Iceland, Economy, Happiness and Statistics

Iceland Cover

My first trip to Iceland was in 2007 when the country appeared to be riding the crest of an economic  wave, top of the United Nations index on human development and according to a study at Leicester University the fourth happiest place to live in the world.

Iceland had one of the richest economies in Europe, but it had a problem nagging away below the surface of the wave because its three main private sector banks had become so large that their assets amounted to more than ten times the gross domestic product of the country and eventually things went spectacularly wrong.

The economy bombed, the krona has lost more than half its value.  GDP dropped by 10% (I am not an economist but apparently that is quite a lot) in under a year and unemployment hit a forty year high.  Following negotiations with the International Monetary Fund a massive rescue package of $4.6bn was agreed by a combination of loans and currency swaps from Norway, Sweden, Finland and Denmark.  In addition, Poland offered to lend $200m and the little Faroe Islands offered 300m Danish kroner, which was roughly the equivalent of the United Kingdom lending 300 billion Danish krona or 35 billion pounds!  How generous was that.

Six years previously I had found the country horrendously expensive but that turned out to be a bit of bad timing  because immediately after the crash and only a year later the krona lost fifty percent of its value against the Euro.  Even taking into account six years of relatively high inflation, which even now remains stubbornly high at over 5%,  I was rather hoping for cheaper prices this time because it has now dropped to only the nineteenth most expensive country in the World to live in.

1000 krona

You would think that this would make people happy but evidently not because from fourth happiest in 2007 it has plummeted to eighty-eighth in 2013 and from the top of the human development index it has dropped to only fourteenth but remains in a top twenty which interestingly includes all of the other Scandinavian countries, Norway, Sweden, Denmark and Finland.

On the positive side and despite losing its happiness crown in 2013 the World Economic Forum named Iceland as the World’s most visitor friendly country just ahead of New Zealand and Morocco (Morocco?) .  The least friendly country by-the-way was declared to be Bolivia followed by Venezuela and then Russia.  Well, in my personal experience (and that is all that  it is) I certainly wouldn’t put Morocco in the top three and I certainly wouldn’t place Russia  in the bottom three either.

Other facts that might make Icelanders sad is that it is the only northern European country not to win the Eurovision Song Contest  despite competing in twenty-six competitions and it has never qualified for the football World Cup finals or the European Championship finals.  On the other hand it does now have three blue flag beaches  and four blue flag marinas.

The weather was a bit of a surprise because we had interpreted ‘Ice land’ rather literally and were expecting sub zero temperatures, snow and lots of ice.   What we hadn’t taken fully into consideration was the effect of the gulf-stream that delivers warm water from the Caribbean directly to the south of the country and thereby keeps the temperature unexpectedly mild.

Reykjavik is on a line of latitude 64° north which is approximately the same as Anchorage in Alaska and Arkhangelsk in Russia but whilst the average October temperature in these two cities is about -10° centigrade in Iceland it is generally a degree or two above zero.  Whilst you wouldn’t step out on the streets in Anchorage or Arkhangelsk without a warm coat, woolly mittens and a flask of hot soup it really wasn’t absolutely necessary here.   Iceland it seems is a most inappropriately named country.

Iceland Landscape

When we arrived it was dreary and overcast but to be fair there was now some weather improvement and although there were still impenetrable steel grey clouds it had at least stopped raining.  It was only a short walk to the seafront and we found our way to the promenade and walked along to the Sólfar Suncraft, which is a stainless steel 1986 sculpture of a Viking long boat that occupies an impressive spot overlooking the bay and Mount Esja on the other side. 

Iceland is proud of its Viking heritage because the country was first colonised by Norwegians in the ninth century and the story goes that the first permanent settler was a man called Ingólfur Arnarson who landed here in 871 and named the location Reykjavik, which means smoky bay, on account of the comforting plumes of hot steam that were escaping from the nearby hot springs.

