NATIONAL INTELLIGENCE SURVEY 68; ICELAND; THE ECONOMY

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• Collection: NIS
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NATIONAL INTELLIGENCE SURVEY PUBLICATIONS
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1
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This chapter wev pnper+ed for the NIS by the Cen-
hel Intellkence Agency. Research was substantially
eampltted by December 1972.
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CONTENTS
This chapter supersedes the economic coverage
in the General Survey dated December 1966.
A. Economic appraisal 1
B. Structure of the economy
1. A,riculture, fisheries, and forestry
a. Agriculture
b. Fisheries I
e. Forestry
2. Fuels and power
a. Elect: is power
b. Geothermal heating
3. Minerals and metals
4. Manufacturing
a. Export industries
(1) Fish processing
(2) Aluminum
(3) Diatomite
b. Domestically oriented industries
CONFIDENTIAL
GJ
2
2
4
5
6
6
8
8
8
8
8
9
9
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Page
5. Domestic trade 9
6. Tourism 1,
C. Economic policy and development 10
1. Governmental economic policies
a. Fiscal policy
b. Central government revenues
c. Central government expenditures
d. Wage and price controls
e. Banking system
'0
10
10
11
11
11
2. Devulopment
3. Manimwer
it. Labor force anA employinctit
b. Working conc'itions and wages
D. International ecow -inic relations
1. Foreign trade
2. Foreign trade policy
3. Balance of payments
Glossary
FIGURES
Page
Fig. 1 Stratunsvik aluminum smelter photo) 2
Fig. 2 Eco.iomi%; structures: Iceland, Den-
mark, Norway chart) 3
Fig. 3 Redfish aboard Icelandic trawler
(photo) 4
Fig. 4 Fishcatc:l (table) 5
Fig. 5 Electric power map) 7
ii
Fig. 6 Central government rere�num (tahle
Fig. 7 Central government expenditures
table
Fig. 8 "'age rates, annual earnings, and cost
of living (rhart
Fig. 9 Geographic distribution of foreign
trade (rhart
Fig. 10 Balance of pay meats table
Page
14
14
12
13
13
13
14
15
16
Page
10
11
13
14
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r
1
I�.
4p
�rsr,ae.
t,�ro fa Mi
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Land Utilization
w ��'I
and Economic Activity
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T EC311470ifly
A. Economic appraisal (U /OU)
Iceland. \vhicb has it population of only 09,000
persons, has i t small veonomv that lacks nnnv
important natural resources and depends heavily on
foreign trade to supple its economic� needs and provide
markets for its products. Since the beginning of the
1960's. foreign trade has expanded rapidly and cite
economy bas prospered. Neal CN 1 grey% 1(t an a (-rake
annual ::te of 4.5 front 1961 to 1971. de!�pite it
major recession in 19(j7 -68. In 1971� Icelatd'sC:"P(at
current prices and exc�ttange rates) stood ct l ,591
million. Per capita C\ P about $2830� sonu�vv Il t
above that in Finland fttt lower than in Denmark -:td
Norway. Per capita ownersbip of consumerdurailes is
generall% similar to that in the other countries
mentioned.
Iceland's prosperit% depends large1% upon lb,� fish
catch in the surrounding seas. Fishing and fish
processing engage about one- sev(-nth of lit(- labor force
;111(1. more important, ac'c'ount for about four- fifths of
Iceland foreign exchange receipts. Some progress in
diversifying exports is shown by the fact that in the
early 1960's an even greater share of export earnings
More than nine tenths derived front sales of fish and
fish products.
Tlh development of induAry (other than fish
processing) has been hindered In it snall resource
base, the small domestic market. and efficiency lower
than that of foreign competitors. Most domestic
industry is small scale curd geared to meet local needs.
However, in an effort to broaden Iceland's economic
base and reduce dependent�(- on the volatile fish catch.
the Icelandic Covern nie�nt is encouraging the
establishment of larger export oriented enterprises.
Two ma or Plants have begun operations- an
alurnitttn plant (Figure I and it facility to extract
and process diatomite �a material used in industrial
filters.
Agriculture. bec�attse of the cold dinette and short
grooving season, is small scale and primarily pastoral.
Cattle and sheep raising is the chief agricultural
ac�hvit% Iceland is self sufficient in livestock prodttc�ts.
and some vegetables are grown in gre(-nhoctses heated
by water piped fnrn abundant hot springs. Other
foodstuffs, including all cereals, nust be imported.
