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Fallout: The Financial Crisis

Icelanders fish for ways to earn a living

Stephen Beard Mar 27, 2009
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Fallout: The Financial Crisis

Icelanders fish for ways to earn a living

Stephen Beard Mar 27, 2009
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KAI RYSSDAL: Last week the people of Iceland got the first good bit of economic news they’ve had in months. Interest rates went down from 18 to 17 percent. Clearly, the country is still in deep and serious trouble. Iceland’s biggest banks went spectacularly bust last October. Today, the real estate market is frozen, car sales are down 80 percent, unemployment is close to record highs. So Icelanders are casting around for new ways to earn a living.

From Reykjavic, Stephen Beard reports.


Stephen Beard: After the glamour of high finance, this may sound like a bit of a letdown. Iceland’s newest business — a shop selling second-hand clothes for young kids. It’s the first of its kind in this country, a clear sign of tough times. Orri Blondall and his wife came up with the idea as a way of making ends meet.

Orri Blondall: At difficult times people have to think what to do. And this is exactly what we thought of. This is what we thought of.

Business is brisk, but second-hand clothes are not going to save the nation. Iceland’s natural resources might. As the economy contracts, many people are thinking about fish as a way out of the crisis. Stefan Alfsson is a currency trader who lost his job in the crash. He says you see images of fish every time you handle the country’s coins.

Stefan Alfsson: Look at our poor currency. I mean, if you look it — the coins — what do you see? All pictures of fish on it. I mean it’s so deep in the culture and the definition of who we are as a nation.

Stefan was a fisherman. At 23 he was Iceland’s youngest skipper. Then he left to take a business degree and eventually became a currency trader. Now his financial career is over, Stefan is thinking of going back to sea.

Alfsson: We have one of the best fishing grounds in the world. We always come back to this. I mean, it is what we know best. Probably it is at least in part what will get us out of this crisis.

Fishing still accounts for 70 percent of export earnings and 10 percent of GDP. But it’s difficult to see how this industry could expand without damaging the country’s carefully conserved fish stocks. Iceland could fall back on its other great natural resource: low-cost, non polluting energy.

Power plant worker: Here we have our geothermal turbines.

This power plant — on a volcanic ridge not far from Reykjavic — processes hot water and steam piped up from deep within the earth’s crust. Along with hydropower from its glaciers, as well, Iceland can generate vast amounts of cheap ,green electricity. Already it drives virtually everything in the country except transport. If all vehicles can be converted to run on electric or hydrogen power, Iceland could become a model for the 21st century — the world’s first fossil-fuel free country. Jon Born Skulason of Icelandic New Energy:

Jon Born Skulason: We can be self-sufficient with energy. We don’t have to spend a lot of valuable foreign currency to import fossil fuels. And if we can electrify the economy, of course that will have a big impact on the economic life of Iceland. And that’s the beautiful future.

A future that’s probably at least ten years away. In the meantime, given the grim reality of the present, anything’s worth a shot. Like this computer game:

“Eve On Line”: This is live footage of the rebels Borg and Solitude where imperial navy warships.

“Eve On Line” is a multiple player game developed in Iceland. It’s growing fast. More than a quarter of a million people worldwide are now taking part. It was created here by programmers who lost their jobs in the dot-com crash. A sign perhaps that Icelanders can and do bounce back.

In Reykjavic, this is Stephen Beard for Marketplace.

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