|General background: 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.
Area comparative: Slightly smaller than Kentucky
Climate: Temperate; moderated by North Atlantic
Current; mild, windy winters; damp, cool summers
Terrain: Mostly plateau interspersed with
mountain peaks, icefields; coast deeply indented by
bays and fiords.
Population: 279,384 (July 2002 est.)
Ethnic groups: Homogeneous mixture of descendants
of Norse and Celts.
Religions: Evangelical Lutheran 93%, other
Protestant and Roman Catholic, (1997)
Government type: Constitutional republic
Legal system: Civil law system based on Danish
law; has not accepted compulsory ICJ jurisdiction
Economic overview: Iceland's Scandinavian-type
economy is basically capitalistic, yet with an extensive
welfare system, low unemployment, and remarkably even
distribution of income. In the absence of other natural
resources (except for abundant hydrothermal and geothermal
power), the economy depends heavily on the fishing
industry, providing 70% of export earnings and employing
12% of the work force. The economy remains sensitive
to declining fish stocks as well as to drops in world
prices for its main exports: fish and fish products,
aluminum, and ferrosilicon. The center-right government
plans to continue its policies of reducing the budget
and current account deficits, limiting foreign borrowing,
containing inflation, revising agricultural and fishing
policies, diversifying the economy, and privatizing
state-owned industries. 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 has been remarkably
steady over the past five years at 4%-5%.
Communication/Telephone system: Adequate service
Places of interest: Iceland's popularity is
due to its natural features, which include glaciers,
hot springs, geysers, active volcanoes, portentous
peaks and vast lava deserts. Apart from an expansive
landscape, it also has a rich history, literature
and folklore tradition.