Import! eyuivalc�nt it value to nearly one-third of
lit( CNP� supply it large proportion of the goods
consumed in Iceland. Western Europe and the United
States are Iceland's chief suppliers and prinur%
cetstoiners. Trade with the l'. S. S. N. and I.:ast
tiropean countries, relatively large in the 1950 no%%
accounts for only it small portion of Iceland's foreign
t rade.
Most econonic� enterprises are privatv1% owned.
although extensive government ownership and control
exist in scn
u� sectors. \early all fishing, agricultural.
tnanufac�turing� and c�otntnerc�ial enterprise's are
privalel% owned, as are the country's hyo airlines.
Conununications facilities, public utilities, and certain
projects requiring large antoviw of e�apital (such as the
eli;etontit(' Plant and cement plant) are gmernnu�nt
controlled. In addition. the government influences the
ec�ononn through widespread subsidy programs.
During most of the 1960's, the thrust of' monetary
policy %vas re'stric'tive. and the central gov(-ninlent
budget \vas in surplus. \eyertheless. Ic�elan(Fs chronic
inflation persisted, averaging over 1 1 annually. A
price freeze in 1971 briefly checked the inflation. I,ut.
ill] the cessation of the freeze in 1972. prices resumed
their rapid upward clinb.
Economic grovvtb daring 19711 -72 averaged nearly
S'; annually in real tc�rnts. Nxport demand for fish
products should lend to sustain Iceland s grove th i1( the
next fe\v \ears. The fishing industr\�s \%eight in the-
econonty and its inherent instabilih. howe%er.
continue to pose complex problems for growth and
slabilization policies. The size of the fish catch is not
only it factor c'ritic'al to the growth of total output and
the size of exports but also it soiree of inflationvry
%age increases. When boat c�r(-%% earnings rise as the�
resalt of it good catch, wages in related industries such
as fish processing are forced up as workers there
attempt to maintain earnings parity with the boat
c�rvws. In turn, the mechanism ping agricultural
earnings to those of skilled workers further extends the
impact. So long as these institutional arrangeniv0s
remain, gro\%th and stabilization of the eeo,,otm will
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25X1

AplevituM f hft and Nara rr'
Iceland I S
Denmark 9
Norway r7p
Manufacturing and mining'
Iceland
22
Denmark
26
Norway
26
Construction
Iceland Is
Denmark 9
Norway e
�Selected compwmu of GNP N wit"
of origin, in percent of wel GNP.
FIGURE 2. Comparison of economic structures: Iceland,
Denmark, and Norway, 1969 (U CIU)
Agrictilwral production is larizt-l% confined to .111
irregular coastal rim aromml div 0.1 :11141� gent-ralk
i ninbahitah1v interior. (:ompri. ire nearl4 omAmirth
Of lct-lancl total land urea. agricull11ra) Imid in Ihi�
coastal rite is used alinwt vxdii%i%vI% to maintain
li%estvA. :1s %Munn in the followitic tahulalitm.
mCMI(Ms and pastures occnp%inz 22', of the to1_al
land area comprise 4irtuall4 all of Icl.land
agricultimil land:
TnOCSAMA OF
23
IIE(;TA11L%
P ER CEN T
Agricultural land
2, 2!i0
22.1
Arable land and land under per-
F:g11%
1.4111)(1
manent crops
1
0l.�/
Permanent meadows and pastures
2,279
22.1
Of which:
Cultivated meadows
103
1.0
Forested land
3
N(-gl
Built -on area, wasteland, and other
8,017
77.9
Total land area
10,300
100.0
A flouri.!:ing lice.tock 141111 dair.imZ indmim
acc�onnh for nine tenth. Of the tot.11 :alm. of
agricultural prod11ction. Livt-stoc�k herd% consist
princ�ipall% of sheep and cattle. althoua;ll some pis
1`0,11�. I"14t11r4 .11141 llra�, art- rai�t-41 Ilt�Iwt.t-n I!1:111
41141 111TR Iht- 414.4.11 I "0pn1.11ior4 140.4� f40ma IINI.INN1
!11�.141 !40 .IIN1111 NNI INNI I14�.11I whllc Iht- 04N1 of 4�,11114�
to I4tll 1 :1.10 "1 114�.141 140 15.INN1 114�.141
Ht-�I"ndimt to t;41s4�r11rtr4�nt.I 1/101.� "hci and
�;Ih.i41i4.. 4:11114� ramlig .11141 41.1mins, tt-plat,d �hl.t-p
raring .1� Iht� 111.1jot .4r411ct- Of lar1: 014.11114� .141111141
I!Nil 1 o1 11141114111. w4 "01. .11141 �1144'ILki14�
.igildivatilk 4�U1111141. 4111n14�.1i4 4111104 1111111�..11141 thl.�4
p4N1ttc1. 4ti1111i11n4. 140 t.ol :�Iilfill- 114 1.11 till. 1.111,4��1 �14.14
40l .asuicultnral t-INrl� It. Luld p4N {action .41141
4� %INrl� of Im.%l4N�k .11441 flam I441114.1� 411 141;11 ,11t-
�mn11nariil.d 1"�14444 in n14.lric 11111�
I'n414t4 ro% Fatvr,t.
