EducationalProgress." Journal of Curriculum Studies, 19 (1987), 1-23.

Edelstein, Wolfgang, and David Hopkins. "The Challenge of School Transformation: What Works." A paper circulated in relation to theInternational Workshop for School Transformation in Berlin (February 1998).

Gisli, Palsson, and Paul Durrenberger. Images of Contemporary Iceland: Everyday Lives and Global Contexts. Iowa City: University of Iowa Press, 1996.

Hjalmarsson, Jon. History of Iceland: From the Settlement to the Present Day. Reykjavik, 1994.

Hreinsdottir, Helga. "Distance Teaching at a Secondary School in Iceland." The Delta, Kappa, Gamma, 61 (Spring 1995), 55-58.

Jonasson, Jon Torfi. A Forecast of Diverse Aspects of Education in Iceland, 1985-2010. Reykjavik, 1990.

Ministry of Culture, Science and Education. "Culture and Education: A Foundation for the Future." Reykjavik, February 1996.

——. "Education and the Making of a New Society." Reykjavik, April 1996.

——. "The Educational System inIceland." Reykjavik, 1998.

Ministry of Culture and Education. "External Assessment of the University of Iceland, University College of Education, and University of Akureyri: Report of the Peer Review Group," March 1998.

Sigurgeirsson, Ingvar. "The Challenge of School Transformation: What Works." A paper circulated in relation to the International Workshop for School Transformation in Berlin (February 1998).

Taylor, Ronald. "Functional Uses of Reading and Shared Literacy Activitiesin Icelandic Homes: a Monograph in Family Literacy." Reading Research Quarterly, 30, (1995), 194-219.

—Priscilla Coleman

ICELAND

Republic of Iceland

Lýðveldið Ísland

COUNTRY OVERVIEW

LOCATION AND SIZE.

A small volcanic island located between the Greenland Sea and the North Atlantic Ocean in the Arctic, Iceland is the westernmost European country. Found between Greenland and Europe, just northwest of the United Kingdom, Iceland has an area of 103,000 square kilometers (39,768 square miles) of which 100,250 square kilometers (38,707 square miles) is land and 2,750 square kilometers (1,062 square miles) is water. Its coastline is 4,988 kilometers (3,099 miles) long. Iceland is about the size of the state of Kentucky. Its capital, Reykjavík, is located on the country's southwestern coast. The climate is moderated by the North Atlantic current. In Iceland winters are mild and windy and the summers are cool. Approximately four-fifths of the country is unpopulated and uninhabitable. Glaciers cover more of the land in Iceland than in all of Europe. In addition to glaciers, the island has lakes, mountains, a lava desert, lush green areas, and natural hot springs, making Iceland a spectacle of nature.

POPULATION.

The population of Iceland was estimated as 276,365 in July of 2000, with a slow growth rate of 0.57 percent. Iceland is the most sparsely populated country in Europe, with an average of 3 inhabitants per square kilometer. In 2000, the birth rate stood at 14.86 births per 1,000 population and the death rate at 6.87 deaths per 1,000 population.

The majority of Icelanders live in a narrow coastal belt in the valleys and in the southwest corner of the country. The Icelandic government reports that 99 percent of the population live in urban areas and 60 percent of the people reside in the republic's capital, Reykjavík, or in suburban areas directly outside of the city.

Iceland has a relatively young and middle-aged population—65 percent are between 15 and 64 years, 23 percent less than 14 years, and 12 percent aged 65 and older. It enjoys one of the highest life expectancy rates in the world. Life expectancy at birth was estimated in 2000 at 79.39 years (male: 77.19 years, female: 81.77 years). Iceland also possesses one of the world's highest literacy rates at 99.9 percent (1997 est.). Literature and poetry are a passion of the people and its per capita publication of books and magazines is the highest in the world.

Icelanders descended from the Norwegians and the Celts (Scottish and Irish). The national language is Icelandic, which of all the Nordic languages is the closest to the Old Norse language. The Icelandic spoken in 2001 has changed little since the 12th century. About 91 percent of the people belong to the state church, the Evangelical Lutheran Church. However, Iceland has complete religious freedom, and other Protestant and Catholic churches exist. Given Iceland's remote geographic location, its long-established culture and language, and its small population, it is a tightly-knit homogenous society.

OVERVIEW OF ECONOMY

Iceland's economy is similar to that of its Scandinavian neighbors. It is mainly capitalistic, but the republic has an extensive welfare system, low to no unemployment due to labor shortages, and a wide distribution of wealth. Poverty is practically non-existent. Overall, Iceland's economy is strong and Icelanders enjoy a standard of living similar to many European countries.

Iceland's use of its natural resources has been central to its economic success. The country has achieved a high standard of living and many years of economic stability from the profits of its fish and energy resources. Given Iceland's dependence on fishing and fisheries, the economy is profoundly affected by declines in the number of fish living in its seas and in the Atlantic Ocean. The economy is also sensitive to drops in world prices for its main exports of fish and fish products, aluminum, ferrosilicon, equipment and electronic machinery for fishing and fish processing, and woolen goods.

Foreign trade also plays an important role in Iceland's economy. Exports and imports account for two-thirds of the GDP. Most of Iceland's exports go to the European Union (EU) and ETFA (European Free Trade Association) countries, the United States, and Japan.

Stability is a key aspect of the Icelandic economy, and the performance levels of the economy are not expected to change anytime soon. The policies adopted by Prime Minister Olafur Ragnar Grimsson's center-right government effectively reduced the budget and government deficits, restricted foreign borrowing, controlled rising inflation , and revised agricultural and fishing policies while diversifying the economy and selling state-owned industries. The economy should continue to prosper in the future.

However, one factor that remains the subject of great debate is whether Iceland should join the European Union (EU). The main reservation against EU membership is the fear of losing direct control of Iceland's fishing resources. History plays an important role in this debate, as Iceland was under Danish control for 5 centuries and only became an independent republic in 1944. Therefore it is understandable that freedom and control over their country's own natural resources is an important issue to Icelanders, and does not make EU membership very alluring.

The Icelandic economy has several strong, growing sectors outside of its economic mainstay of fishing. Since the 1990s, the economy has been branching out into the manufacturing and service industries. The financial services, biotechnology, and computer software industries are especially strong and growing. Tourism is another important industry that is increasing. The number of international visitors has risen greatly in 2000, as people are intrigued by the natural wonders of Iceland. Whale watching, visiting hot springs, and horseback riding are popular tourist activities.

Since 2000 one of the government's top priorities has been to manage and control Iceland's booming economy. To ensure stability, the government has adopted conservative fiscal policies and reduced its public debt. Privatization is another policy adopted by the government to better manage Iceland's economy. In the early 1990s, the government launched its privatization policy by selling off many state-owned industries to private buyers. In 2001, Iceland's privatization program continued with the sale of state banks and a state telecommunications company. Monetary policy will continue to focus on price stability and increases are expected in interest rates in order to contain accelerating inflation.

POLITICS, GOVERNMENT, AND TAXATION

Iceland is a constitutional republic that boasts the world's oldest parliament, the Althingi, which was established in 930 A.D. An independent country for over 300 years, Iceland was conquered by Norway in 1262. In the late 14th century, Iceland fell under the rule of Denmark when Norway and Denmark united under the Danish crown.

Abolished in 1800, the Althingi was reestablished in 1843 as a consultative assembly. The Act of Union, a 1918 agreement with Denmark, recognized Iceland as a fully sovereign state united with Denmark under the Danish crown. The British military briefly occupied Iceland in 1940 after Germany invaded Denmark, and then the United States became responsible for Iceland's defense in July 1942 under a U.S.-Icelandic defense agreement. In 1944, Iceland regained its independence and became a republic.

The Icelandic government consists of 3 branches. The executive branch is composed of the president who is chief of state, the prime minister who heads the government, and a cabinet of 9 ministers. The legislative branch consists of 63 members of the Althingi. Finally, the judicial branch has a supreme court and several district and special courts. There are 23 counties ( Syslur ) in Iceland, and there are currently 5 major active political parties: Independence (IP), Progressive (PP), Alliance (A), Left-Green Movement (LGM), and Liberal Party (LP). There is universal suffrage in Iceland and all women and men are eligible to vote once they turn 18 years old.

Iceland has a written constitution and a parliamentary form of government. The president, who is elected by direct popular vote for a 4-year term with no term limit, has limited powers and acts as a spokesperson and head of state. The prime minister and cabinet are responsible for policy-making. There are many women in the Icelandic government; 3 are heads of ministries, and 22 women have seats in the 63-member Althingi .

Members of the Althingi are elected to 4-year terms by popular vote, unless the Althingi is dissolved sooner. Anyone who is eligible to vote, with the exception of the president and the judges of the Icelandic Supreme Court, can run for election in parliament. Members are elected on the basis of proportional representation from 8 constituencies. After every election, the president gives one of the parliamentary leaders of the political parties the authority to form a cabinet, usually beginning with the leader of the largest party.

The present cabinet is a coalition government of the Independence Party (IP) and the Progressive Party (PP), which was formed in May 1999. The conservative Independence Party (IP) has dominated politics in Iceland since the 1990s. After the IP lost its majority in the Althingi with its former coalition partner, the liberal Social Democrat Party (SDP), the IP leader Prime Minister David Oddsson made an alliance with the more conservative Progressive Party (PP). The strategic move was a success and the IP regained its parliamentary majority with 40 Althingi seats. Since the 1990s, the SDP has not had much popular support because of its support of full EU membership for Iceland. The SDP are the only party to fully espouse the benefits of Iceland joining the EU, though in 2001 the PP and the Alliance party began to explore membership.

In 1996, Vigdis Finnbogadottir chose not to run for reelection as president of Iceland after serving 4 popular terms. She was the first woman elected president in the world. With a strong voter turnout, leftist party chairman Olafur Ragnar Grimsson became president by winning with a good margin against 3 other candidates.

In 2001, the center-right coalition government of the IP and PP continues to enjoy solid majority support and is expected to remain in office. However, harsh budgetary austerity measures introduced in the 2001 budget to control the rising economy could conceivably cause a decline in their popularity. The coalition partners remain in agreement on the importance of Iceland's current economic policy and have managed to avoid becoming embroiled in controversial issues, such as membership in the European Union. The largest opposition party, the left-of-center Alliance, has been preoccupied with reorganizing its infrastructure and is not a threat to the IP-PP coalition. The next round of parliamentary elections is scheduled for May 2003.

