Iceland struggles for self-sufficiency

Unemployment low, cost of living high


MYVATN, Iceland – If you want a better understanding of what sustainable development means, come to Iceland, where the future depends on the sound management of land and sea resources.

The United Nations has ranked Iceland as the second-best country in the world to live in, but this circumpolar island is still very much a remote place, facing many of the same challenges, possibilities and choices as Canada’s North, despite its relatively large population of 280,000 and high standard of living.

Iceland’s government is much older than Nunavut’s, with the first Icelandic legislature founded in 974 A.D. Thanks to the Gulf Stream, it’s warmer than Nunavut, too, with temperatures, ranging from -11 C to 18 C.

But because Iceland is an independent nation, there’s a great deal of pressure to create a self-sufficient, sustainable economy and overcome the threats of climate change, over-fishing, environmental pollution and stresses from living in a small, northern society.

To achieve some economic stability, Iceland has tried to capitalize on its tourism potential.

Every year, tourists descend on the unique landscape around Lake Myvatn to see its ancient craters, bubbling hot mud flats, lava fields, marshes teeming with waterfowl and its “lake balls,” perfectly round algae formations called “kœlusk’tur,” or “balls of shit” in Icelandic. The only other place they can be found is Lake Akan on Japan’s Hokkaido Island.

In September, the residents of Myvatn held their first annual algae ball festival with a “lake-ball barbecue” and a “lake-ball ball.” Not too bad for a lake whose name in Icelandic means “black fly,” due to the hordes of insects thriving there during the brief summer.

But Lake Myvatn’s unique attractions also need to be protected from the impact of too much tourism development.

“It’s an indelicate balance,” said Arni Einarsson, director of the Myvatn Research Centre.

By tapping underground hot water for heat and power and drawing on its hydroelectric potential for electricity, Iceland wants more self-sufficiency because, like the eastern Arctic, it’s also dependent on shipped-in fuel. Iceland wants to strengthen the economy by selling its power cheaply to industry, as well.

Mini-hydroelectric power plants already supply some communities with electricity, and there are also larger projects, such the giant dam at Krahnjukar, in East Iceland, which, when finished, will feed a power-hungry aluminum smelter nearby.

Icelandic government and power officials say this massive project, which will affect 10 per cent of Iceland’s landmass, can deliver foreign cash, provide jobs and lower greenhouse-gas emissions.

“Power-intensive industrial development can be said to be the most direct and effective way Iceland can contribute to the fight against the greenhouse effect,” said Thorsteinn Hilmarsson of Iceland’s national power company.

“Locating an aluminum smelter in Iceland, where it can be operated by hydropower rather than in areas where electricity is generated by fossil fuels, can therefore reduce CO2 (Carbon dioxide) emissions globally.”

Opponents of the project say it may appear to be sustainable in the short term, but will leave lasting damage on the environment.

Iceland is also aggressively developing its fisheries into a $55-billion national industry that accounts for 2.2 per cent of the world’s fish production – an “absurd” level for such a small place, says Iceland’s president Olafur Grimsson with some pride.

Only 50 years ago, some Icelanders still lived in turf houses, eking out a living from small-scale farming and fishing, “eating what they could catch,” in the words of one Icelander.

Ten years ago, 10,000 Icelanders survived by fishing, but there are now only 5,000, due to regulation that favours larger fleets. Many Icelanders, like Borir Halfdanarsson, who works at a Canadian-owned Alcoa smelter near Reykjavik, have left the farms and boats of remote coastline villages for the big city and better-paying jobs.

“Maybe this is just progress,” Halfdanarsson said.

Now, it’s giant trawlers that rake up cod and land it on-shore for processing. Akureyri’s fish plant employs 95 people and produces 45 tonnes of fish a day. The plant produces fresh and frozen filets, packages guts for industrial use and makes dried fish heads for export to Africa.

Following Governor General Adrienne Clarkson’s tour of the fish plant during her recent state visit to Iceland, Grimsson applauded his country’s “dynamic” fishing industry and its success in changing fishing from a cottage industry into a global player.

“It was a fundamental struggle for our survival. It was not about business,” Grimsson said.

Grimsson defended Iceland’s regulation of the fishing industry, crediting it with stabilizing the economy.

“Now we believe we can be major players in the fishing business.”

Throughout its economic transformation, Iceland has managed to maintain a very low unemployment rate of 2.9 per cent.

However, Iceland is still extremely expensive, its housing is over-crowded and pricey, and many workers hold down two jobs simply to make ends meet. This leaves some to wonder how sustainable the nation’s development will prove to be.

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