The Caribbean can learn from Iceland

By David Jessop

It is hard to imagine nations less like one another than the islands of the Caribbean and Iceland. Despite this the government in Reykjavik recently made clear that it shares many of the region’s concerns and wishes to develop a stronger relationship with the Caribbean.

Late last month Iceland’s Minister of Foreign Affairs, Mrs Ingibjörg Sólrún Gísladóttir, told participants at a conference in Barbados that her small sub-Arctic northern nation of 0.3 million people had much in common with the Caribbean.

Climate apart, she said, Iceland as a small island state shares many features with the Caribbean. These include small population, limited resources, remoteness, susceptibility to natural disasters, a disproportionate dependence on international trade and high communications and transport costs.

Smallness was, she said, often a state of mind. “The right combination of confidence, conviction and realism yields the best results.”

Coincidentally the visit occurred as Iceland was starting a battle internationally aimed at protecting its economy from financial predators threatening to undermine its economic integrity.

In March Iceland began an international investigation into a speculative attack by hedge funds on its currency, banking system and stock market. Newspaper reports suggest that a small group of hedge funds managers and a major US investment bank on a visit to Iceland in January decided, because of weaknesses in Iceland’s banking and currency system, that they would in effect bet against the collapse of the nation’s banks and its economy, allegedly using rumours spread in third countries aimed at causing a run on the nations’ financial system.

In response Iceland came out fighting and is now undertaking a global investigation aimed at trying to bring charges against those involved in the alleged conspiracy.

At the Barbados conference, Caribbean participants were told about Reykjavik’s Island Growth Initiative that was established earlier this year to manage development cooperation with small island developing states.

During the three days of meetings in Barbados much of the discussion focused on practical co-operation under this programme in areas of shared concern. By the time the Icelandic team from government, the public sector and business returned to the cold, three main areas of co-operation had been identified: mobilising technical and financial resources to address climate change; encouraging investment in renewable energy including the geothermal sector; and the sharing of experience on sustainable fisheries. The discussions also considered the possibility of agreements on double taxation, investment, transportation and social issues.