About 90 percent of the government revenue in 1998 came from income and wealth taxes, as well as indirect taxes such as those placed on corporations, payroll taxes, and value-added taxes on goods and services. The wealthy pay a high income tax , while the country's poorer citizens are exempt from taxation and receive a credit.

INFRASTRUCTURE, POWER, AND COMMUNICATIONS

Iceland enjoys an extensive infrastructure. Roads started to be built in 1900 and construction increased during the 1980s. However, there are still a number of gravel roads in Iceland. The current national road system connects most of the cities and is largely in the coastal areas. It consists of about 12,691 kilometers (7,868 miles) of roads, with 3,262 kilometers (2,022 miles) paved. There are no railroads in Iceland.

Airplanes and ships conduct travel between Reykjavík and Iceland's smaller cities. Additionally, there are daily international flights from Iceland to Europe and North America. There are 12 airports with paved run-ways and 74 with unpaved runways. Because of Iceland's dependence on fishing revenues, there are 9 ports and harbors. The Icelandic merchant marine has a total of 3 ships: a chemical tanker, a container ship, and a petroleum tanker.

Telecommunications are completely modern, and a high percentage of the population use cellular phones (6,746 in 1997). Icelanders enjoy adequate domestic telephone service, and international telephone systems are run by 3 satellite earth stations, one of which is shared with the other Scandinavian countries.

As of 1998, Iceland had 3 AM radio stations and about 70 FM stations. There were 14 television broadcast stations (plus 16 low-power repeaters) in 1997. In 2001, there were 2 national state radio channels and many private stations that broadcast around the clock. The first privately owned station went on the air in 1986 and others soon followed.

In the 1960s the state television station was on the air for only 2 nights a week. Later, television programming was broadcast on the other nights of the week but for years there was no television on Thursdays. Icelanders did not watch television programs in their own language until 1966. Since the 1990s less than half of television programming is in Icelandic and most programs are from the United States and Great Britain and are subtitled.

Computer use is widespread in Iceland and about 82 percent of Icelanders have Internet access at home, at school, or at work. This is reflected in the republic's ever-growing information-technology industry, with the export of software rapidly increasing.

ECONOMIC SECTORS

Iceland's economic sectors reflect the small size of the country. Natural resources are important, especially the fishing industry. For this reason, fisheries dominate Iceland's trade policies and coincide with Iceland's overriding foreign trade interests, especially free trade of fish. All told, the fishing industry contributes 13 percent of GDP. However, other sectors such as biotechnology and tourism are growing.

AGRICULTURE

Agricultural production is a vital part of the Icelandic economy, accounting for 1 percent of its GDP (1998 est.) and employing over 16 percent of Iceland's workforce . Fish is the republic's main agricultural export but Iceland also produces potatoes, turnips, cattle, and sheep.

FISHING.

The fishing industry has grown to symbolize Iceland's economic independence from its Scandinavian neighbors. The Icelandic Ministry of Fisheries reported that in 1999 the total catch of fish by the Icelandic fleet was 1.7 million tons. In 2000, marine products accounted for more than 70 percent of Iceland's total export earnings, making Iceland's economy vulnerable to changing world fish prices. Cod and capelin are the most abundant fish in the catch. Full free trade in fisheries products has been established not only within the European Free Trade Association (EFTA) but also in a series of free-trade agreements with countries in Central and Eastern Europe and in the Mediterranean.

Iceland recognized in the 1970s that it was in danger of depleting its fisheries, and initiated a plan involving Individual Transferable Quotas (ITQs) and Individual Vessel Quotas (IVQs). While complex, the aim of the plan is to fairly allocate fishing rights to those in the fishing industry. Some argue that the plan, because it encourages efficiency and speed, has rewarded larger vessel owners at the expense of smaller operators, thus it is still a matter of some disagreement in Iceland. But overall, most observers feel that the plan has succeeded in managing Iceland's fisheries.

Friction exists between Iceland and its European neighbors over fishing rights. Norway and Russia have complained about Iceland's herring fishing in the Barents Sea between Iceland and Norway. Canada has objected to Iceland's shrimp fishing off the coast of Newfoundland.

The European market is the most important outlet for Icelandic agricultural products. Iceland is a member of the European Economic Area (EEA), which gives it full access to the EU without requiring membership in the body. But progress in fish-processing technology and transport has opened up new trade possibilities with other countries. Exports to Japan are increasing and emerging markets , like China and Korea, hold promise for the future. Attempts to further open markets in the fisheries sector have given Iceland virtually tariff -free access for most of its exports to Europe. While EEA membership has reduced pressure for Iceland to join the EU, it risks being left on the sidelines as the European Union expands.

INDUSTRY

While a small country, Iceland has a strong industrial sector that accounts for 21 percent of its GDP. Like its 2 other main economic sectors, industry in Iceland is centered on its natural resources. Fish processing, aluminum smelting, ferrosilicon production, and geothermal power are its main industries.

ENERGY

. Mineral resources are scarce in Iceland, though efforts are being made to develop deposits of diatomite (skeletal algae). Iceland has vast geothermal power sources (which develop power from the internal heat of the earth) and about 96 percent of the population enjoys geothermal heating in their homes. Geothermal energy plays an important role in Iceland's health-care system, which has shown interest in its medicinal possibilities. The Blue Lagoon, one of Iceland's most popular tourist attractions, is a good example of a combination of the traditional utilization of geothermal energy for economic reasons and its non-traditional utilization for healing. Geothermal energy is also used to generate electricity, and the effluents from power plants (extra thermal energy) can be used for many purposes in connection with spas and the tourist industry.

Iceland's abundant hydroelectric power sources are controlled by the government. The largest power station in Iceland has a capacity of 240 megawatts (mw). Other major hydroelectric stations are at Hrauneyjarfoss (210 mw) and Sigala (10 mw). Efforts are underway by the government to export hydroelectric energy to Europe by transporting it via submarine cables. The government is also investigating ways to expand its aluminum and ferro-silicon melting plants. One such venture is the Nordural aluminum plant, which accounted for a 1 percent growth rate in Iceland's 1998 GDP. Nordural is a wholly-owned $180 million investment by Columbia Ventures of the United States. As of 2001, plans were underway to build a new aluminum plant in the east of Iceland or expand existing ones. A new or expanded plant would increase investment and GDP growth.

SERVICES

Iceland's service sector accounts for approximately two-thirds of GDP, and has been rapidly increasing since the 1990s, particularly in the areas of financial services, tourism, software production, and biotechnology.

TOURISM.

Tourism is a growing and important industry in Iceland. In fact, the national airline, Icelandair, is one of the country's largest employers. According to Statistics Iceland, by 1999 tourism accounted for 4.4 percent of GDP on net receipts of Ikr282 million, up from 3 percent just 10 years earlier. The industry is expanding with the government's promotion of the country's magnificent natural attractions such as whale-watching, hot volcanic springs, glaciers, and horseback riding throughout the country. By 1999 the country boasted 24 hotels and guest-houses. It is a promising economic growth area and its numbers increased by 16 percent in 2000.

BIOTECHNOLOGY.

The sector that is showing the most rapid development is biotechnology. Iceland has unique natural resources and its position on the mid-Atlantic ridge is the source of its many hotsprings and the high-temperature areas where thermophilic bacteria (which thrive on heat) live, which can be utilized in various industries, especially pharmaceuticals. Scientists believe that thermophillic bacteria could lead to the development of better drugs and to more environmentally friendly forms of industry.

Iceland's rather limited human gene pool—due to its homogenous and cohesive population—makes it an invaluable laboratory for the study of the role of genes in the transmission of diseases. However, a fierce debate over genetics and individual rights erupted in Iceland in 1998. An Icelandic biotechnology company, deCode Genetics, wanted to include Icelanders' medical records, family trees (which are meticulously documented in Iceland; some can be traced as far back as over a thousand years ago), and genetic information into a single database. The company claimed the database would be beneficial to the health of Icelandic citizens, while critics argued such a project would simply serve the financial interests of deCode Genetics. The Althingi passed a bill in 1998 which allowed the Ministry of Health and Social Security to grant a license to create and operate an Icelandic Health Sector Database (IHD). In 2000, the Ministry awarded a 12-year license to Islensk erfdagreining, a subsidiary of deCode, to build and run the IHD, which has been operational since 2001.

FINANCE.

Three commercial banks, with branches and savings banks, operate in Iceland. Investment credit funds, insurance companies, private pension funds, and securities firms are among Iceland's financial institutions. During the 1980s, the financial sector was deregulated and reformed to help bring inflation under control.

INTERNATIONAL TRADE

Historically, Iceland has been late in joining major trade agreements. It joined the General Agreement on Tariffs and Trade (GATT) in 1968 and the European Free Trade Association (EFTA) in 1970. It entered into a free trade agreement covering all industrial products with the European Economic Community (now called the EU) in 1972. In the 1990s, Iceland was the last of the EFTA countries to ratify the European Economic Area Agreement (EEA) and did so only after the longest debate in the history of the Althingi. It comes then as no surprise that Iceland has decided at the moment not to become a full member of the EU. Self-protection and self-preservation have characterized Iceland's foreign trade policy since its independence from Denmark.

Iceland's international treaties have strengthened foreign trade. Membership in the EEA in 1994 and the Uruguay Round agreement brought greater market access for Iceland's exports, capital, labor, and goods and services, especially seafood products. Agriculture is heavily subsidized and protected by the government, with some tariffs ranging as high as 700 percent.

The question of Iceland's relationship with the EU and its possibility of becoming a member depend heavily on protection and control of its fishing industry and natural resources. The Icelandic government and the people pay close attention to the EU's resource policy, especially the Common Fisheries Policy, which is based on the premise that fisheries resources are in principle the common property of the member EU states. While this policy may not be a major obstacle to Iceland joining the EU, it could prove to be a stumbling block, calling for a creative solution in order for Icelanders to be comfortable with EU membership.

In 1999, Iceland had total exports of US$2.0 billion and imports of US$2.489 billion. Iceland's trade deficit widened in 2000 due to rapid import growth coinciding with a slow rise in exports. Exports did increase by 3 percent despite a slight contraction in the export of marine products. In 2000, marine exports accounted for 6 percent of total exports as compared with 68 percent in 1999. The drop in marine exports was attributed to a 31 percent growth in the value of aluminum exports—the result of increased production and favorable world prices.

In 1999, 69 percent of Iceland's exports and 66 percent of its imports came from trade with EEA countries. Germany and the United Kingdom are Iceland's most important trading partners in the EEA, with Germany accounting for 13.1 percent of Iceland's exports and 11.8 percent of its imports, and the U.K. accounting for 19.7 percent of exports and 9.2 percent of imports. The United States is the single largest trading partner outside the EEA, with 14.7 percent of exports and 10.9 percent of imports.

