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Iceland

Iceland

Basic

People

  • Population: 329,040 (As of January 1, 2015)
  • Capital: Reykjavík (Population 121,780 as of January 1, 2015)
  • Language: Icelandic; belongs to the Nordic group of Germanic languages
  • Main religion: Evangelical Lutheran (75,1%)
  • Life expectancy: Females 84 years, males 82 years

Governmental system

  • Government: Constitutional republic
  • Suffrage: Universal, over 18 years of age; proportional representation
  • Legislature: Althing with 63 members
  • Election term: Four years.

Economy

  • Monetary unit: Crown (Króna, ISK as currency code)
  • Gross domestic product: EUR 11 billion in 2013 (ISK 1,786.2 billion, USD 14.6 billion) in 2013
  • International trade: Exports of goods and services 58% and imports of goods and services 50% of GDP in 2013
  • Per capita GDP: EUR 34 thousand in 2013 (ISK 5.5 million, USD 40 thousand in terms of PPP)

Geography

  • Geographic size: 103,000 square km (39,768 square miles)
  • Highest point: 2,110 m (6,923 ft)
  • Exclusive economic zone: 200 nautical miles (758,000 square km / 292,680 square miles)
  • Climate: Cool temperate oceanic; highly changeable, influenced by the warm Gulf Stream and Arctic currents 

Geography

Located in the North Atlantic between Norway, Scotland and Greenland, Iceland is Europe‘s second-largest island and the third largest in the Atlantic Ocean. With a land area of some 103 thousand square kilometres and a coastline of 4,970 kilometres, Iceland has a 200 nautical mile exclusive economic zone (EEZ) covering roughly 758 thousand square kilometres.  

Iceland enjoys a warmer climate than its northerly location might indicate, benefitting from the effects the Gulf Stream flowing along the southern and western coasts of the country. The capital of Reykjavík has an average temperature of almost 13 °C in July and around 2 °C in January.

Volcanic origin

Mostly mountainous and of volcanic origin, Iceland‘s highest peak reaches 2,110 metres. The coasts are rocky and of irregular outline, with numerous fjords and inlets, except for the south which is dominated by a sandy coastline and few natural harbours. Lowlands stretch from the coast towards the interior, most notably in the south and the west covering a large proportion of arable land, considered around 20% of the island‘s size. Several glaciers, one of them the largest in Europe, are distinguishable features of the landscape.

Iceland is endowed with natural resources in abundance. These include the fishing grounds as well as hydroelectric and geothermal energy resources.

Society

Iceland is a modern welfare state that guarantees access for its citizens to universal healthcare, education and an extensive social security system. Spending on health, education, social security, welfare, and other social affairs amounted to just over a 31.3% of GDP in 2012.

Life expectancy is among the highest in the world, 82 years for males and 84 for females while infant mortality rates are among the lowest in the world at 0.9 per 1000 live births in 2013. Despite high life expectancy, the ratio of the total population aged over 65 to the population of working age is 19%, one of the lowest within the OECD.

People and origin

Iceland was settled in the ninth century, primarily by settlers of Norse origin with a smaller Celtic element. A general legislative and judicial assembly, the Althing, was established in 930, and a uniform code of laws for the country was established at the same time.

In 1262, Iceland entered into a union with the Norwegian monarchy. When the Danish and Norwegian monarchies were united in 1380, Iceland came under Danish rule, which lasted for more than five hundred years.

Iceland was granted a new constitution in 1874 and obtained home rule in 1904. With the Act of Union in 1918, Iceland became a sovereign state in a monarchical union with Denmark. In 1944, Iceland terminated this union with Denmark and founded a Republic. The native language, Icelandic, belongs to the Nordic group of the Germanic languages.

With only 3 inhabitants per square kilometre, Iceland is one of the least densely populated countries in Europe. As of January 1 2015, the population of Iceland was 329,040. Around 64% of the population live in the capital of Reykjavík and its surrounding municipalities. The largest town outside the capital area is Akureyri, located in North Iceland, with a population of 18,200.

Healthcare and education

Healthcare in Iceland is based on a tax-financed universal system for all individuals with a registered residence in Iceland for more than 6 months.  Healthcare services are provided mainly free of charge, although user charges have recently been on the rise. Adult dental health care, however, is paid in full by patients, whereas services for children under the age of 18 are refunded to a large extent.

Standard of education is relatively high. Public education is compulsory from the age of 6 to 16. Good command of English and the Scandinavian languages is widespread. Education is offered free of charge or at a nominal fee at three levels.

Followed by the compulsory primary level, there are three or four years of education on an upper secondary level. A higher education is offered at several universities. In 2013, 35% of the employed labour force held a university degree, up from 24% in 2000. Roughly 20% of university degrees held by Icelanders are obtained abroad.