Rmf
23
Mutton and lamb
12, M1
2!1:11
Milk
117.500
0
F:g11%
1.4111)(1
0
X1'4 "11
INN)
3. 4
Shet 1{t..na :11141 11N14Y
2,.51X)
1.225
(.r40p rai�intt 1/1.1%..1 44.t4 �111.111 roll. \141.1 411 I114�
Laid i� un�11il.1614� If it 4.1111i%ali4r11 .11141 It 1-1.11141
14N�alnnl .at hitih lalih:dt- p44 idr 401114 wt-.ak �rltlliudit
.11141 an v%tr4�111e�1% 4141rt crowiliv �e.aN Ila%. call frotm
the cmlli %all.d vaA atml�. i� Iht- priticil -A crop.
14r1141w4.41 114 ("11.1144�� .11141 �111 14 4t-t;t Lthlr� .1� Imr1111..
kaly. car411�. aid ca11h.a>;4� t'1 411 larn t.on�mmpliou.
2W.INNI melrlt' Noll of Ila% amt 1.!NNI inviric ton� 40l
I"ntal4"�% wl.rl. pt4Nhtt�ed i4 14:11 (:411.11�.aw growrl In
�111.111 4ln.11110iv% 4111 .111 I1.1.1� S11111l.
Il mail% t4111mitoti .111 1'11l.11 .iry
vr4wt1 Ili Crr4�IIho11�4'� 014.114 I� %%alcr Iron) tl.lt4tr..l
hill spring� \lo.l s;rel.nhou�l. pnNlucl. i� 111arkl.14-41
commiercia114
Icl.l.11ul ha� u.l.r :011141 fart11 of %Illcll
,4110111 tii arr pn4alt-l. ownctl \1o.t of (hv r( art
church propert4 'I'hv larin�. %%idul4 �vattl.r4�d
I hrmigho it Ili' e11.otal rite. r.11 ve 111 wr from 1:111 tO
1.211101) lit�t�taro Iht- .a%cragu I"'itic al"nll (Ill lit-clarc�
Ll..� 111.111 5 of fill. ivrit�u1141r.il 1.11141 i� c1111i4alvd.
.11111ou,h 1.11141 re-dalllatioll i� Lr.1t1n.1114 i11crt..ri11� 1114�
cniti%aled arvas
\gricullural l.4 r.lti41. 141.14 .1 kl.% roll. ill linking
Ihl. larin �et�lor to th4� re�l of (hl. et�Owmi4 \varl%
4.4er% farm ur I "�Ions;� to one or more of IIll -'r
l.4 "IN�r.4li4es Uvitlr.dl% oruaiiiil.d into thu FiArr ation
of IcvL111Ait� :41oper.alkv lociclic. S'. Iht-
.�iricultnraI cooperaIi4c. purch.t -w. p4Nl..�. .11141
m:arkt-t tilt- o11tpul Of im-ml wr� la rm, .and .e1{
eon%witer gt "111� .and t artll �upplil.. ht Iht-ir invii
\I.un of tilt. t�4 olm- rali%v, vo-ml cil.cli! mid furtlish
information .,t.d at!%it�t� on modertl farming
tt-ehnitlues �I'lle `.IS. Ios:t-tht-r with other Itrl.andic
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I7 1�J�iL�L Jl
r'I,I ,;I'. 1 I111 II I' 'I., II` r ;rl IIIIII, 'Irl
tI'jrlr IIU Ilr'll 'III �\r �I II ,'ill II!t :ll II rll�
II�Itlr Ii .I :t r, II \r rrl I' I .III I' {I rl lI ,I I,
III Il'I.i ,1 �II`I, I.r.. \1,., 1'. I.1�t'I
I Irl'1 !III I i'll' ,I
�AI III II 1'rIl IIII�IIi. II I,, 1r �I, 1'I' IIII,
.I'.'I!1 'tit Ir.11 1' Irrllr I .II r
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1 1'
11 ttII1 I ;IIII Illlu. fI I I I:. I I
�1111;, IIIf1, I� !I.,' .,f
(r. I rl lI
I III �tI!Ii II' 'I.. 1 r I� 1 III f
I \rr 11111 VIII nl; r I.' I' 1i
I II Illf I, ;III t, r1r1 1
tr j!I I' 1 I ,1 I' r rr\ f .'!i .,ir�1, i
.f
A
'II Ir
I, I, ,III I I,1
lrl l'I II I III'
III I lllllllllll III
II Irr Il� I "l III
,I II '11
I 1 111111; III'II I` I \111 11
III
VIII 'rll IIII'
I I ,1111 rI'
111 Ilr I 111,111 I III
:Illllr III it 1 1
r rlr r II I Irlll
111 ri 11' II Ilr Ilr rl ll 111 ll:'
..I rl,r
r I rI III'
Ir II .I
1.11111 Ills'I I 111 I III
"'I !I II'r
�I I.I' I, rl