MONEY

In light of the recent depreciation of the króna and the threat of high inflation for 2001, the Central Bank of Iceland will likely continue its conservative fiscal policy in 2001-02 to tighten the money supply and lower domestic demand for goods and services. Inflation has eased slightly as a result, although it was recorded at a high 4.6 percent in November 2000 as Iceland's economy over-heated.

The Central Bank announced in March of 2001 that its desired inflation target was under 3 percent, and that it would take action when inflation deviated substantially from that figure.

Public finances are in good shape due to the government's conservative fiscal policies and debt consolidation, which it started in 2000. The government has implemented its program in response to the recent signals of economic troubles, which were caused by high inflation and a growing budgetary deficit.

Privatization and mergers between large private companies continued in 2001. In October of 2000, the government permitted the merger of 2 of the biggest Icelandic banks: the National Bank of Iceland and Agricultural Bank of Iceland. In May of 2000 the country's largest investment and corporate bank, Icelandic Investment Bank (FBA), merged with a leader in retail banking, Islandsbanki, creating IslandsbankiFBA.

POVERTY AND WEALTH

Icelanders enjoy a high quality of life, and poverty is practically nonexistent. Keeping in line with the reserved character of Icelanders, there is not much conspicuous consumption of wealth, despite the high standard of living. This contrasts to life in 18th century Iceland, which was marked by economic troubles and a drop in the population. Economic conditions improved and population numbers grew throughout the 19th and

early 20th centuries. Following World War II, Iceland experienced an economic boom with a marked rise in its standard of living.

Icelanders, regardless of their economic circumstances, have access to the excellent health services. The social security system provides for pension insurance, occupational injury insurance, health insurance, and maternity leave. The government finances health care through taxation, and hospitalization is free. All hospital inpatient services are free and other medical services cost little. Icelanders have one of the longest life expectancies in the world.

The Icelandic government provides a number of welfare services for its citizens, including unemployment insurance, allowances for families who have children, and pensions for the elderly and disabled. Nearly all schools and universities in Iceland are free for its citizens. All students are required by law to attend school until the age of 16. Most students attend a 4-year academic college when they turn 16 and then continue their studies at the University of Iceland. A number of technical and vocational schools exist as well. Access to higher education is quite good for the young men and women of Iceland.

WORKING CONDITIONS

In the 20th century, 2 societal trends affected the Icelandic labor market: higher participation of women and changes in education. More women of all ages—many highly educated—entered the labor market. On the average, though, women still earn less money than men do.

Unemployment is extremely low in Iceland, a trend that does not seem to be changing. One of the downsides of Iceland's low unemployment is that it has created an extremely tight labor market and most Icelanders have very long workdays, some of the longest in Europe. In 2000, the unemployment rate registered at 1 percent, and in October 2000 it reached its lowest level since 1988 at 0.6 percent. Accordingly, there is a high demand for labor, especially in Reykjavík, though less so in the rest of the country. To meet labor demands, the government allowed for an increase in the number of work permits issued to foreigners. Despite the demand for labor, wage increases have been slow to rise.

About 8 percent of Icelandic workers belong to unions. The Industrial Relations Act of 1938 gives workers the right to form unions open to all persons working in a particular trade within a district. For example, carpenters are allowed to form unions in their own home-town or city to ensure their employment rights are being met and protected.

COUNTRY HISTORY AND ECONOMIC DEVELOPMENT

874. Iceland is settled by Norsemen. Ingólfur Arnarson is said to be the first settler, arriving with his family in present-day Reykjavík.

930. The ruling chiefs of Iceland establish a republican constitution and an assembly, the Althingi, the oldest parliament in the world.

1000. Christianity adopted in Iceland; Greenland discovered and colonized by Icelanders.

1262. Iceland enters into a treaty establishing a union with the Norwegian monarchy.

1397. Norway, Sweden, and Denmark form the Kalmar Union. Iceland falls under the sovereignty of the Danish crown but retains constitutional status.

1800. Althingi abolished. Iceland fully under the Danish crown.

1843. Althingi reestablished as a consultative assembly.

1874. Denmark grants Iceland home rule. Icelandic constitution written (revised in 1903).

1918. An agreement between Iceland and Denmark, the Act of Union, recognizes Iceland as a fully sovereign state under the Danish crown.

1940. When the German army occupies Denmark at the start of World War II, British military forces arrive to defend Iceland.

1941. The British pass responsibility for Iceland's defense to the United States under a U.S.-Icelandic defense agreement.

1944. Iceland formally becomes an independent republic.

1949. Iceland becomes a member of the North Atlantic Treaty Organization (NATO).

1968. Iceland joins the General Agreement on Tariffs and Trade (GATT).

1970. Iceland joins the European Free Trade Association (EFTA).

1972. Iceland enters a free trade agreement with the European Economic Community.

1980. Icelanders elect the world's first woman president, Vigdis Finnbogadottir; she goes on to serve 4 4-year terms.

1992. Iceland joins the Western European Union (WEU).

1994. Iceland becomes a member of the European Economic Area (EEA).

FUTURE TRENDS

Iceland has entered the 21st century on an economic high note. A tight fiscal policy, lowered inflation, exceptional social services, access to education, high literacy rates, and extremely low unemployment levels have all contributed to the good quality of life enjoyed by Icelanders.

Foreign trade and policy remain controversial areas, especially membership into the European Union, and the protection of fishing resources will remain high on Iceland's political and economic agenda. Debates over the pros and cons of EU membership will continue both inside and outside of the government, especially since the opposition leftist Alliance party is expected to adopt a pro-EU stance.

In 2001, the government looked to continue its policy of tight fiscal and budgetary restraint and the reduction of public debt. Privatization will likely continue, particularly with banks and financial companies. Interest rate increases are expected to lower any rising inflation. Economic growth is expected to slow somewhat in 2001. Overall, Iceland's economic policy and its political life appear to continue on a stable and carefully charted course.

DEPENDENCIES

Iceland has no territories or colonies.

BIBLIOGRAPHY

Central Bank of Iceland. The Economy of Iceland (Autumn 2000). Reykjavík, Iceland: Central Bank of Iceland, 2000.

Central Bank of Iceland: Welcome to the Central Bank of Iceland. <http://www.sedlabanki.is/interpro/sedlabanki/sedlabanki.nsf/pages/english-front>. Accessed June 2000.

Economist Intelligence Unit. Country Report: Denmark and Iceland, January 2001. London: Economist Intelligence Unit, 2001.

"Happy Family?" from "Survey: The Nordic Countries." The Economist. 21 January 1999.

Iceland. <http://www.iceland.org>. Accessed December 2000.

Information Centre of The Icelandic Ministry of Fisheries. Marine Stocks: Fish, Shellfish and Crustaceans. <http://www.fisheries.is/stocks/index.htm>. Accessed April 2001.

"Norse Code." The Economist. December 1998.

Statistics Iceland. Statistics Iceland, 2000. <http://www.statice.is>. Accessed April 2001.

U.S. Central Intelligence Agency. World Factbook 2000. <http://www.odci.gov/cia/publications/factbook/index.html>. Accessed July 2001.

U.S. Department of State. Background Notes: Iceland. <http://www.state.gov/www/background_notes/iceland_9910_bgn.html>. Accessed July 2001.

World Trade Organization. "Trade Policy Reviews: Iceland: January 2000." World Trade Organization. <http://www.wto.org/english/tratop_e/tpr_e/tp12_e.htm>. Accessed February 2001.

—Lynn Mahoney

CAPITAL:

Reykjavík.

MONETARY UNIT:

Icelandic króna (Ikr). 1 króna (Ikr1) equals 100 aurar. There are coins of 5, 10, and 50 aurar, and 1, 10, and 50 krónur. Paper notes come in denominations of 10, 50, 100, 500, 1,000, and 5,000 krónur.

CHIEF EXPORTS:

Fish and fish products, animal products, aluminum, diatomite, ferrosilicon.

CHIEF IMPORTS:

Machinery and equipment, petroleum products, foodstuffs, textiles.

GROSS DOMESTIC PRODUCT:

US$6.42 billion (purchasing power parity, 1999 est.).

BALANCE OF TRADE:

Exports: US$2.0 billion (1998). Imports: US$2.489 billion (1998).

Icelanders

ETHNONYMS: none

Orientation

Identification. Icelanders speak Icelandic and trace their origins to settlers who came from Norway in the ninth century. According to the Icelandic literary-historic tradition, it was an early settler who gave the island its foreboding name when he was forced to return to Norway because he fished and hunted all summer and failed to lay up hay for his livestock. Today Icelanders enjoy a long life expectancy and one of the highest standards of living in the world.

Location. Iceland is an island in the North Atlantic Ocean, located between Greenland and Norway, just south of the Arctic Circle. It covers 103,000 square kilometers, of which about 1,000 are cultivated, 20,000 pasture, 12,000 covered by glaciers, and 67,000 covered by lava, sands, and other wastelands. Volcanic activity continues. The Gulf Stream moderates the climate. The average annual temperature in Reykjavik, the capital, is 5° C. January averages —0.4° C and July 11.2° C. Average annual precipitation in Reykjavik is 80.5 centimeters.

Demography. The total 1983 population was 237,894, about 2.3 persons per square kilometer. There were 128,221 people living in the area of the capital, and 87,106 in Reykjavik itself. There were 211,716 living in towns and villages of more than 200 people, and 26,178 in rural areas.

Linguistic Affiliation. Icelandic is a Germanic language akin to Norwegian. Some call medieval Icelandic, the language of the Icelandic historic-literary tradition, Old Norse. Icelandic retains the full case structure, and some claim it is virtually unaltered since medieval times, though many modern Icelanders disagree. There are no family names. Everyone has one or two names and is referred to as son or daughter after his or her father. Directories are organized alphabetically by first name.

