Published January 12, 2007

In the year that passed, these news stories stood out above others.

Heavy Industry to Increase Despite Growing Opposition

The government’s plans for continued heavy industrialization drew criticism from the financial sector. Early in the year, Ágúst Guðmundsson, CEO of Bakkavör Group, said in a speech at the Icelandic Business Forum that the government’s plans for continued investment in aluminum smelters and power industry was crippling other industries. He claimed that the continued development was putting a lot of pressure on the economical system, causing the exchange rate of the Icelandic Króna to go up steadily, causing other export industries to lose money. Guðmundsson also claimed that the required rate of return from the investment in heavy industry was too low. If the same investment had been made in dynamic start-up companies, the return would have been much higher than could be expected from heavy industry. Around the same time, analysts from KB Bank issued a report stating that the government’s position on heavy industry was the main factor pushing up the exchange rate, leading to losses in other export sectors.

According to a February Gallup poll, most Icelanders felt that the government should not focus on trying to build an aluminum smelter in Iceland within the next five years. Over 60%, of the eight-hundred people who responded, were against the building of another aluminum plant – as has been proposed for the north of Iceland – while only 29.6% favoured the idea. While more women than men were against the construction of more heavy industry within the next five years, respondents from all age groups – from 16 to 75 years of age – showed a large majority against recent development proposals.

In May, government officials signed a declaration of intent to explore the possibility of building an aluminum smelter in Húsavík, while Alcan is hoping to more than double the production capabilities of the Straumsvík Aluminum smelter. Meanwhile, Andri Snær Magnason’s book against heavy industry, The Dreamland, became a best seller, and protesters gathered at an international protester’s camp near Kárahnjúkar.

In September, the by-pass tunnel for the Kárahnjúkar Dam was closed, effectively starting the build up of the Hálsalón Lagoon, which will provide the hydroelectric dam with consistent water pressure. Near the end of September, fifteen thousand people marched in support of retiring television reporter and nature enthusiast Ómar Ragnarsson and his call to the Icelandic government to forego with the Kárahnjúkar dam. Ragnarsson called for Icelanders to protest, stating that when an unjust execution is about to go forth one should continue disputing it until the last day. Protest walks took place on Laugavegur in Reykjavík, in Akureyri, Egilsstaðir and Ísafjörður. In a conversation with the Grapevine right before the march, Ísafjörður organizer and scholar Ólína Þorvarðardóttir reflected public opinion to the latest developments in the dam spectacle. “It was foremost Ómar’s call that sparked our interest in marching here in Ísafjörður. He has been very diligent in calling attention to the impending harm to nature and the environment and people are finally starting to realise that it is not too late to do something about it. This is why we will answer his call and march, expressing our sorrow over what is happening.” When asked about the effects the Kárahnjúkar endeavour had on the people of Ísafjörður Ólína replied that the scope and effect of the projects is far greater than anyone envisioned. “In environmental and economical terms, the effects are alarming. Here in the West Fjords, we have experienced drawbacks due to the inflation caused by the dam, where greatly needed projects such as improving our dismal road system have been postponed to accommodate it. On another note, the country belongs to all of us; Easterners do not ‘possess’ the Eastern highlands any more than we possess the West Fjords peninsula. This is our heritage and we have an obligation to pass it on to future generations.”

U.S. Defense Forces Leave Keflavík Air Base; Nationwide Scare of Rampant Motorcycle Gangs

In March, word spread that the United States military base in Keflavík was going to be closed, with all aircrafts leaving permanently by September. The majority of personnel stationed were to leave, and relatively new radar installations would be closed. Up to 500 Icelanders would loose their job.

Since 1951, Iceland has had a bi-lateral defense agreement with the USA, for the nation’s defenses. The decision to close the base was made uni-laterally by U.S government officials. Although the decision had been apparent for quite some time, the decision caught much of the nation by surprise – including the government and media.
Steingrímur J. Sigfússon, Left-Green MP and long-time critic of the U.S. military’s presence in Iceland, told the Grapevine that this was a historic day. “The dream has certainly been realized, but of course it would have been better if our leaders had shown a little forward thinking and taken the initiative themselves. The way this came about was rude, and ultimately humiliating for the government and those parties that have for over five decades supported foreign occupation of Iceland. When our nation was signed up for the coalition of the willing to invade Iraq, against its will, we were told we had to support our closest allies. Yet this is how they treat their so-called friends, it’s a real slap in the face for the government.”

