- Much of the world, if it knows anything about Iceland,
thinks of the treeless northerly island as small, rich, smug and dull.
A great place to buy cod and see the northern lights but you wouldn't want
to live there.
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- Then Grimsvotn exploded all over Europe. The volcano,
which lies underneath Iceland's vast Vatnajokull glacier, erupted this
week sending a column of ash 12,000 metres into the air, dousing first
Scandinavia, then threatening to coat countries as far south as central
Europe. Hundreds of passenger jets were grounded, a host of transatlantic
flights - up to 500 of them cross Iceland every day - had to be diverted.
Thousands of people were made to stop and think about Iceland.
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- When the dust settles it could be remembered as Mother
Nature's little reminder that this nation of less than 300,000 is more
influential than many of us had realised.
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- >From the ethereal pop star Bjork, who headlined the
biggest global television event of the year at the opening ceremony of
the Athens Olympics, to Iceland's glamour-girl first lady, Dorrit Moussaieff,
who switched a career in jewellery design and socialising in London to
marry President Olafur Ragnar Grimsson, Iceland is as cool as the adverts
tell us.
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- If the volcano continues to erupt it will begin to melt
the glacier, causing floods and damage to roads and bridges. But for the
marketeers looking to get the country some northern exposure, Grimsvotn
is a welcome blowout.
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- It is not just ash that is coming our way, it's Icelandic
business, which, more than likely, has already settled on a high street
near you.
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- Iceland is one of the planet's most successful societies.
Before the Second World War it was one of the poorest countries in Europe.
Now its people are among the richest on earth. Not that there are many
of them mind you, only 290,570 at the last count, but Icelanders certainly
know an opportunity when they see one. For example, Iceland was a Danish
colony, but with Denmark occupied by the Nazis, who themselves were more
than a little pre-occupied by the British and then the Americans, Iceland
seized the opportunity to declare independence in 1944. It has been on
the up ever since.
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- It always knew how to punch above its weight. Documents
that have recently come to light have shown how successive American policymakers
were irritated by Iceland constantly upping the price of its strategic
Cold War location. Iceland, for example, gave the US a major base at Keflavik,
in exchange for a US commitment to defend Iceland, which, uniquely, joined
Nato without an army.
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- When in the 1970s Iceland fought the famous cod wars
with Britain and Germany, elbowing British trawlers and the Royal Navy
out of the ever-expanding slice of the Atlantic that they claimed, its
diplomats, albeit more subtly, were reminding their allies just how important
it was for the US to be able to keep an eye on Soviet submarines from the
island, and just how important a base it would be in case of a war.
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- It even provided a venue for the first act in ending
the Cold War. The dramatic Reagan-Gorbachev summit took place in Reykjavik
in 1986. It is now consigned to history, but Iceland emerged from it as
one of the most dynamic countries in Europe.
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- Because of the importance of its fishing lobby the country
never joined the European Union, but today it skilfully manages to gain
all the benefits associated with EU membership without many of the downsides.
It is, if you will, a kind of semi-detached member, but not one whose example
would actually enthuse Britain's Eurosceptics. Iceland adopts some 80 per
cent of European legislation but has no influence in the making of these
laws.
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- Today the question of EU membership is, like Iceland's
other volcanoes, dormant, but it does constantly grumble beneath the surface
of politics here, not least because tariffs put up to protect Icelandic
agriculture and fisheries make life in Iceland extremely expensive compared
with the rest of Europe.
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- That too is part of an ongoing angst in Iceland about
the future of the country, which until only recently was so poor. The government
wants to create jobs, especially now that the once all-powerful fishing
industry is in serious decline. The irony of this, however, has been that
Iceland, having virtually no unemployment, is now suffering an acute labour
shortage, so construction and other dirty jobs are being snapped up by
Poles, Balts and others.
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- Indeed, with much of the population now clustered in
the greater Reykjavik area, tiny fishing villages are dying. Today the
fishing industry employs barely 10,000 people, and next year it is expected
that it will no longer be the largest foreign exchange earner in the country.
Services, which includes everything from banking to tourism, are set to
outstrip fishing, which was once the bedrock of Icelandic prosperity. Today,
the well-educated Icelanders would rather work in software development
than a dangerous trawler or smelly fish factory, and that is increasingly
what they are doing.
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- But, more than this, privatisation, both at home and
abroad, has for the first time created a small group of super-wealthy Icelanders.
Some of these have recently begun moving to London, and some of their companies
too are increasingly being registered in Gibraltar or the Cayman Islands.