II.1 II 11
"ill IIII rlr l'! 1 111111 IIr
Il, rn
11, 11111111'
\I I IIII ,I lln
In Il (IIII t 111 nlll"
III r Ii,
I, :11':,11111,
II
IIII 1'I 111 Irr!.11
Illr
rl
r I r1
ll.1 1. 11111
11'.' II,.
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nu 11
rI Ir1,,r r II 1
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1.
I I If rig
;I.11 I 1,,
IUI �I 11,, Illrr
11 I IiIII1L.
I,
I, 1 .1.I1
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Ii II,!I'.
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X11
I
,1 I' r t ,r. 1
1
.l1
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rl, I �'Illlrl
ll',' fl 1,I II,' I I' 1 11� 1
1, IIr 'lIII!I.I I. 111r
,rl,
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11r
!A
f
F Mrs
r
O ft
i
r 1
A 01
1
447 r ,r
FIGURE 3. Redfish aboard an Icelandic trawler. Fish account for 80 of Iceland's export
��arr,n,-., and rndfish is onr� of th.� principal types of fish processed by fre fe inq. lU OU)
s
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other ancillary services. Consetluenti the size of th..
fish catch is a key determinant of the econonl.v s
growth and prosperity.
The annual fish catch, however, has shown large
variability for a decade (Figure -1`. The stain
fluctuatiot in the catch has resulted from the
migration of herring �into the northern reaches of the
North Atlantic during the first half of the 1960's anti
more recently southward to areas beyond the range of
leel.ud's small trawlers. As the table indicates, the
catch lilts fallen off sharply since 1966. lartrely as a
result of the :irastic decline ill herring tonnage.
fntcnsifieu fishing in Icelandic waters by both
native and foreign fleets has raised concerns about
overfishing. In order to protect its grounds, Iceland in
1935 unilaterally extended its territorial limits to 12
miles, and in September 1972, to 0 stiles. While
creating diplomatic problems with other fishing
nations that fish in Icelandic waters, these actions
probabl% contribute to conservation of the stock of fish
around Iceland.
Most fish are sold t the fish- processing industr%.
The major fishing ports have facilities for deep
freezing and salting fish, and for reducing fish to oil
and meal. Reykjavik is tho center of fishing and fish
processing activities. Most of the dentersal catch is
quickfrozen, salted or dried, and then shipped to
domestic or foreign markets. Important byproducts
include cod liver oil �used for ncdicinal purposes and
in manufacturing margarine �and frozen or salte,l
cod roc. Most of the herring catch now is iced for
domestic sale, while the increasingly large capelin
catch is reduced to fish oil and steal. The disposition
Of the fish catch in 1970 was as follows (in percent of
the total is
Frozen
41
Salted
15
Dried
.1
Iced
11
For oil and meal
28
Canned or smoked
Negl
Horne consumption
I
Total 100
FIGURE 4. Fish catch (U /OU)
(Thousands of metric ions)
Cod, oee:ut pereh, haddock. and
other demersal .species.........