As in most OECD countries, university enrolment of those completing secondary education has increased substantially in Iceland in recent years. In 2004, the rate was around 79%, which is the third highest among the OECD countries. By comparison, the enrolment rate among the OECD countries was 53% on average. The ratio of pre-school enrolment is also one of the highest among OECD countries.

Political structure and external relations

The present constitution was adopted on June 17, 1944, when the Republic was established. Iceland has a parliamentary system of government. Legislative power is vested in the parliament (Althingi) and executive power in a cabinet headed by the Prime Minister. The government must be supported by a majority of parliament in order to remain in power.

The 63 members of the Althingi are elected from six constituencies on the basis of proportional representation, for a term of four years. Over the past 30 years, women's participation in politics has increased significantly and their share of seats in Parliament has increased from 15% to roughly 40%. A parliamentary bill becomes law when it is passed by the Althingi and signed by the President. The President is the head of state and is elected for a term of four years by a direct vote of the electorate.

Iceland has a tradition of political stability. Since Iceland gained autonomy from Denmark in 1918, its governments have normally been formed by a coalition of two or more political parties that have held a majority in parliament. The current governement is a coalition between the Independence Party and the Progressive Party.

External relations

Iceland has participated actively in international cooperation. Iceland belongs to a group of Nordic countries that includes Denmark, Sweden, Norway and Finland, as well as Greenland and the Faroe Islands. The Nordic countries have established wide-ranging cooperation in a variety of fields, including economic affairs and international representation, in which the Baltic States have increasingly been taking an active part. Iceland is a member of the Nordic Council and specialised institutions such as the Nordic Investment Bank.

Iceland became a member of the United Nations in 1946 and is an active participant in most of its affiliated agencies. Iceland is a founding member of the Bretton Woods institutions that were established in 1945, the International Monetary Fund (IMF), and the International Bank for Reconstruction and Development (World Bank). Iceland is one of the original members of the Organisation for Economic Cooperation and Development (OECD) and of the European Bank for Reconstruction and Development (EBRD). It joined the Council of Europe in 1950 and has participated in the Organisation for Security and Cooperation in Europe since it was initiated in 1975.

International trade agreements

In 1964, Iceland became a party to the General Agreement on Tariffs and Trade (GATT), the predecessor to the World Trade Organisation (WTO). Iceland joined the European Free Trade Association (EFTA) in 1970 and entered into a free-trade agreement with the European Economic Community in 1972. In May 1992, the member states of EFTA and the European Union signed an agreement to establish a zone for the free movement of goods, services, capital and persons, the European Economic Area (EEA), which took effect on January 1, 1994. Furthermore, Iceland has enacted bilateral Free Trade Agreements with China, Greenland, and the Faeroe Islands.

Iceland is a founding member of the North Atlantic Treaty Organisation (NATO), established in 1949. The U.S. maintained a permanent military presence at a base in Iceland from 1951 until 2006. However, the bilateral defence agreement between Iceland and the United States remains valid.

Transportation and communications

The domestic transportation network consists of roads and air transportation. The road system totals 13,000 km, of which some 5,400 km of which are primary (paved) roads.. Private motor vehicle ownership is widespread, second only to the U.S.  with 745 passenger cars per every 1,000 inhabitants. A weekly ferry connection for passengers, private vehicles, and cargo operates between East Iceland and two Nordic countries.

The air traffic infrastructure in Iceland covers all parts of the island. Four international airfields are operated. Three major international AOC (aircraft operating certificate) holders operate in Iceland, offering passenger service, international cargo service, and charter operation. Direct flights are on offer to an average of 75-80  cites in Europe and the U.S. during the summertime but corresponding numbers are somewhat less during the winter. 

Iceland's two main shipping lines operate scheduled services to major cargo ports in Europe and on the east coast of the U.S. Both operate transport networks on land and sea in Iceland, Europe, and North America while also offering freight forwarding around the world.

Technology and communications

The technological sector of the services industry, the software industry in particular, has diversified and grown significantly in recent yearsyears. Companies of various sizes are active players in the software sector, specialising in medical, ICT, computer games, logistics, and operating management systems. Most are engaged in export activities, owing to the small size of the home market.

Expertise in renewable energy development is growing source of exports with a number of Icelandic companies providing geothermal and hydropower consultancy to areas within the U.S., China, Germany, Central America, and Southeast Asia.

Iceland's telecommunications infrastructure is extensive and reaches all parts of the country, with fibre optic cables and broadband networks. An extensive mobile phone system has a widespread geographical coverage, reaching nearly 100% of the population. International connections are based on satellite earth stations and three intercontinental cables enabling and facilitating efficient high-speed international connections.

As of 2013, 96% of Icelandic households were Internet-connected, the highest percentage in Europe, compared with 79% in other European countries (EU27) and 92% in the other Nordic countries. Almost all internet connections are high-speed.