Mr. Sigfússon further commented that Iceland’s need for armed forces was practically non-existent, and that civilian institutions such as the police and coastguard should be organized in order to provide the needed protection – in the unlikely event of a major disturbance. ”I mean, who is going to bomb us? Who is going to invade us? We are not talking about being defenseless. If, for example, a crazed motorcycle gang came here and ran amok, we need to have an organized force that can deal with that. What we don’t need is an air force and a base full of soldiers,” said Sigfússon. “A long and humiliating chapter in our history is over, we’re not a feeble nation and we can and should take responsibility for our own security.”

In May, Social Democratic MP Össur Skarphéðinsson, accused the ruling coalition of “hiding from the parliament and the people” the fact that the NATO base was going to leave. Pointing to an article by Valur Ingimundarson for the Icelandic Literary Society, Skarphéðinsson pointed out that US authorities had told the Icelandic government in December 2002 that they intended to leave the country. This announcement was repeated formally about a week before parliamentary elections in 2003, when the US ambassador met with Icelandic government officials.

On September 30, the American flag was lowered at the now former US military base at Keflavík. After a small ceremony, the Icelandic flag was raised alone and the closure of the base and the withdrawal of the Navy’s presence in Iceland became official.

Many locals celebrated the turning point by throwing their own little farewell parties and a large group cheered the Navy’s departure at a meeting held at Nasa the following day. “I’m still celebrating,” Stefán Pálsson, spokesperson for The Campaign Against Military Bases told the Grapevine. Pálsson and a bus full of anti-war protestors went on a guided trip to Reykjanes to explore the area now desolated, but the area is closed for public traffic. “It was all very informative and very unreal to walk around such a ghost village and think about all the waist that strings along such military bases. To think about all the money spent in constructing the buildings, which now are empty. Money, which could have been used for something very different.”

U.S have stated that the defense agreement will be honored, although Iceland’s air defenses will be orchestrated from other NATO bases in Europe. The Icelandic government has explored other options in cooperation with Norway and Denmark. What will become of the air base left behind in Reykjanes remains uncertain.

Whaling Resumes; World Not Amused

In October, the Icelandic government lifted the ban on commercial whaling. The whaler Hvalur 9 was promptly prepared for its first journey in seventeen years. In accordance with the International Whaling Commission’s moratorium, Iceland gave up commercial whaling in 1986, although scientific whaling was practiced up until 1989. In 2003, Icelanders returned to whaling for scientific purposes, when a program designed to research the effect of minke whale on commercial fish stock was launched. A press release from the Ministry of Fisheries states that the quota would be nine fin whales and 30 minke whales during the 2006-2007 Icelandic fishing year, in addition to 39 minke whales that will be caught as part of the scientific whaling plan, started in 2003.
“The position of Iceland has always been that whale stocks should be utilised in a sustainable manner like any other living marine resource,” stated a press release on the Ministry for Fisheries website. “Icelandic policy on ocean issues is based on maintaining the future health, biodiversity and sustainability of the ocean surrounding Iceland, in order that it may continue to be a resource that supports and promotes the nation’s wellbeing. This involves conservation and management of the resources based on scientific knowledge and guided by respect for the marine ecosystem as a whole.” The Ministry stated that Iceland had the legal right to resume sustainable whaling and that whale products would likely be consumed both in Iceland as well as internationally. British authorities questioned Iceland’s decision.

In an interview with the Grapevine at the time, Magnús Þór Hafsteinsson, Liberal Party MP, stated, “I think we Icelanders should start whaling again, but we have to be sure there is a market for the products.” According to a Gallup poll conducted in Iceland in June and July last year, very few Icelanders eat whale meet on regular basis and the market is very limited both locally, as well as globally. Only 1.1% of Icelanders eat whale meat once a week or more, while 82.4% of 16 to 24-year olds never eat whale meat. An international moratorium on commercial trading of whale meat is still in effect.

Icelandic tourist companies, especially in whale-watching industry feared backlash from travellers. A December Gallup poll confirmed that nearly half of Icelanders agreed that commercial whaling would harm Iceland’s tourist industry.