11 erri iii
Other ;prineipallY ealw1in.........
Total........................
The capital assets of the fishing iudustr% consist
primarily of some SITU fishing vessels totaling about
80,00 gross roistered tons (g.r.t.), of which nearly
one-third are ee sst�Is of over 11111 g.r.t. 'I'll( size of the
fishing fleet renained static during the 1960's:
however, sub- ntial investments. financed in part b%
low interest g'ts riinn iit loans, pernitted significant
modernization. rinary emphasis has been placed on
larger. bettor eyttipped boats capable of ranging
farther and spending extended tine al sea. lu 1970, for
example. seven of the 3:3 new vessels added to the fleet
%%ere imported ships averaging :370 g.r.t.. all(] the
remainder were smaller domestically built vessels.
Fishermen's iuconnes strongl% influence wage trends
in other sectors of the econonn. Part of a fisberinan's
ea rnings comprises it share of the value of the boats
catch The fish price used in this calculation is
determined each year through negotiation behyeen
the vessel owners and crews on the one hand and the
fish processing plant owners on the other. When the
fish catell is good, fishermen receive higher earnings
that soon engender increased wage demands in the
industrial sector, ino st notably in fist processing. 'I'fie
procedure which guarantees parit\ for agricultural
incomes extends the spread of higher wages and
incomes throughout the econortn.
c. Forestry
Iceland has practically no forests yielding
commercial wood. althougl at one time forests
covered most of the lo\y lit lids. Centuries of oyercutting
and overgrazing have destroyed the forests or reduced
them to brush. except for about :1.000 hectares of scrub
birch.
Experimentation bus convinced Iceland's foresters
that most of the required wood �for which the
countr\ is now wholly dependent on inporis �could
be grown locally. and that shelterbelts would increase
agricultural yields. 'I'll(- forestry service has established
it nunber of experinietital tree ntr'seties. 1 nog%
feature �IO species front various regions arot:nd the
world, and maintains over 1.000 hectares of coniferous
plantations. Efforts to preserve and enlarge the
I!)(it) 1962 1!1171 191i(i 191 is 19711 197
1211 3111 115 339 373 179 371
1911 111) :ill 771 113 50 oil
tts i!/ l rt. i.1 13 130 1a _'1111 212
521) 7911 1172 1,210 099 729 (is t
5
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remnants of the onev widespread birch forests him-
met with covisiderable success. Nv%vrthcless, in yicw of
tic� northern location of the country, it %%ill be some
years In-fore Icelandic forests yield commercial wood.
2. Fuels and power (C)
Iceland has east hydroelectric and geothermal
power resources but no kno%yn deposits of coal.
petroleum, or natural gas. Imports supple all of the
islands fossil -fuel reyuiretnents. Petrolemn products�
importe(I principally from the U.S.S.R.. the Unie�d
Kingdom, and the Netherlands, account for nearly
two- thirds of annual energy consumption. %%ith
hydroelectric� and geothermal power accounting for
most of the remainder. As a result of the steady
conversion of the fishing fleet to diesel power. wall and
coke now account for little more than 1 `'e of annual
energy requirements.
u. Electric poicer
Iceland has all ample supple of c!ectricih to meet
its present needs. I 1971, production was about 1.6
billion kilowatt hours (key. hr. and, at the c�nd of the
year, installed capacity %vas 356,M0 kilowatts (key.).
The per capita comsumptiun of electricity was one of
Etropc�s highest, about 4 AHM key. hr, and 97'( of the
population has access to electricity. On average,
hydroelectric production constitutes 95`1 of the
annual output of electricit while 3`1 of the total
national capacity is hyroelectric and 2 1 is thernnI
(Figure 5).
Industry accounts for 51 li of notional consumption
of electricity. 21 by the aluminum plant at
Straumsvik. Wi by the fish processing and other
small ind list ries� 5S; by the fertiIizcr plant ill
Reykjavik. 2i by the cement plant in Akrancs, and
by the diatomite plant near %Iyvatn Luke, ill the
north. Other major consumers include households
(20r(' cornmc�rce and trade (8 "1 I, NATO Keflavik
Airfield (6ri public services (2 "1 1, and agriculture
(2(* The major cmistimption centers are Reykjavik,
Stratimsvik, and Akrtrcs in the southwest and
Ak(nreyri in the north.
