Economic Overview
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 6% 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. substantial foreign investment in the aluminum and hydropower sectors has boosted economic growth which, nevertheless, has been volatile and characterized by recurrent imbalances. 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. the 2006 closure of the us military base at keflavik had very little impact on the national economy; iceland's low unemployment rate aided former base employees in finding alternate employment.
Environmental Issues
Water pollution from fertilizer runoff; inadequate wastewater treatment
Government Type
Constitutional republic
Population
304,367 (july 2008 est.)
Location
Northern europe, island between the greenland sea and the north atlantic ocean, northwest of the uk
Area
Total: 103,000 sq km
land: 100,250 sq km
water: 2,750 sq km
Slightly smaller than kentucky
Country Aliases
Conventional long form: republic of iceland
conventional short form: iceland
local long form: lydveldid island
local short form: island
Capital
Name: reykjavik
geographic coordinates: 64 09 n, 21 57 w
time difference: utc (5 hours ahead of washington, dc during standard time)
International Disputes
Iceland, the uk, and ireland dispute denmark's claim that the faroe islands' continental shelf extends beyond 200 nm
Sources: Central Intelligence Agency (CIA)