By early afternoon there were some promising pools of blue sky spilling through the clouds as we walked back from the sea and into the city centre and along the main shopping street of Laugavegur.  We were ready for a break so we stopped at a small café that we recognised from the previous visit and where on that occasion a coffee and a sandwich and a cake came to a very unreasonable 1,600 krona, or about £13 but this time it was way cheaper for four of us at about only £8 and I began to feel more comfortable about Icelandic prices.

Sólfar suncraft Reykjavik Iceland

10 responses to “Iceland, Economy, Happiness and Statistics

  1. Good morning Andrew.
    One of the great delights about reading your blog is the fact you slip in little sentences like this, often just as you are about to close:
    ‘… but this time it was way cheaper for four of us…’
    Eh? FOUR? Where did “four” come from?
    You have a habit of doing this. If it was not for the fact that I personally know you to be the most courteous of individuals, I would suggest that you are showing discourtesy to your travelling companions by NOT introducing them to us! Ha! (Two of the three, that is: it is a given that Kim would be at your side.)
    One day, I will not be surprised if you say “all forty seven of us”. That will be the day you are leading a coach party, but did not tell us till the fourth day of the trip! (Joke on my part…well, I think it was!)
    Personally, for travel writing purposes, I think that travelling ALONE can not be beaten.
    Why? Well, because with companions, we are always in a bubble. We talk mainly to our friends in that bubble. In a very real way, we could still be at home looking at TV travel films and discussing the relative merits of places in the comfort of our houses. Why have the hassle of vaccinations and customs officers’ controls, when you can send out for some Indian (or Chinese) takeaways, burn some agarbathi, and turn one’s home into a Little India.
    But, travelling on one’s own, one is almost compelled to make conversations with total strangers …if only for one’s own sanity. One is thus forced out of one’s bubble. One now has to dive into the Ocean of the Unknown …and this is where one’s senses get heightened and lasting friendships can be made.
    Whenever I have travelled with companions, I have never made lasting friendships with strangers I have encountered in those countries. When I have travelled alone, I have.
    The reason?
    It ain’t rocket science: when with travelling companions I never felt the urge to try to befriend total strangers. Oh sure, when abroad I would talk to people selling me things in shops, receptionists in the hotel, etc …but the rest of the time I was in a bubble in a foreign field. A bubble that was Forever England.
    Alas nowadays, the wife will not give me permission to travel alone, as I am too infirm since becoming an OAP.
    Will sign off now. Oh, I forgot to say, another fine post from you.
    Oh and one other thing: when you and Kim came to dinner at our house on Boxing Day, I recommended the Virtual Tourist website. Hope you have now checked it out.
    I have found it invaluable down the years in various countries.
    Especially the TIPS section.


    • Thanks Dai
      If you remember my posts from about a year ago when we visited Venice and Padova you will remember Mike and Margaret from the gondola ride.
      I have never really travelled alone but I do remember agonizingly long evenings when I was travelling around England as a regional manager and how lonely they could be. I think I would be fine during the day, moving around and visiting places but I would prefer to have some company for evening meal and the last drink of the day on a hotel balcony.
      I will consult the virtual tourist before flying to Wroclaw, Polish pronunciation: [ˈvrɔt͡swaf] ( listen)


  2. Excellent post. I had not realized Iceland required an economic bail out.


  3. Funny how Iceland give us the immediate idea it is freezing there. I had no idea about the bailout either. What a fall from on high.
    Wonderful post. 🙂 Must check out virtual tourist site.


  4. Great post, Andrew! We had almost made our way to Iceland in October last year but had to replace it with Hawaii at the last minute (a sea change)… something to do with Indian nationals needing a visa.Thus Iceland has been long on my list.
    It was comforting to know that even in December-January, the temperatures were manageable. Looking forward to read more about Iceland.


  5. Pingback: Effects on Denmark: Iceland Statistics Facts and Figures Have Bag Will Travel | Euro Economy

  6. Pingback: Top Ten Tips for Iceland | Have Bag, Will Travel

  7. Pingback: Warsaw, Research and Travel | Have Bag, Will Travel

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.