Pour- fifths of the electric power capacity is owned
jointly by the National Power Company and several
municipal power enterprises. Powcrplumts solely
owned by the National Power Company acc�ourt for
another 8 of the total c and the remaining
public capacity� abeot 5S(' of the total �is in small
plants belonging to several municipal utility
enterprise The other 6f,( of total capacity is foun(I in
numerous small privately owned powerplants used
mainly for emergencies.
6
I: addition to being the largest public utility
company ill the c�oumlr\. the \atioral I o\ter
(:onpan% is in charge of supervising the c�onstru�t'.r
and operations of major hydroelectric pcwerplauts
and related transmission lines, which are genc�rall\
built b foreign contractors. I.quipmenl for
c�onstncting electric po\%cr generating and transmis-
sion facilities is importcd, mainly from Demnark.
S%%vden, West German\. the United Kingdom. and
the Unitcd States.
Development of the electric power industry is
supported by special government funds budgeted b
the Energy Board of the National Encrg Authority
and made available through the Central Bank of
Icelaild. 'I'll(- govern met it's budget for the electric
power industry amounted to about USS2.6 million in
1972. In addition, a $15 million loan obtained b\ the
Central Bank of Iceland from foreign financial
institutions was to be tsed by the \atiou.d hmer
Company for constructing lt\ po\%cr
projects.
'I'hc ec�ononic�ally exploitable waterpower potential
is estimated at i5 billion k\%. -hr. per \var. but only
about 5''(' of this total has been dcyelope(1. Ili 19 1.
Iceland's hydroelectric powerplants. \vl ic�h had an
aggregate c�apac�ih of 260,000 k\%., prodttc�ed 1.522
million key. -hr. Deyelopnuvnt has been concentrated in
the southwest, where the co(ntry's greatest
waterpower potential and most significant industries
are located. Over four fifths of total hydroelectric
installed capac�ih' is in the southwest. Ilydroelec�tric�
plants in this area inc�ludc the Burfell (160.000 k\%.
Irafoss (48,000 kw.), and Stcingrimstoo (260O0 kw.l
powerplants.
Iceland's geother:al resources are significant.
having a potential capac�it\ of about 1.5 billion k\\.-
hr. per year, but only it small fraction of this capacity
is used to prodttc�e elcctric�ity. 'I'll(- 2.625 -kw.
\untafjall geothermal powcrplaO. the onl\ such plant
in operation� supplies c�leetric�ity to the diatomite filter
plant in the north.
Electricity. used by consumers as 3 -phase 50- c�ycic
220/350 -volt c�urrcnt, is transported from po\ccrplants
to consumption c�cnters by several short transmission
systems that are not interc�onncc�ted. The densest grid
is in the soillinv'st and includes a 116- kilometer(kill.)
220- kilovolt (kv.) transmission line from the Burfcll
powerplant to the Strauntsvik aluminum plant. with
an exter.;icn leading to the Reykjavik major substation
at Ccithals. Other lines having voltages ranging
between 60 kv. and 1 I kv. serve the area. Smaller grids
serve the rest of the country with lines in the 66 -kv. to
-kv. range. Vestmannacyjar island is connected to
the soutIm system by i t 12 -knt. 35 -kv. submarine
cable.
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Expansion plans call for continued d1-%clopincnt c11
I%drue lectric caImcitN and Ilse� inte�re�4 )it ne ctit Ii of the
carious transmission .%steins. 11% (1 rocleut ric plants are�
to be coustnlcted c�nnc�etrre�n11% %%itIt nc%t potter
consunning industries. The nett 3.50,(NN)A" sigalda
pom-rplant cast of litirfe�11, for evlmplc, is tit he
contplcicd ill 1975 bell an addition to the
Straunisvik ithimimmi rcduc�tion p1mit is re�adx for
operation. 13% 197 1, the licckiaxik Mill :Wirv%ri
transmission sNstvim are to be linked. and in time all
of the regional grids arc to be inlcrc�onnected.
b. Geothermal heating
Thermal ,prinks prm idc mo %t of Iceland, hc.Ilink
rccluirement> at M cost to the consumer sulstaidialk
bel(m that fit litho NO oil or coal. \carp all tit(-
homes in tit(- liv%kia%ik area ha%e central heating
s%stcrns fed itith hot hater 11r steam piped Iron) hot
artesian in the Rctkir area or from local %%ells.
