Excellent article on how Iceland became the first country to fallvictim to the global economic crisis. The example of Iceland is awarning to other countries that engaged in lax financial practices andcontrols. It also shows how destructive the global economic crisis isto ordinary people.
In the depth of winter, the sun shines about four hours a day here.But thousands of Icelanders – more than 1 percent of the entire country– have sacrificed much of their precious few hours of daylight inrecent weeks to protest the financial darkness that now shrouds theirisland.
From dapper senior citizens to masked anarchists, an eclectic groupgathers every Saturday to demand the resignation of their government.On Tuesday and Wednesday, they clashed with police in increasingly violent demonstrations that suspended Parliament.
They’re furious over Iceland’s recent plunge from the world’s fourthrichest nation – and the best in the world to live in, according to theUnited Nations – to global financial crisis roadkill. Its banks areruined, the currency devastated, and one of the country’s closestallies recently named it a terrorist state.
“This has been very hard for the nation,” says protester RosaEyvindardottir, eight months pregnant and carrying a red socialist flagin her hand during a recent Saturday protest. “Maybe this is a lessonthat we need to wake up and see what’s been right and wrong with ourminds.”
Harbinger of trouble?
As the world holds its collective breath, worried that a globalrecession will become another Great Depression, Iceland is being seenas the canary in the coal mine, an early warning system that mightindicate what other countries could face. With the dust beginning tosettle from the banking system’s collapse, Icelanders are taking stockof the mistakes.
“The banks were expanding too fast, they were taking excessiverisks, and the government didn’t do what had to be done to keep them incheck,” says Gunnar Haraldsson, director of the University of Iceland’sInstitute of Economic Studies.
Iceland’s banks were relatively new players on the internationalstage. Indeed, they were based in a remote, sub-Arctic country that hadspent much of its history in a state of grinding poverty. Constrainedby a short growing season, battered by storms and volcanic eruptions,Icelanders were one of the poorest peoples in Europe when they achievedindependence from Denmark in 1944. Their national dishes – singedpuffin, putrefied shark carcass, charred lamb’s head – reflect pastnecessity to avoid starvation.
After World War II, Icelanders harnessed the fish in the frigid seaand the lava-heated steam beneath their feet, investing the proceeds ininfrastructure, education, and healthcare. By 2000, it was a societynearly devoid of poverty, where almost everyone is fluent in a foreignlanguage, where homes and even the capital’s streets are heated withgeothermal heat. Health care and education are virtually cost-free.