History and Cultural Relations

A number of medieval Icelandic manuscripts have been preserved. They include a compilation of stories collected just within the living memory of some of the earliest settlers about the settlement itself (the "Book of Settlements"); a grammatical treatise; the family sagas, composed during the thirteenth century about events of earlier periods; the Sturlunga sagas about contemporary thirteenth-century events; lawbooks; biographies of churchmen; other religious writings; and compilations of and commentaries on poetry and mythology. This is a unique record of a stratified society without a state, provided by the people of the society themselves. Romanticized nationalistic treatments of this tradition are common and are related to the ideology of the nineteenth-century Icelandic independence movement. This influence remains in some Scandinavian and other treatments of Icelandic culture and history. While scholars continue to debate the reliability of the documents of the Icelandic literary-historic tradition, most agree about the following history. Iceland was settled by people from Norway beginning in the ninth century. Each nonchieftain belonged to the assembly group of a chieftain. The society was stratified, but there was no state system. In a.d. 930 a General Assembly based on the model of Norwegian assemblies was established. One "law speaker" was elected every three years to memorize the customs and laws and recite one-third of them at each annual meeting of the assembly. He had no executive authority, but he could be consulted on points of law. The chieftains in assembly changed laws and heard cases. The assembly was not a parliamentary structure nor in any way did it resemble a democracy. Under pressure from the king of Norway in 1000, Christianity was adopted as the general religion of the island by arbitration at the meeting of the General Assembly. With Christianity came bishops and, in 1096, a tithe law. Early in the twelfth century the laws were written. A period of strife among chieftains resulted in the concentration of power into the hands of a few families in the thirteenth century, and in 1242 the remaining chieftains surrendered to the king of Norway. In 1380 Norway came under Danish rule, bringing Iceland with it. During the Reformation, in 1550, Catholicism was replaced by Lutheranism. From 1602 until 1787 there was a trade monopoly to prevent Icelanders from trading with British, German, and other fishermen and traders. In 1918 home rule was granted. During World War II, the Germans occupied Denmark and the British occupied Iceland. At the invitation of the British and occupied Iceland, the United States established military bases to free the British for other war tasks. Iceland became an independent republic in 1944. The American bases remain as NATO bases. Their presence is hotly debated in Iceland. Some argue they are Iceland's contribution to NATO while others argue they contradict Iceland's independence. Language, geography, and history place Iceland in the sphere of Scandinavian culture.

Economy

Subsistence and Commercial Activities. Iceland has always depended on trade. The growing season is too short for any crop but grass, cultivated as feed for cattle and sheep. Fishing and hunting have always supplemented livestock production. The relative place of each component in the economic system has changed over the centuries. Initially, livestock production was important both for domestic consumption and for production of woolen goods for trade with Europe for metal and wood products. Fishing provided additional food, and cod may have been traded commercially since medieval times. During the period of Danish colonial rule, livestock production predominated. As Danish rule weakened toward the end of the nineteenth century, and local capital accumulation became possible, fishing communities grew along the coast and merchants developed foreign markets for fisheries products. Modern Iceland has an industrial economy based on fishing, fish processing, and fish exporting. Icelanders enjoy a high standard of living with 508 cars, 525 telephones, 266 television sets, and 2 physicians per 1,000 inhabitants in 1983.

Industrial Arts. Iceland's fishing and fish processing industries are among the most innovative and modern in the world. From their trawlers to their line boats and freezing plants, they take advantage of the most modern technology and innovations in all fields from computer science to plastics. Hydroelectric plants provide electricity for an aluminum processing factory.

Trade. The nation exports fish and fish products and imports most of its consumer goods.

Division of Labor. Most Icelandic adults work, including most married women. As in other industrialized countries, the question is not so much one of division of labor as division of rewards such as wages and prestige. Icelandic women are generally paid less than their male counterparts. Women are usually assigned less desirable and less remunerative work in fish processing plants, for example. They are underrepresented on the faculty of the University of Iceland. This overall inequity may be in the process of changing, however. The economics and politics of gender equality have been issues in Icelandic politics for years, but during the 1980s the Women's List, a national political party, had some electoral success in parliamentary elections.

Land Tenure. In medieval Iceland land tenure depended on being able to appeal to sufficient force to prevent others from taking the land one claimed. Chieftains built coalitions of commoners and entered into alliances with other chieftains. Commoners joined chieftains to insure their land claims. One of the contradictions of the period was an economic system based on concepts of landownership and stratification with no state system of governance to enforce it. From the thirteenth century on many landless people worked for wages or rented from the few landowners. This system continued virtually until independence. In independent Iceland land tenure is less important than sea tenure. In 1975 Iceland led the way to the establishment of the international 200-mile (333-kilometer) offshore limit, which resulted in its cod wars with Great Britain. This limited the right to fish within these limits to Icelandic fishermen, thus reserving a rich fishing area for Icelandic use. This has been and remains one of the most important aspects of Icelandic foreign policy.

Kinship, Marriage, and Family

Kinship. The modern kinship terminology is made up of two systems. One is Ego-centered with terms that indicate specific individuals. The second is a set of collective terms that indicate groups of kin. Each of these two systems is divided into two more or less classificatory or descriptive subsystems. Descriptive terms designate individuals by generation, sex, and laterality. Merging terms refer to individuals with others of other positions of the same category. These systems have evolved from similarly complex medieval systems.

Marriage. Documents of the literary-historic tradition record instances of men having multiple mates if not legal wives. Marriage has never been considered as important in Iceland as in some other societies. Since the early nineteenth century when national statistics began to be recorded, from 13 to 36 percent (in 1977) of births have been illegitimate. Illegitimacy has never been a stigma or hindrance. Of the Nordic countries, Iceland has the youngest age at marriage (24.9 years for males, 22.7 years for females). Divorce has always been easy. The rate of divorce in 1977 was 9.12 per thousand married women. Because of the high rate of cohabitation, this figure does not necessarily have the same social meaning as it might in a society with a higher rate of marriage.

Domestic Unit. In 1703 the average household size was 5.6 persons and remained between 6 and 7 until 1901 when it was 6.2. In 1950 it was 3.8 and in 1960 3.9.

Inheritance. There is no kindred-based land inheritance in Iceland. Personal decisions outweigh structural obligations. The historical-literary tradition records cases of contested inheritance, usually resolved by force in medieval times.

Socialization. Modern Icelanders are very aware of issues of child rearing, child welfare, and education, and these issues sometimes become political. Public-health nurses make periodic house checks on newborns to ensure that they are staying on their growth curves and to help mothers with any problems they may encounter. Day care for preschool children is widely available in and near Reykjavik. In less metropolitan areas parents rely more on kin and friends for child care. Some rural and urban households have au pair girls to help with young children.

Sociopolitical Organization

Iceland has been a stratified society without a state and a colony of Denmark, and it is now an independent republic with an elected president as ritual head of state, a multiparty system, a parliament, and a prime minister who is the effective head of state.

Social Organization. Iceland has a strongly egalitarian ideology and the distribution of income is more equal than in most other societies. Differences in economic status, However, have become greater in recent years under conservative economic policies. There are significant differences between male and female remuneration for similar work. There has never been any Icelandic royalty, though some people have been and remain in privileged positions relative to others. These differences are well documented and discussed, and they sometimes become political issues. Almost all workers belong to well-organized unions.

Political Organization. Since its establishment as a republic in 1944, Iceland has never had a majority government. It is governed by a coalition of several parties that range from the Left to the Right in their political rhetoric and policies.

Social Control. The small size of Iceland and its population makes for greater accessibility than in larger, more populous societies. People know each other and know of each other. This closeness operates as a kind of social control and may be characterized as stifling or as close. Icelanders tend to be tolerant and nonfanatical. When someone says "it is not fair," he or she gets an immediate hearing. The response is not "no one said life was fair." Appeal to egalitarian ideals, concepts of justice and fairness, are given weight rather than disregarded. Discussions and debates, like the political parties, tend to be many-sided rather than two-sided.

Conflict. The literary-historic tradition records many instances of conflict in medieval times. Today conflict tends to be verbal and legal rather than physical. Sometimes there are strikes. One definition of chaos is the interruption of normal middle-class patterns of life. There is no military. There is a small police force and coast guard. There is no national guard. When there are strikes, the policemen's union is as likely as any other to be on strike, so they are not used to break strikes. Since most people belong to unions, nonunion workers are not available to break strikes.

Religion and Expressive Culture

Religious Beliefs and Practices. The Icelandic writer Sigrdur Nordal wrote, "We have been bad pagans for a century and bad Christians for ten." During early times, chieftains were also priests. As in many other primitive societies, their offices were both secular and sacred. After Christianity was introduced, clergy refused to abide by the rule of celibacy, bore arms, and entered feuds. The higher clergy functioned as another kind of chieftain. Most modern Icelanders are confirmed in the Icelandic State Church, a major rite of passage. The clergy have social as well as religious roles. The church is tax-supported, but individuals who do not want to support the church may so indicate on their tax returns and their taxes are used for other purposes. Nonstandard quasireligious movements such as spiritism and folk concepts such as elves and prophetic dreams have some support and go in and out of fashion from time to rime.

Arts. Choral singing may be one of the most popular art forms in Iceland. Rural as well as urban areas support choirs. There is an active theater community, symphony orchestra, new music movement, and visual arts community. There are several art museums, some of which are dedicated to individual artists. There is a small film-making industry. There is a state television station, two state radio stations, and one commercial television station. Icelandic rock-and-roll bands come and go in national and international popularity. One of the problems they must face is whether to perform in the Icelandic language, thus maintaining a strong sense of Icelandic identity but limiting their appeal to the island, or to perform in English (e.g., the Sugarcubes), thus appealing to an international audience but losing some of their national identity. Iceland is a nation of poets and writers. The most internationally known writer is the Nobel Prize winner Halldor Laxness, who has written only in Icelandic. Before he won the Nobel Prize, Icelanders gave him a cool reception because of his challenges to long-held myths of egalitarianism and romantic ideas of independence.

Medicine. Iceland has a modern and advanced healthcare system. All Icelanders participate in this system, and health care is available to all.

Bibliography

Durrenberger, E. Paul, and Gisli Palsson, eds. (1989). The Anthropology of Iceland. Iowa City: University of Iowa Press.

Gelsinger, Bruce E. (1981). Icelandic Enterprise: Commerce and Economy in the Middle Ages. Columbia: University of South Carolina Press.

Rich, George W. (1989). "Problems and Prospects in the Study of Icelandic Kinship." In The Anthropology of Iceland, edited by E. Paul Durrenberger and Gisli Palsson, 53-118. Iowa City: University of Iowa Press.

Tomasson, Richard F. (1980). Iceland: The First New Society. Minneapolis: University of Minnesota Press.

E. PAUL DURRENBERGER

Iceland Icel. Ísland, officially Republic of Iceland, republic (2005 est. pop. 297,000), 39,698 sq mi (102,819 sq km), the westernmost state of Europe, occupying an island in the Atlantic Ocean just S of the Arctic Circle, c.600 mi (970 km) W of Norway and c.180 mi (290 km) SE of Greenland. The republic includes several small islands, notably the Vestmannaeyjar off the southern coast of Iceland. Reykjavík is the capital and largest city.

