Iceland: Vulnerability in a Fish-based Economy

Abstract

Fish — Iceland's main export product — accounts for three quarters of its exports. Although only a small proportion of the population is employed in fishing and fish processing, the economy is highly vulnerable to any fluctuations in the earnings from fish exports. This article discusses the Icelandic responses to vulnerability: an inwardly orientated emphasis on rapid adaptation to change, and an outwardly orientated qualified support for liberal trade policies. Also discussed is the possible impact of some of the changes in the foreign economic relations of the country in recent years, and the question of Iceland's relationship with the process of European integration.