The %inter tempera tre Mt %tcllllead rimity% from I ,6'
to ?fit -1� Fahrenheit. and .it point 1,i deliccr% a%cratze.
about Iii;� 'I'll(- thermal .prinks :Intl tell� ahfi suppI%
the heating rvyiir menk of the� groscitlk grcenhomc
iit dlistr% and arc use41 to assist open -.fir culti% Ilion 1x
I) vat ing tit(- cold soil. The crl1-rg% cipikalent of till-
imimal consumption of natural steam and hot eater i�
mcr 1.6 billion k". hr.� roclkhl% e4111al to Ihe
consunption of electricih and ahmit 20'1 of tolal
ctivrgx consumption. Increased cxploitati11n fit
geothermal resoltrces for IwAink is projected to offer
-11,1,1,-11 .axing% of sonic million tons of inipt)rted oil
that \%(fill(] be needed h% lherm.11 stcampl.ots
:3. Minerals and metals U /OU
Iceland has fete knotin mineral m.ources. ()ills
diatomite. it material tv-ed in the production 111 filter.,
is exploited in commercial cltimititie�s. The island doe
produce some hi ilding material such .IS granite� .old
related rock. graced. sand. some slit% �citable for brick
manufacture. and kaolin atoll cla\ used in the
production of ceramics.
4. Manufacturing (U /OU)
a. Export induxtries
I I Fish processing� Icelan(k most importmit
industrn. fish processing al4nt ti "4 ill the
labor force almost one -third 11f the maittifactnriiig
labor force �and accounts for Ihe hulk of Iceland.
exports. More than 45 of the annual fish catch is
proc�csscd. Frozen and cured fish remain the majin en41
S
pnld1,e�1�. 11111 1i�ll fill �11,41 Ideal 11.1%4� I4.1-11trte.
incrcasitlgl\ impotl:ult a tlu� cale�lin cAull 11 .11
incn :1.4.41. 'Total .all�% of till 1970 titre� about l SSI 15 millimi
More than 411 fruiviutt ll.utls him. 14.4.11 "stablished
in co:l� ill tu%%Il rti1,g the (i�lling Ilee 1. prit.larik in
the lietkja%ik area �fhe pl.ml� .In� g4�n4-ralk modem.
are \%cll e111li114.41 \0111 lillelilig nachille...uld eolnpk
\tith the Itighe.l s.uliLm standard. In 14711 Icel.lnd s
IrevAint pl.utts lnnrssed o%er 34111111141 1114-1ric (01,�
Intro.. eteight I of lish. cllielln 1-1141. lnIIJA. 11 -1dd4e�k.
Auld rudfish. In 14; 1. v\port 111 fro/en fish fillet� the
nusl imperlmit single� exlnlrl 1-onmafilih rer4- tallied
al l `Siff million- -more Omit 11toe 111 1111-11
,�eIlort� The t illicit States I% livIalilk primar\
cusloner for fr+lze1, lisl lillel�
Fish reduction ha. Ie�come IIe� see 1nd 11141.1
important br.mch of the lisp pnaesing imlostrx in
term� 111 toml.Qe procc-s4�Il Sim mneh of the llelItm
Auld calelin c atch is mw6table for hilchim or curing.
increases in the cal.-he 111 I l-.4- fish. 4-.ltev i.Ill
cale�lin. haze� Ied 111 increased pr4alucti11n of fish oil
Mid meal. %%hich .Ire reatlik %.Mole in t%orld nlaActs
In 14711� ahmv%t �?411).111111 metric toiis of li�h %%vre
reduced. mid 17.111111 tnetri1- tin� 11) oil and .2.IN111
metric 14m, 111 nical tie� 4. e\lN4r1e41
Fish curing phut%. 1mn11,cing %%el mid 41r\ �.1114-41
1-1141. �I, and �alled Iii-mi k..Ire- t� Iticalk sniall-
�cale enterprise (onnd in all hshim: 11rts Clore Ih.u
13. metric tams evros .%eight 111 lisp %%.Is i-wril in
These plank in 14;11 \s 14-4.4.11141 capahililie�� for
fro�l-zing fish h -1%e increased. the cltrinL 11-1s (14-clined in
relath.- intpoortance
Fish culling is I snall bill grot.i1,g uiellor%
134-1%%vvit IW') and 14;11, ifs millot more than d4loiNc4l
ell %111111111� m bile� Illcrt�.Llllg slxlold ill %alloy. to 11\4-�r
l SS_' million ammalk Infl.11i11n accounts for part (o1
the rise- in %ahic of ontpnt. but more imptortmot II.Is
been the upgrading 11f ojuaht% in the vaim �d prelsllicts
since c.11111i1,g %old)% illi.11lx en11�Inc4-. the 4.x14rl xa1u4-
of fish and other wa lood prldncls. Ilt4- le�4�I .Indic
Gincr1,ntenl i% viii-1 iragmi; 1114. hnildilm 411 canning
favilit i4-�
Fa%or ble %%orld market prices avid presie�ct� (or
4111, ign �.dcs h a%v en4�eieraged slth�taiihal ime.Inlents
in the fish procesi1,g indu.lr% 114mexer. INN.