Land and People

Deep fjords indent the coasts of Iceland, particularly in the north and west. The island itself is a geologically young basalt plateau, averaging 2,000 ft (610 m) in height (Öraefajökull, c.6,950 ft/2,120 m high, is the highest point) and culminating in vast icefields, of which the Vatnajökull, in the southeast, is the largest. There are about 200 volcanoes, many of them active; among them are Katla (4,961 ft/1,512 m), Hekla (4,892 ft/1,491 m), and Laki (2,684 ft/818 m). The eruptions of Iceland's volcanoes have at times also affected the rest of Europe, as with the sulfur-dioxed haze produced by Laki's 1783 eruption, and the ash ejected into the atmosphere during the 2010 eruption of Eyjafjallajökull interfered with air travel in much of Europe. Hot springs abound and are used for inexpensive heating; the great Geysir is particularly famous. The watershed of Iceland runs roughly east-west; the chief river, the Jökulsá, flows N into the Axarfjörður (there are several other rivers of the same name).

The climate is relatively mild and humid (especially in the west and south), owing to the proximity of the North Atlantic Drift ; however, N and E Iceland have a polar, tundralike climate. Grasses predominate; timber is virtually absent, and much of the land is barren. (Some of this is a result of human habitition, which led to deforestation and overgrazing.) Only about one fourth of the island is habitable, and practically all the larger inhabited places are located on the coast; they are Reykjavík, Akureyri , Hafnarfjörður , Siglufjörður , Akranes , and Isafjörður .

The population, until recently largely homogeneous and isolated, is descended mainly from Norse settlers and their slaves. (This homogeneity, combined with longstanding genealogical records, has made Icelanders the subject of fruitful genetic study.) More than 85% of the people belong to the established Lutheran Church, but there is complete religious freedom. The national language is Icelandic (Old Norse), although English, other Nordic languages, and German are also spoken. Virtually all Icelanders are literate; they read more books per capita than any other nation.

Economy

About 15% of the land is potentially productive, but agriculture, cultivating mainly hay, potatoes, and turnips, is restricted less than 1% of the total area. Fruits and vegetables are raised in greenhouses. There are extensive grazing lands, used mainly for sheep raising, but also for horses and cattle. Fishing is the most important industry. Aside from aluminum smelting and ferrosilicon production, Iceland has little heavy industry and relies on imports for many of the necessities and luxuries of life. More than half of Iceland's gross national product comes from the communications, trade, and service industries. Tourism is also important. The country has expanded its hydroelectric and geothermal energy resources to reduce dependence on oil imports, and roughly 90% of all homes are now heated by geothermal energy.

Fish and fish products, aluminum, animal products, ferrosilicon, and diatomite are the main exports; machinery and equipment, petroleum products, foodstuffs, textiles, and manufactured goods are imported. Most trade is with Germany, Great Britain, the United States, and the Netherlands.)

Government

Iceland is governed under the constitution of 1944 as amended. The president, who is the head of state, a largely ceremonial post, is popularly elected to a four-year term; there are no term limits. The head of government is the prime minister. The legislature is the unicameral Althing , whose 63 members are popularly elected to four-year terms. Administratively, Iceland is divided into eight regions.

History

Settlement and Subjection

Iceland may be the Ultima Thule of the ancients. Irish monks visited it before the 9th cent., but abandoned it on the arrival (c.850–875) of Norse settlers, many of whom had fled from the domination of Harold I . The Norse settlements also contained many Irish and Scottish slaves, mainly women. In 930 a general assembly, the Althing, was established near Reykjavík at Thingvellir, and Christianity was introduced c.1000 by the Norwegian Olaf I , although paganism seems to have survived for a time. These events are preserved in the literature of 13th-century Iceland, where Old Norse literature reached its greatest flowering. (Modern Icelandic is virtually the same language as that of the sagas.)

Politically, Iceland became a feudal state, and the bloody civil wars of rival chieftains facilitated Norwegian intervention. The attempt of Snorri Sturluson (1179–1241) to establish the full control of King Haakon IV of Norway over Iceland was a failure; however, Haakon incorporated Iceland into the archdiocese of Trondheim and between 1261 and 1264 obtained acknowledgment of his suzerainty by the Icelanders. Norwegian rule brought order, but high taxes and an imposed judicial system caused much discontent. When, with Norway, Iceland passed (1380) under the Danish crown, the Danes showed even less concern for Icelandic welfare; a national decline (1400–1550) set in. Lutheranism was imposed by force (1539–51) over the opposition of Bishop Jon Aresson ; the Reformation brought new intellectual activity.

The 17th and 18th cent. were, in many ways, disastrous for Iceland. English, Spanish, and Algerian pirates raided the coasts and ruined trade; epidemics and volcanic eruptions killed a large part of the population; and the creation (1602) of a private trading company at Copenhagen, with exclusive rights to the Iceland trade, caused economic ruin. The private trade monopoly was at last revoked in 1771 and transferred to the Danish crown, and in 1786 trade with Iceland was opened to all Danish and Norwegian merchants. The exclusion of foreign traders was lifted in 1854.

National Revival

The 19th cent. brought a rebirth of national culture (see Icelandic literature ) and strong agitation for independence. The great leader of this movement was Jón Sigurðsson . The Althing, abolished in 1800, was reestablished in 1843; in 1874 a constitution and limited home rule were granted; and in 1918, Iceland became a sovereign state in personal union with Denmark. The German occupation (1940) of Denmark in World War II gave the Althing an opportunity to assume the king's prerogatives and the control of foreign affairs. Great Britain sent (1940) a military force to defend the island from possible German attack, and this was replaced after 1941 by U.S. forces.

In 1944 an overwhelming majority of Icelanders voted to terminate the union with Denmark; the kingdom of Iceland was proclaimed an independent republic on June 17, 1944. Sveinn Björrnsson was the first president. Iceland was admitted to the United Nations in 1946; it joined in the Marshall Plan and the North Atlantic Treaty Organization. In 1946, Iceland granted the United States the right to use the American-built airport at Keflavík for military as well as commercial planes. Under a 1951 defense pact, U.S. forces were stationed there (the base was closed in 2006). Björnsson was succeeded by Ásgeir Ásgeirsson.

Relations with Great Britain were strained when Iceland, in order to protect its vital fishing industry, extended (1958) the limits of its territorial waters from 4 to 12 mi (6.4–19.3 km). The conflict, which at times led to exchanges of fire between Icelandic coast guard vessels and British destroyers, was resolved in 1961 when Great Britain accepted the new limits. Kristjárn Eldjárn was elected president in 1968 and reelected in 1972 and 1976. Iceland joined the European Free Trade Association in 1970. In 1971 elections the Independence party–Social Democratic party coalition government, which had governed for 12 years, lost its majority, and a leftist coalition came to power.

The dispute with Britain over fishing rights (widely known as the "cod wars" ) was renewed in 1972 when Iceland unilaterally extended its territorial waters to 50 mi (80 km) offshore and forbade foreign fishing vessels in the new zone. An interim agreement was reached in 1973, whereby the British would limit their annual catch and restrict themselves to certain fishing areas and specified numbers and types of vessels.

In Jan., 1973, the Helgafell volcano on Heimaey island erupted, damaging the town of Vestmannaeyjar. Later in the year Iceland and the United States began revising the 1951 defense pact, with a view toward ending the U.S. military presence.

A split in the ruling coalition over economic policies caused the Althing to be dissolved in 1974; following elections, the Independence party formed a new government. Iceland extended its fishing limits to 200 mi (320 km) in 1975, which, after more skirmishes with Great Britain, was finally recognized in 1976. Vigdís Finnbogadóttir was elected president in 1980, thus becoming the world's first popularly elected female head of state; she was reelected in 1984, 1988, and 1992. Davíð Oddsson, of the conservative Independence party, became prime minister in 1991; his center-right coalition was returned to office in 1995, 1999, and, narrowly, 2003. In 1996, Ólafur Ragnar Grímsson was elected to succeed Finnbogadóttir, who retired as president. The highly popular Grímsson was reappointed to the post by parliament without an election in 2000; he was reelected in 2004.

Oddsson resigned and exchanged posts with coalition partner and foreign minister Halldór Ásgrímsson, of the Progressive party, in Sept., 2004 (Oddsson stepped down as foreign minister a year later). In June, 2006, after the Progressive party suffered losses in local elections, Ásgrímsson resigned as prime minister; he was succeeded in the post by Geir Hilmar Haarde, the foreign minister and a member of the Independence party. The next year, in the May, 2007, parliamentary elections, the Progressives suffered sharp losses and left the ruling coalition; the Independence party formed a new coalition with the center-left Social Democrats; Haarde remained prime minister.

In Oct., 2008, the global financial crisis led to the collapse and government nationalization of Iceland's largest banks, which had taken on enormous debt in order to expand aggressively internationally. Many of the banks' depositors were individuals, companies, organizations, and local governments elsewhere in Europe, and the banks' collapse was aggravated and accelerated when Britain seized their British assets. As a result of the banking crisis, Iceland's currency also dropped sharply in value. The situation stabilized in November when Iceland secured significant loans from the International Monetary Fund and Scandinavian countries, but Iceland experienced a sharp rise in interest rates and unemployment and a sharp drop in housing prices.

In Jan., 2009, the country's severe economic crisis forced the government to resign. An interim center-left minority government, consisting of the Social Democrats and the Left-Green Movement, was formed in February. Jóhanna Sigurðardóttir , a Social Democrat and former social affairs minister, became prime minister; she was Iceland's first woman prime minister and the modern world's first openly gay head of government. Early elections, held in April, resulted in a majority for the ruling center-left coalition.

In June the government agreed to a 15-year plan to repay British and Dutch governments for outlays they made to depositors who lost money in Icelandic banks. The Althing narrowly voted in July in favor of applying to join the European Union. Legislation enacted in August concerning repayment terms for the British and Dutch met with objections from them. A new, more stringent law narrowly passed in December, but broad public opposition to it led the president to refuse to sign it and submit it to a referendum (Mar. 2010) in which the voters overwhelmingly rejected it. A less stringent repayment plan was agreed upon in Dec., 2010, and enacted in Feb., 2011, but the president again refused to sign it and a majority of Icelanders rejected it in a referendum (Apr., 2011). Despite these disagreements over repayment, by the end of the 2011 the country had emerged from its financial collapse and begun to grow again economically.

