Foreign Investment In Iceland Greatly Overestimated - The Reykjavik Grapevine

Foreign Investment In Iceland Greatly Overestimated

Published April 12, 2011

In a recent interview with Bloomberg, Icelandic president Ólafur Ragnar Grímsson told reporters that an aluminium giant was prepared to invest billions in the country. This has proven to be incorrect.
Speaking by phone, the president was asked about how investor confidence will be effected by the Icesave referendum vote, in particular with regards to Moody’s promise to downgrade Iceland’s status to Junk in the event of a No vote.
The president said that Rio Tinto Alcan was prepared to invest “five hundred billion dollars” in building up projects in Iceland. This extraordinarily high figure has naturally caused observers to wonder about the veracity of the claim.
As it turns out, the president was off by a few decimal places. The Globe and Mail reports that the company is looking to invest some $487 million USD in the building of a smelter in Iceland. Furthermore, this is actually a $140 million add-on made last Friday, to an investment that had already been made long before the Icesave referendum.
Although this was likely the president unintentionally misspeaking, as the words for “million” and “billion” in Icelandic are similar (“milljón” and “milljarð”), it is still unclear why a pre-existing investment was used an example of current investor confidence in the country.

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