Iceland Analysis

G110: ASSIGNMENT #3 ICELAND ANALYSIS INTRODUCTION A description of the economic development of Iceland through an investigation and examination of key economic sectors of the economy as well as leading economic indicators; with an interpretation based on an objective, comparative analysis of similar data from Ireland, Lithuania, the United States, and the world at large. Like many Scandinavian counties, Iceland has a “mixed” or “social-market” economy combining “free-market” style capitalism with a broad and extensively funded social welfare system. PART 1: ECONOMIC GEOGRAPHY ANALYSIS

ICELAND: GROSS DOMESTIC PRODUCT COMPARISON AND GROSS DOMESTIC PRODUCT COMPOSITION PER PERCENTAGE OF LABOR FORCE BY ECONOMIC SECTOR

Year Amount (billion) Currency

2000 2007

Economic Sector (2008)

08.7 19.96

% of GDP

U.S. dollars U.S. dollars

% Labor Force

Agriculture Industry Services

05% 25.2%

69.8%

03% 19%

78%

Even a cursory review of the above economic sector table reveals that the service sector is by far the most prevalent in Iceland’s economy, with combined industry (including exported goods) being a distance second. Historically, the health of the wider Icelandic economy has been tied to the profits of the commercial fishing industry. Unfortunately, the commercial activities of fishing, fish processing, and fish marketing have always been vulnerable to market instability which is especially undesirable in a highly planned economy. For example, the price of cod has gone down up to 40% in some markets over the past year, and “up to half the herring catch may be infected with a parasite,” says Hans Hedrick, an Icelandic fisherman. Hedrick went on to say “there has been some debate as to whether the affected herring may be unsuitable for human consumption. The parasite often kills herring and is a

periodic natural visitor to Icelandic waters.” In addition, “recent figures state that nearly 90% of Europe's species are being pulled out of the water at...