Bibliography

See V. H. Malmström, A Regional Geography of Iceland (1958); A. Líndal, Ripples from Iceland (1962); B. Guthmundsson, The Origin of the Icelanders (tr. 1967); B. Gröndal, Iceland: From Neutrality to NATO Membership (1971); V. Stefansson, Iceland (1939, repr. 1971); J. J. Horton, Iceland (1983); M. S. Magnusson, Iceland in Transition (1985); E. P. Durrenberger and G. Palsson, ed., The Anthropology of Iceland (1989).

ICELAND

The history of Iceland began around 870 C.E. when Norse settlers arrived from the west coast of Norway, as well as those who had previously settled in Ireland and Great Britain. Some Icelanders would explore eventually the land that came to be known as Greenland; but the majority of the people of Iceland formed a conservative rural society. They were farmers who created a highly-evolved social structure defined by their work with the land. The stories they told, well-known as the Islendinga sogur, or, Iceland sagas, reflected that down-to-earth daily life by which honor was to be measured.

Through the best-known literary character, Odin, Icelanders were not totally without fantasy, myth or fascination with the magical and mysterious. Robert Kellogg, in an introduction to the book, The Sagas of Icelanders, talked about the role Odin as he discussed Egil's Saga, a key story in Icelandic literature:

The patron of all poets was Odin, who was sometimes known as the one-eyed god…Odin gave away his eye in order to drink from the underworld well of the wise god Mimir and thus to acquire wisdom. Egils is not only the beneficiary of Odin's gifts of poetry and magic, but also to some small degree an embodiment of the god.

Iceland has been a Christian country since 1000 C.E., following its ancestral religious roots of Asatru. (An interesting note is that the writings of J.R.R. Tolkein, known best for the Lord of the Rings, emerged from the Codex Regis, the ancient "sacred" manuscript of this pre-Christian belief. While Iceland's citizens currently enjoy the Constitutional benefit of freedom of religion, nearly 95 percent of them are Lutherans, the state-affiliated church. At the end of the twentieth century Iceland's population at 240,000 was about the same size as Cumberland County, Maine, the largest in that state. With the entire country's population occupying only about one-fifth of the land, Iceland is about the size of a medium American city. The people, too, are an interestingly homogenous group. Unlike Americans, all natives have descended from only two groups-the original Nordic and Celtic people who settled there. (Consequently, the population has been the subject of scientific research crucial to the study health and disease throughout the years.) This fact also emphasizes that while statistics might indicate only a small portion of the population engaged in the area of psychical research, or phenomena, it reflects a percentage that in fact might be no lower than many other countries.

Icelandic interest in psychical research goes back many years to the founding of Salarrannsoknafelag Island, the Society for Psychical Research of Iceland in Reykjavik in 1918. The founder was Prof. Einar Hjöleifsson Kvaran (1859-1938), a well-known writer who edited Morgunn, a Spiritualist magazine. A prominent member was Prof. Harald Nielsson (d. 1928) of the University of Reykjavik, who spent five years investigating the phenomena of the medium Indridi Indridason.

Indridi Indridason (1883-1912) was a physical medium, long unknown outside of Iceland. He is believed to be the first Icelander who demonstrated such gifts. When he first demonstrated them in 1905 at a "table-tilting" being held by academic researchers, and reportedly lasted until 1909. The group of investigators were those that later formed the Icelandic Society for Psychical Research. One of Indridason's most chilling communications was the story of a fire in Copenhagen on November 24, 1905. It was not confirmed until a month later when news came by boat from Denmark—the only means the story had of transmittal in those early days of the twentieth century. Other phenomena including materialization s became commonplace during the seances Indridason served.

A prominent Icelandic psychologist and parapsychologist, Erlendur Haraldsson is known worldwide for his work investigations of ESP, and experiences of death. One of his most famous works was, Modern Miracles, based on the life of Indian religious leader, Sathya Sai Baba, known for the miracles that he performed. He serves on the faculty of Social Sciences at the University of Iceland in Reykjavik. In a 1988-989 survey he conducted entitled, "Survey of Claimed Encounters with the Dead," Haraldsson discovered that 31 percent of Icelanders, "…perceived the presence of a dead person." His work continues while he remains a faculty member in social sciences and is perhaps reflective of a few aspects of human daily life that fit into the context their own history and sociology.

Sources:

Berger, Arthur S., and Joyce Berger. The Encyclopedia of Parapsychology and Psychical Research. New York: Paragon House, 1991.

Iceland. http://www.iceland.org/. June 6, 2000.

Noah's Ark Society (Great Britain). The Mediumship of Indridi Indridason. http://www.noahsark.clara.net/ind1.htm. June 6, 2000.

Thorsson, Ornolfur, ed. The Sagas of Icelanders. New York: Viking (Penguin), 1997.

Iceland

Basic Data

Newspapers have been published in Iceland since 1848, when the weekly Thjooolfur brought domestic and foreign news to readers in Reykjavik. From that modest beginning, Iceland has grown to become one of the most voracious newspaper consuming nations in the world. Dozens of newspapers, most of them small weeklies, are published in Iceland, a remarkable occurrence given the fact that Iceland's population is only 280,000 and lives on the perimeter of an island the size of Kentucky.

The most prominent general interest daily newspapers in Iceland are Morgunblaéié (Morning News) and its afternoon rival DV. Morgunblaéié, a conservative morning paper with a circulation of 50,000 and an average size of 36 pages, is both the oldest and the largest. DV, the second largest newspaper in Iceland, is a liberal tabloid with a circulation of 21,000 and an average size of 20 pages.

The first successful attempt to publish a daily newspaper in Iceland was in 1910 when Vísir was founded. Three years later Morgunblaéié was begun. Unlike most Icelandic periodicals of the day, these newspapers emphasized impartiality, seeing their primary function as publishing news rather than polemics. But the development of the powerful four-party system enveloped all newspapers, including Vísir and Morgunblaéié, from the 1920s until the 1970s. Not until instability among the political parties combined with privatization in the late 1960s and early 1970s were daily newspapers freed from party control and encouraged to become independent and professional.

The value of professionalism for Icelandic journalists can be traced to the founding of the Union of Icelandic Journalists (BÍ) in 1942. Because it was born during the heyday of the party press, BÍ's early emphasis was on status, privilege, and collective bargaining rather than professionalism. But as the party system declined, BÍ began to devote time to seminars and conferences on the improvement of journalistic practices. The changeover to a more professional standard of journalism is evident in the "Rules of Ethics in Journalism," a code enforced by BÍ since 1988. It is also evident in the education in journalism and mass communication offered by the University of Iceland.

Radio and television are major sources of news in Iceland. The state-owned Icelandic National Broadcasting Service (RUV) began radio broadcasts in 1930. According to the Broadcasting Act, the RUV is obligated to promote Icelandic language and culture and to honor democratic rules, human rights, and freedom of expression. RUV's Channel 1 broadcasts classical music and documentaries; Channel 2 broadcasts pop music and current affairs. RUV's short-wave station keeps Icelandic sailors current on happenings at home.

Since 1966 RUV has also operated a television station. Its broadcast day begins and ends with news. RUV participates in satellite program exchanges with the Eurovision network and with Nordvision, a union of public television broadcasters. News and information comprise a significant portion of RUV's programming.

Since 1985 the government of Iceland has licensed private broadcasting to complement RUV's public offerings. The result has been an expansion of broadcasting alternatives, much of which is owned by the company Finn Midill.

The highly literate Icelanders also support a large and diverse magazine and book publishing industry. Icelandic periodicals number in the hundreds, and some 1,600 book titles are published every year in Iceland. Among the largest magazine and book publishers are the privately owned Edda and Frodi and the state-run National Centre for Educational Materials. Internet publishing proliferates as well, serving an Icelandic population, 80 percent of whom either have access to or own a computer connected to the Internet.

Many Icelanders worry that the growing influence of English may diminish the preponderance of Icelandic. They cite the fact that two-thirds of television programs broadcast in Iceland are imported, mostly from the United States, and the sale of books written in English is growing. However, most Icelandic newspapers and magazines, as well as their Web sites, are written in Icelandic.

Bibliography

Jeppessen, Karl, and Dennis Moss. "Educational Television in Iceland: The Availability and Utilization of Video Resources in Schools." Journal of Educational Television. 16:1 (1990).

Vilhjálmsson, Páll. "Press History in Iceland: A Study of the Development of Independent Journalism in the Icelandic Daily Press." M.A. thesis. University of Minnesota, 1993.

John P. Ferré

Iceland An island country just south of the Arctic Circle in the north-eastern Atlantic Ocean.

Physical

It is approximately 460 km (285 miles) long by 280 km (174 miles) wide; but only its coastal areas can be used for settlement and agriculture because the rest is a wasteland of ice, ash, and lava flows.

Economy

Hydroelectric power stations provide over three-quarters of the country's electricity needs and geothermal energy is abundant. Six-sevenths of the land area is agriculturally unproductive. The fishing industry is of vital importance to the economy, accounting for three-quarters of exports; other exports are aluminium (produced from imported alumina) and ferrosilicon. Sheep are grazed in coastal areas.

History

Iceland was conquered by the VIKINGS between 874 and 930. Its capital, Reykjavik, was founded, and the country was governed by some 36 chieftains, who met periodically in the Althing, an official assembly. A lawspeaker was appointed, and, in 1005, a Supreme Court. Authority, once derived from the pagan priests and temples, changed with conversion to Christianity in c.1000 to a partnership of Church and Althing. In 1262 Iceland passed to Norway and, in 1380, with Norway to the Danish crown. Under the rule of Denmark since 1380, a nationalist movement achieved the restoration of the Althing or parliament in 1845. Iceland acquired limited autonomy in 1874 and independence in 1918, although it shared its king with Denmark till 1943. It became an independent republic in 1944. An Allied base during WORLD WAR II, it joined the UNITED NATIONS ORGANIZATION and NATO (1949). It engaged in sometimes violent disputes with Britain over fishing limits, resulting in the ‘Cod War’ of 1972–76. In the late 1970s strong opposition to the presence of US bases developed, and Iceland became a nuclear-free zone in 1985. In 1990–91 Iceland attempted to restrict fishing within its territorial waters during negotiations between the European Free Trade Association (EFTA) and the EUROPEAN COMMUNITY (EC) over a common European Economic Area (EEA), which it boycotted. However, following the election of a new centre-right coalition government in April 1991, Iceland managed to secure a restriction on fishing in its waters and introduced measures of economic liberalization, leading to the privatization of many state-owned industries. It also favoured closer relations with the USA, which maintained NATO naval bases in Iceland. The country's worsening economic situation in 1992, caused by losses in the fishing industry (its economic mainstay), led the government to introduce emergency measures and to devalue the króna in 1993. Having finally approved the EEA agreement Iceland made moves towards applying for membership of the EUROPEAN UNION (EU), following the example of Sweden and Finland. In April 1995 a new coalition government was formed, led by David Oddsson, following a general election, and in 1996 Olafur Ragnar Grimsson was elected President.