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- While a significant proportion of Icelandic foreign investment
is being made in Scandinavia, in banking and insurance, a huge amount of
money is also flowing to Britain. In the past two weeks Icelandair has
bought a more than 10 per cent share in easyJet. The Icelandic group Baugur
already owns the toy shop Hamleys and the fashion group Oasis, whose outlets
include the high-street chains Karen Millen and Whistles.
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- Another group, Bakkavor, has made major inroads selling
chilled produce to Tesco and Marks & Spencer. It has also bought 20
per cent of the food company Geest and is poised to buy more. Last month
SIF, an Icelandic fish produce firm, bought the French food company Labeyrie.
Icelandic firms have also bought into a British investment bank, the Singer
& Friedlander Group.
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- Growth in Iceland is running at some 6.4 per cent, compared
with 2 per cent in the eurozone. Such phenomenal success has made Iceland's
stock market Europe's best performer, although that winning streak may
have come to an end. The past two weeks have seen the index plummet by
16 per cent. "There is a bit of panic-selling in the market,"
Agla Hendriksdottir of Islandsbanki, the country's third largest bank,
was quoted as saying.
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- While Icelanders are proud that some of their compatriots
are making it big, especially abroad, there is also a sense of nostalgia
among many for a past, in which no one was rich and everyone more or less
equal.
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- "I was brought up in the most egalitarian society
I can imagine," says Arni Bergmann, a writer and self-professed "old
leftist". He laments the concentration of financial power in the hands
of a few families, and also notes that one firm in particular owns a dangerously
large slice of the country's media. "There is a feeling of powerlessness,"
he says.
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- Mr Bergmann may be right, but, being among the richest
people on the planet and with an excellent, intact and generous social
security network, few Icelanders are going to do much more than moan about
it. Indeed, with cheap flights now operating to Stansted, Copenhagen and
other places, Icelanders can now travel abroad, shop abroad and party abroad
like never before. And, give or take a little ash, that is exactly what
they are doing - or in some cases overdoing with fatal consequences.
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- With peacekeeping the thing for modern armies Iceland
has not wanted to be left behind, even though it has no army. The government
has also supported the US politically in all three recent major conflicts,
in Kosovo, Afghanistan and Iraq. So in their wake Iceland has developed
what might be called a boutique peacekeeping skill, which is running airports.
After running Kosovo's Pristina airport until earlier this year, 17 Icelanders
moved on to take control of Kabul airport.
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- The Icelandic media has been dominated by a row set off
by a suicide bomber in Kabul's Chicken Street on 23 October in which three
Icelandic peacekeepers were lightly injured, but an American female translator
and an 11-year-old Afghan girl was killed. The row was sparked off when
it was discovered that, far from being on heroic active duty, the head
of the Icelandic peacekeeping unit in Afghanistan, Colonel Halli Sigurdsson,
was engaged in an hour-long haggling session over a rug. Chicken Street
is famous for its jewellery, carpet and antique shops, so foreigners and
uniformed soldiers especially have been warned to keep away, lest they
make tempting Taliban targets.
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- To make matters worse, when the lightly injured peacekeepers
swaggered home through Reykjavik airport two of the three wore T-shirts
which said, on the front: "Chicken Street: Shit Happens" and
on the back, alongside a large skull, "Survivor: Afghanistan".
One Icelandic journalist bemoaned in private: "When people get killed,
when it is serious, we have so little experience, we have no idea how to
react." On Wednesday, however, Iceland's Foreign Minister, David Oddsson,
did react, recalling Colonel Sigurdsson from Kabul, but not before a row
had developed, which included questions such as how come Colonel Sigurdsson
had become a colonel, since the country had no army, and in the same vein,
what were Icelanders doing in Kabul, in full uniform, armed with machine-guns
and grenades?
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- The opposition to Iceland's centre-right coalition is
accusing the government of creating an army by stealth and with no debate
in parliament. According to Gudmundur Arni Stefansson, a deputy for the
opposition Social Democratic Alliance: "Iceland has no army, so why
are we trying to contribute to a military effort? We have earlier contributed
to peacekeeping efforts in the Balkans with doctors, nurses, journalists
and lawyers. I have to say that we should stick to what we know how to
do, and soldiers we are not." The Foreign Minister, Mr Oddsson, insists
that the men in Kabul "are not soldiers". But Ogmundur Jonasson,
parliamentary leader of the Left-Green Party, was quoted as saying: "It
is not surprising that the Icelandic government tries to demonstrate that
the Kabul force does not constitute a military force. Unfortunately the
Foreign Minister's arguments are extremely unconvincing."
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- ©2004 Independent Digital (UK) Ltd. All rights reserved
http://news.independent.co.uk/europe/story.jsp?story=579615
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