Settled by Norwegian and Celtic (Scottish and Irish) immigrants during the late 9th and 10th centuries A.D., Iceland boasts the world's oldest functioning legislative assembly, the Althing, established in 930. Independent for over 300 years, Iceland was subsequently ruled by Norway and Denmark. Fallout from the Askja volcano of 1875 devastated the Icelandic economy and caused widespread famine. Over the next quarter century, 20% of the island's population emigrated, mostly to Canada and the US. Limited home rule from Denmark was granted in 1874 and complete independence attained in 1944. Literacy, longevity, income, and social cohesion are first-rate by world standards.
Country profile: Iceland
A sparsely-populated North Atlantic island, Iceland is famous for its hot springs, geysers and active volcanoes. Lava fields cover much of the land and hot water is pumped from under the ground to supply much of the country's heating. Iceland became an independent republic in 1944. Dominated over previous centuries by Norway and Denmark, it does not hesitate nowadays to defend its interests.
It has extended its territorial waters several times since the end of the 1950s to protect its fishermen and their main catch of Atlantic cod from foreign fleets.
Iceland remains outside the EU but, although it has no armed forces, it is a member of Nato. In 1985 it declared itself a nuclear-free zone.
The last US troops left in September 2006. American forces had been stationed in the country without a break since World War II. The US says it will continue to defend Iceland as a Nato ally.
Traditionally a whaling nation, Iceland abandoned the practice in 1989 in line with an international moratorium. It later resumed scientific whaling, intended to investigate the impact of whales on fish stocks, and in 2006 it announced a return to commercial hunts. The move was condemned by environmental groups.
Iceland enjoys a standard of living among the highest in the world. For many years its prosperity depended on the fishing industry. While fish still makes up a large proportion of exports, it now accounts for less than 10 per cent of gross domestic product.
The economy is developing in new areas, not least tourism. Banking and finance reforms have helped to fuel exceptional growth, though there have been worries about economic overheating. Icelandic business has made major investments abroad.
There has been substantial investment in a major industrial aluminium smelter project. Environmentalists have protested that the associated hydroelectric schemes, including the Karahnjukar dam, are being pushed through at the expense of fragile wildlife habitats.
- Full name: Republic of Iceland
- Population: 292,000 (via UN, 2006)
- Capital: Reykjavik
- Area: 103,000 sq km (39,769 sq miles)
- Major language: Icelandic
- Major religion: Christianity
- Life expectancy: 79 years (men), 82 years (women) (UN)
- Monetary unit: 1 krona = 100 aurar
- Main exports: Fish and fish products, metals
- GNI per capita: US $46,320 (World Bank, 2006)
- Internet domain: .is
- International dialling code: +354
President: Olafur Ragnar Grimsson
Prime minister: Geir Haarde
Geir Haarde, head of the conservative Independence Party, took office in June 2006.
He succeeded Progressive Party leader Halldor Asgrimsson, who resigned after his party's poor showing in local elections in May. He had come under pressure over economic worries, including inflation and rising interest rates.
Geir Haarde, a former foreign minister, says he will focus on these problems as well as the issue of Iceland's defence following the withdrawal of US forces from the country.
His predecessor became premier in September 2004 under a deal which prolonged his party's coalition with the Independence Party. Both parties have governed together since 1995.
National radio and TV services are provided by the Icelandic National Broadcasting Service (RUV), a public-service broadcaster owned by the state.
The RUV is obliged to promote the Icelandic language and the nation's history and cultural heritage. Its services are funded by a licence fee, and by advertising revenues.
The Icelandic constitution guarantees press freedom. There is a wide range of publications, which includes privately-owned and party-affiliated newspapers.
The press
Television
Radio
Iceland's Scandinavian-type economy is basically capitalistic, yet with an extensive welfare system (including generous housing subsidies), low unemployment, and remarkably even distribution of income. In the absence of other natural resources (except for abundant geothermal power), the economy depends heavily on the fishing industry, which provides 70% of export earnings and employs 4% of the work force. The economy remains sensitive to declining fish stocks as well as to fluctuations in world prices for its main exports: fish and fish products, aluminum, and ferrosilicon. Government policies include reducing the current account deficit, limiting foreign borrowing, containing inflation, revising agricultural and fishing policies, and diversifying the economy. The government remains opposed to EU membership, primarily because of Icelanders' concern about losing control over their fishing resources. Iceland's economy has been diversifying into manufacturing and service industries in the last decade, and new developments in software production, biotechnology, and financial services are taking place. The tourism sector is also expanding, with the recent trends in ecotourism and whale watching. Growth had been remarkably steady in 1996-2001 at 3%-5%, but could not be sustained in 2002 in an environment of global recession. Growth resumed in 2003, and estimates call for strong growth until 2007, slowly dropping until the end of the decade.
Icelandic natural resources include fish, hydropower, geothermal power, diatomite
strategic location between Greenland and Europe; westernmost European country; Reykjavik is the northernmost national capital in the world; more land covered by glaciers than in all of continental Europe
Icelandic religion is Lutheran Church of Iceland 85.5%, Reykjavik Free Church 2.1%, Roman Catholic Church 2%, Hafnarfjorour Free Church 1.5%, other Christian 2.7%, other or unspecified 3.8%, unaffiliated 2.4% (2004).
Natural hazards in Iceland include earthquakes and volcanic activity.
Travel Advice on Iceland
SUMMARY
- The threat from terrorism in Iceland is low but you should be aware of the global risk of indiscriminate terrorist attacks which could be against civilian targets.
- Around 70,000 British tourists visit Iceland every year. Most visits to Iceland are trouble-free. The main type of incident for which British nationals require consular assistance in Iceland is for replacing lost and stolen passports. Petty crime does occur but at a low level compared to other European countries.
- We strongly recommend that you obtain comprehensive travel and medical insurance before travelling and, if appropriate, that this includes cover for adventure activities. You should check any exclusions, and that your policy covers you for the activities you want to undertake. Please see: Travel Insurance
SAFETY AND SECURITY