Iceland

Land and climate

Iceland sits astride the Mid-Atlantic Ridge, which is slowly widening as the ocean is stretched apart by continental drift. Molten lava wells up to fill the gap in the centre of Iceland. Iceland has around 200 volcanoes and eruptions are frequent. Geysers and hot springs are common features. Ice-caps and glaciers cover c.12% of the land; the largest is Vatnajökull in the se. The only habitable regions are the coastal lowlands. Vegetation is sparse or non-existent on 75% of the land. Treeless grassland or bogs cover some areas. Deep fjords fringe the coast.

History and politics

Norwegian Vikings colonized Iceland in ad 874, and in 930 the settlers founded the world's oldest parliament (Althing). Iceland united with Norway in 1262, and when Norway united with Denmark in 1380, Iceland came under Danish rule. During the colonial period, Iceland lost much of its population due to migration, disease and natural disaster. In 1918 Iceland became a self-governing kingdom, united with Denmark. During World War II Iceland escaped German occupation, largely due to the presence of US forces. In 1944, a referendum decisively voted to sever links with Denmark, and Iceland became a fully independent republic. In 1946, it joined the North Atlantic Treaty Organization (NATO). The USA maintained military bases on Iceland. In 1970, Iceland joined the European Free Trade Association. The extension of Iceland's fishing limits in 1958 and 1972 precipitated the ‘Cod War’ with the United Kingdom. In 1977, the UK agreed not to fish within Iceland's 370km (200 nautical mi) fishing limits. The continuing US military presence remains a political issue. Vigdis Finnbogadottir served as president from 1980 to 1996, when she was succeeded by Olafur Ragnar Grimsson.

Economy

Iceland has few resources besides its fishing grounds (2000 GDP per capita, US$27,432). Fishing and fish processing are major industries, accounting for 80% of Iceland's exports. Barely 1% of the land is used to grow crops, and 23% is used for grazing sheep and cattle. Iceland is self-sufficient in meat and dairy products. Vegetables and fruits are grown in greenhouses. Manufacturing is important. Products: aluminium, cement, electrical equipment and fertilizers. Geothermal power is an important energy source. Overfishing is an economic problem.

Political map

Physical map

Iceland Under Danish sovereignty since 1380, Europe's second largest island acquired limited autonomy from Denmark in 1874, when its Assembly, the Althing, gained legislative powers. Moves to achieve independence were finally successful in 1918, when Iceland gained full sovereignty, though its head of state continued to be linked to the Danish crown. Owing to its important strategic location, during World War II it was occupied by British and US troops in 1940 and 1941 respectively. Taking advantage of the German occupation of Denmark at the time, it severed its ties with the Danish King in 1944, when it was declared a Republic, with Sven Björnsson becoming the first President (1944–52). After World War II, it became an important base for NATO, which it joined in 1949. Traditionally, its economy depended on fisheries, which accounted for around 80 per cent of its exports. As its coastal waters became exploited by foreign fishing fleets, it gradually extended its fishing limits, up to 200 miles around the island. This led to a series of Cod Wars, culminating in the temporary breakdown of diplomatic relations with the UK in 1976. In 1980 Vígdis Finnbogadóttir (b. 1930) was elected the first woman President. In the early 1990s, fishing quotas had to be reduced to prevent further decline in fishing stocks. This led to substantial underemployment among its fishermen, and caused a period of economic stagnation which was not overcome until the end of the decade. Iceland's reliance on fishing, which accounted for over 70 per cent of its exports in 2001, has been the main stumbling block in repeated negotiations about membership of the European Union. Despite its lack of formal membership, however, from 1997 it enjoyed virtual free trade with the European Union. In 2001 it entered the Shengen agreement.

Iceland had been a free and sovereign state under the king of Denmark since 1918, and its foreign relations in 1939 were still handled by Denmark. Whoever controlled Iceland commanded the North Atlantic sea lanes and the naval exits into the Atlantic from Europe, and it proved an invaluable Allied air and escort base during the battle of the Atlantic.

On the outbreak of war in September 1939 Iceland maintained its neutral stance and when Germany invaded Denmark in April 1940 it declared temporary independence from Denmark. Initially it refused British protection for fear of provoking German retaliation, but in May the British landed there to pre-empt the Germans, though they guaranteed not to interfere with the country's internal affairs. Canadian troops followed and in July 1941 Iceland came under US protection when the island was defined as being part of the western hemisphere. The same month, at the request of the Icelandic government, US forces relieved the British garrison which was needed elsewhere. Iceland declared itself an independent republic in 1944. During the war British staff officers always referred to it, on Churchill's orders, as Iceland (c), because early in the war one of them had sent a ship to Ireland instead.

Iceland (Ísland) Snæland The Republic of Iceland (Lýdhveldidh Ísland) since 1944. Originally Snæland ‘Snow Land’ from c.850 and then allegedly renamed Iceland from ís ‘ice’ by the first Norse settlers in the 9th century. Their intention was to deter visitors coming to an island which had in fact comparatively moderate annual temperatures (because of the Gulf Stream) and was much warmer than would be expected for a country so far north. Gradually settled beween 870 and 930 by Vikings from Norway, the island formally became subject to the Norwegian king in 1262. When Norway and Denmark were united in 1380, Denmark took control and this was retained until the Germans invaded Denmark in 1940 and the union was broken.

Iceland

Culture Name

Icelandic

Orientation

Identification. Scandinavian sailors discovered Iceland in the mid-ninth century, and the first settler recognized in the literary-historical tradition, Ingólfur Arnason, arrived in 874. The book of settlements (Landnámabók ), which contains information on four hundred settlers, was compiled in the twelfth century. The story set down there and repeated to this day is that a Norse Viking named Flóki sailed to Iceland, but spent so much energy hunting and fishing that he did not lay up hay for his livestock, which died in the winter, and had to return. He then gave the island its unpromising name.

Among the settlers and the slaves the Scandinavians brought were people of Irish as well as Norse descent; Icelanders still debate the relative weight of the Norse and Irish contributions to their culture and biology. Some date a distinctive sense of "Icelandicness" to the writing of the First Grammatical Treatise in the twelfth century. The first document was a recording of laws in 1117. Many copies and versions of legal books were produced. Compilations of law were called Grágas ("gray goose" or "wild goose").

In 930, a General Assembly was established, and in 1000, Iceland became Christian by a decision of the General Assembly. In 1262–1264, Iceland was incorporated into Norway; in 1380, when Norway came under Danish rule, Iceland went along; and on 17 June 1944, Iceland became an independent republic, though it had gained sovereignty in 1918 and had been largely autonomous since 1904.

The sense of Iceland as a separate state with a separate identity dates from the nineteenth-century nationalist movement. According to the ideology of that movement, all Icelanders share a common heritage and identity, though some argue that economic stratification has resulted in divergent identities and language usage.

Location and Geography. Iceland is an island in the north Atlantic Ocean between Greenland and Norway just south of the Arctic Circle. It covers 63,860 square miles (103,000 square kilometers), of which about 620 are cultivated, 12,400 are used for grazing, 7,500 are covered by glaciers, 1,900 are covered by lakes, and 41,500 are covered by lava, sands, and other wastelands. The Gulf Stream moderates the climate. The capital is Reykjavík.

Demography. In 1993, the population was 264,922. In 1703, when the first census was done, the population was 50,358. In 1992, there were 63,540 families that averaged three members. In 1993, the population of the capital area was 154,268.

Linguistic Affiliation. Icelandic is a Germanic language related to Norwegian. Medieval Icelandic, the language of the historical-literary tradition, sometimes is called Old Norse. Icelandic has been said to be virtually unaltered since medieval times, although many Icelanders disagree. There are no family names. Everyone has one or two names and is referred to as the son or daughter of his or her father. Thus, everyone has a patronymic, or father's name. Directories are organized alphabetically by first name. There is some debate about the uniformity of the language. Purists of the nationalist-oriented independence tradition insist that there is no variation in Icelandic, but linguistic studies suggest variation by class. While all the people speak Icelandic, most also speak Danish and English.

Symbolism. The international airport is named Leif Erikson Airport after the first voyager to North America, and a statue of Erikson stands in front of the National Cathedral. A heroic statue of the first settler is in the downtown area of the capital. The nationalist-oriented ideology stresses identification with medieval culture and times while downplaying slavery and later exploitative relations of the aristocracy and commoners. This romantic view of the saga tradition informs nationalist symbolism and nationalist-influenced folklore. There is a whole genre of romantic landscape poetry depicting the beauty of the island. Some of it goes back to the saga tradition, quoting Gunnar, a hero of Njal's saga, who refused to depart after being outlawed because as he looked over his shoulder when his horse stumbled, the fields were so beautiful that he could not bear to leave. More recently, rhetoric about whaling has achieved symbolic proportions as some have viewed attempts to curtail the national tradition of whale hunting as an infringement on their independence. Independence Day on 17 June is celebrated in Reykjavík. Neighborhood bands march into the downtown area playing songs, and many people drink alcoholic beverages. The major symbols of Icelandicness are the language and geography, centered on the beauty of the landscape. Many people know the names of the farms of their ancestors and can name fjords and hills, and the map in the civic center in Reykjavík has no place names because it is assumed that people know them. The folkloristic tradition contains many stories of trolls, among them the ones that come from the wastelands to eat children at Christmas and their twelve sons who play pranks on people. Various features of landscape are associated with stories recorded in the official folklore.

History and Ethnic Relations

Emergence of the Nation. Between 1602 and 1787, Denmark imposed a trade monopoly that restricted imports and kept fishing under its control. A farming elite developed a system of self-contained farms and opposed the development of fishing, which would threaten the supply of cheap labor if relied on. After independence, fishing finally developed. The trade monopoly organized Iceland as a tributary state for mercantile purposes and created a class of farmers with entrenched interests and power to defend them against the fisheries. The trade monopoly created the autonomous Icelandic farm as the primary social, economic, and political unit. When the tributary system became a hindrance to organizing for capitalism, the elite engineered backwardness to serve its interests. This backwardness was not a local dynamic and was not culturally determined but served a large international Danish system. When Denmark's absolute monarchy was replaced by a nation-state, this provided a context for Icelandic independence. Although farmers tried to perpetuate their hold over the economy, industrial fishing became the backbone of the national economy. The "independence struggle" started in the mid-nineteenth century. Nationalist ideology presents the movement as an autonomous great awakening. In the service of the independence movement, the elite developed distinctive images of what it meant to be Icelandic, aided by historians and legalists, folklorists, and linguists. These images described an ideal lifestyle of an elite. Danes thought Icelandic culture embodied the most noble elements in the Norse experience and looked to Iceland for inspiration. Thus, Icelandic leaders could argue that the nation's future should match the glories of its past. Icelandic students in Denmark began to import ideas of nationalism and romanticism. The Icelandic elite followed the Danes in identifying with a romantic image of a glorious Icelandic past. As the Danes began to modernize and develop, they set the conditions for Icelandic independence. Finally it was conditions beyond Danish control—when Denmark was occupied by Germany in World War II, followed by the occupation of Iceland by British and then American troops— that pushed Iceland into independence. Given independence and population growth, along with new sources of outside capital, the government focused on the development of industrial fishing and the infrastructure to support it.

National Identity. The working class identified with national political movements and parties and thus helped ratify the elite's vision of Iceland. The ideology developed by members of the farming elite was one of the individual, the holiness and purity of the countryside, and the moral primacy of the farm and farmers. The most significant individuals were the farmers. This ideology was perpetuated in academic writings, schools, and law. Foreign scholars and anthropologists, along with local folklorists, created a bureaucratic folklorism that considered the intellectual superior to the rural people and the rural people as the most superior of all exotics. Such constructs could not be perpetuated as most people abandoned the countryside in favor of fishing villages and wage work or salaried positions in Reykjavík. Icelanders generalized and democratized the concept of the elite and combined it with competitive consumerism. This led to a new cultural context that weakened the ideology of the farmer elite. The main ideological task of the independence movement was to develop a paradigm that would prove that the nationalistic power struggle would change the lives of ordinary people. The past and the countryside were emphasized as pure, while working people in the cities were considered trash. The folklore movement displaced discussions of competition for power to earlier times and reduced diversity to uniformity in service of the state. As the population grew and the economy turned more toward fishing in the coastal towns and villages, farmers lost their economic place. The main goal of the nationalist ideology that the elite promulgated was to conserve the old order. The glory of the sagas was held up as a model, and certain celebrations were revived to emphasize the connection. However, today most Icelanders live in the area of the capital, and their culture is international.

Urbanism, Architecture, and the Use of Space

In 1991, there were 4,754 farms. More than half the people (154,268) live in the Reykjavík area. The next largest town is Akurery, with a population of 14,799. Keflavík, where the NATO base and the international airport are, has a population of 7,581. The Westman Islands are home to 4,883 people. The realities of daily life for most people are urban and industrial or bureaucratic. Until recently, social life was centered on households and there was little public life in restaurants, cafés, or bars. There is a thriving consumer economy. People are guaranteed the right to work, health care, housing, retirement, and education. Thus, there is no particular need to save. People therefore purchase homes, country houses, cars, and consumer goods to stock them. Private consumption in 1993 reached $10,600 per capita.

Food and Economy

Food in Daily Life. The writer Halldor Laxness once observed that "life is salt fish." During some of the events inspired by the romantic folkloric revival, people consume brennivín, an alcoholic beverage called "black death," along with fermented shark meat and smoked lamb, which is served at festive occasions. Icelanders are famous for the amount of coffee they drink and the amount of sugar they consume.

Food Customs at Ceremonial Occasions. For homecomings and family gatherings, there is usually a sumptuous spread of cakes and pastries, including crullers and thin pancakes rolled around whipped cream.

Basic Economy. The major occupations in 1991 were agriculture, fishing, and fish processing. The main industries were building, commerce, transportation and communications, finance and insurance, and the public sector. Fish and fish products are the major export item. While dairy products and meat are locally produced, grain products are imported. Some vegetables are produced in greenhouses, and some potatoes are locally produced. Other food is imported, along with many consumer goods. In 1993, consumer goods accounted for 37.2 percent of imports, intermediate goods 28 percent, fuels 8 percent, and investment goods 25.8 percent.

Social Stratification

Classes and Castes. There is a lack of extreme stratification in a country that values egalitarian relationships. Working-class people are likely to indicate their class status by language use, incorporating into their speech what purists call "language diseases."

Political Life

Government. Iceland has a multiparty parliamentary system, and there is a written constitution. Presidents are elected for four-year terms by direct popular vote but serve a parliamentary function and do not head a separate executive branch. The parliament is called Althingi after the medieval general assembly. It has sixty three members elected by popular vote for four-year terms. Each party puts forward a list of candidates, and people vote for parties, not candidates. The seats in the parliament are then distributed to parties according to the placement of people in their lists. Thus, elections have more to do with policies and positions on issues than with personalities.

Leadership and Political Officials. After elections, the president asks one party, usually the one with the largest number of votes, to form a government of cabinet officers. There has never been a majority in the parliament, and so the governments are coalitions. The real political competition starts after elections, when those elected to the parliament jockey for positions in the new government. If the first party cannot form a coalition, the president will ask another one until a coalition government is formed. Cabinet ministers can sit in the parliament but may not vote unless they have been elected as members. This cabinet stays in power until another government is formed or until there are new elections. The president and the Althingi share legislative power because the president must approve all the legislation the parliament passes. In practice, this is largely a ritual act, and even a delay in signing legislation is cause for public comment. Constitutionally, the president holds executive power, but the cabinet ministers, who are responsible to the Althingi, exercise the power of their various offices. The parliament controls national finances, taxation, and financial allocations and appoints members to committees and executive bodies. There is an autonomous judicial branch. The voting age is 18, and about 87.4 percent of the people vote. The major parties include the Independence Party, Progressive Party, People's Alliance, Social Democrats, Women's Party, and Citizens/ Liberal Party. Each party controls a newspaper to spread and propagate its views. The mode of interaction with political officials is informal.

Social Problems and Control. There are few social problems, and crime is minimal. There is some domestic abuse and alcoholism. The unemployment rate is very low. Police routinely stop drivers to check for drunkenness, and violators have to serve jail time, often after waiting for a space in the jail to become available. There are no military forces.

Social Welfare and Change Programs

Since independence, there has been a high standard of living. From 1901 to 1960, real national income rose tenfold, with an annual average growth rate over 4 percent. This was the period in which the national economy was transformed from a rural economy based on independent farms to a capitalist fishing economy with attendant urbanization.

Gender Roles and Statuses

The Relative Status of Women and Men. There is more gender equality than there is in many other countries. The open nature of the political system allows interested women to organize as a political party to pursue their interests in the parliament. There are women clergy. Fishing is largely in the hands of men, while women are more prominent in fish processing.

Marriage, Family, and Kinship

Marriage. There is a relative lack of formal marriage, and out-of-wedlock births (13 to 36 percent) have never been stigmatized. Women frequently have a child before they marry. Many people are related to numerous half siblings from their parents' other children by other mates.

Domestic Unit. The domestic unit is the household, and larger kin groups come together for annual reunions. Friendship and other connections are very important, and many people who are referred to by kin terms are not genealogically related.

Socialization

Infant Care. Infants are isolated in carriages and cribs, not continuously held. Public health nurses check on newborns to be sure they are on the growth curves and check for signs of neglect, abuse, or disease. Since both men and women usually work, it is common for children to be kept in day care centers from an early age.

Child Rearing and Education. Children are centers of attention, and classes are given on child rearing and parenting. Thus, even teenagers are familiar with approved methods of child rearing. Education is respected and considered a basic right. University education is available to all who want it and can afford minimal registration fees. Education is compulsory between ages 7 and 16 but may be continued in middle schools or high schools, many of which are boarding schools.

Higher Education. A theological seminary was founded in 1847, followed by a medical school in 1876 and a law school in 1908; these three schools were merged in 1911 to form the University of Iceland. A faculty of philosophy was added to deal with matters of ideology (philology, history, and literature). Later, faculties of engineering and social sciences were added.

Etiquette

Social interaction is egalitarian. Public comportment is quiet and reserved.

Religion

Religious Beliefs. The state church is the Evangelical Lutheran Church, of which 92.2 percent of the population are nominal if not practicing members. Other Lutherans constitute 3.1 percent of the population, Catholics 0.9 percent, and others 3.8 percent. There is a Catholic church and churches of other groups in Reykjavík. There are many Lutheran churches, and their clergy substitute for social service agencies. Other religions include Seventh-Day Adventists, Pentecostals, Jehovah's Witnesses, Bahai, and followers of the Asa Faith Society, which looks to the gods represented in the saga tradition. Less than 2 percent of the population in 1993 was not affiliated with a religious denomination. Confirmation is an important ritual for adolescents, but many who are confirmed are not active.

Medicine and Health Care

Universal medical care is provided as a right. There is a modern medical system.

Secular Celebrations

Most holidays are associated with the Christian religious calendar. Others include the first day of summer on a Thursday from 19 to 25 April, Labor Day on 1 May, National Day on 17 June, and Commerce Day on the first Monday of August. These holidays are observed by having a day off from work and possibly traveling to the family summer house for a brief vacation.

The Arts and Humanities

Support for the Arts. There is an art museum in Reykjavík, and several artists have achieved the status of "state artists" with government-funded studios, which become public museums after their deaths. There is a theater community in Reykjavík. Literature has a long history.

The State of the Physical and Social Sciences

The University of Iceland is the center for scientific research. There is much work on geothermal energy sources. The National Science Foundation funds research, and Iceland belongs to international federations for the support of physical and social science research. There is a faculty of engineering and a faculty of social science at the university.

Bibliography

Durrenberger, E. Paul. The Dynamics of Medieval Iceland: Political Economy and Literature. University of Iowa Press, 1992.

——. Icelandic Essays: Explorations in the Anthropology of a Modern Nation, 1995.

—— and Gísli Pálsson. The Anthropology of Iceland,1989.

Pálsson, Gísli. Coastal Economies, Cultural Accounts: Human Ecology and Icelandic Discourse, 1990.

——. The Textual Life of Savants: Ethnography, Iceland, and the Linguistic Turn, 1995.

—— and E. Paul Durrenberger. Images of Contemporary Iceland: Everyday Lives and Global Contexts, 1996.

—E. Paul Durrenberger

Iceland

The population of Iceland is almost entirely descended from the original settlers from Norway in the late ninth and early tenth centuries.

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