it141u.1n s cmitinued gromth is Ilre -1le1,ed h% .u
increasing �11ortage of labor I rumese� of this shortage.
.Ind Ihe :lltendant high e�4st of I.11er. Ir1Y�iing 111,1111�
Ita%.� loomed it ne ve %.11, Io pack froien fillets in kill,
rather than in indi%idiml package- dial sitortld Meld
Iigher eywrt pr4�e�ed�
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12 %111 nar I,v1;utcl s second r:utkililt c�\IurI
indIisIr\ i. ;1111mim mi production. The alumtimrtmt
pLtnl, Iuilt on Ilc� coarst Ilea Strammt%\ik b\ Skis,
1tluntinumt 1.141.. stake� use of imported r;tc% materials
:unl '!a ctIic lamer front IIt( I 3nrfcll
Indroelcclric ptoj.�.1. PrmInc�lion at the Stranms\ik
plant sarpasscd IILINNI metric ton, in 197 1 :Inc! \(:s
c�Yet to alymach 511,INN1 metric Inns in 1972.
114mv\cr. 1ccamc of slack demand ran c\orld mtarkels,
c\pcrh of itlmutinumt (Impped front 33,500 ntctric I(Ilt.
in 141711 to 17,60) metric tons in 1971. ;`its it result,
IccLutd�s ;tluninmm stocks increased grc:tlls and
amounted to mcr 511�INNI metric tom al the end (If'
1971 ail %%ere c\pected to rise Ira nc.,rk 511,111111 Inns al
the end of 1972.
13l INdt(r mite �The ether major nantfacturing
industn producing for e\pmrt is the diatomite plant ;tt
mlit-d and operated :as ;a joint \entme mf
the Icelandic ;o%errtntent and the Johns- \l it niII"
('orpmalion of the l'rtitecl States. (;mrupleled in
1966. the plants 1m)(Ittction is evecled (o surpass
22.(NN) metric tom in 19 2. Sales hasc gr"it steadily
as lilt- "wld market fir industrial filters has eyanded.
I? Dornextically fori ented industries
'I'll( small si /e of Iceland's hmtne market has
restricted the de%elopment of domiesticalk mricnted
industries to small scale prduc�tion. These industries
are depeilemt to i t significant degree om imputed raw
materials ail comportenIs. In mangy eases. mo r�mxer.
the\ rek mn tariffs fir protecticnt from more efficient
f m-ign producers. Icelandic pi of consumer
goods rather than fish prclnc�ts inc�Indes small
cluarttilies of c�lolhing, espec�iall\ oilskin, aid x%ork
clothes: w)(olen earn and garments: lanned skins and
leather goods sill a% shoes and glnxcs: baked food
products: mineral \%ater, c:utdles: and soap.
Steel (Irtms, %mmlen barrels, and packing ryes for
the fish processing iudmtr\ ;a manufac�tit red in
I(�elartd. and the c�mmntr\ is self- smffic�icml in these
goods. II is also self sufficient in the pr (hic�tion of
eerrtent ail. in some \ears, bas e\pnrled small
arnounts. "I'he Stale .'ernent Plant. at Akrames� has an
annual pr)(luctiom c�apac�it% mf o\cr 120.000 metric
tons, more than enough to meet Iceland's needs.
leeland also prodnc�es pipes, liles. and roofing slates for
use in domestic c�mmtntc�tion. Chemical production is
emneentrated in it fertilizer plant near IW%kjavik. This
plant is capable of prodtc�ing 1,0IM1 metric tons of
amnumunt nitrate annually. Iceland also prm(Itc�es
smite simple plastic products.
1(efrigcraliom ecluipntc�ml is flue c,nl\ m acbimen
produced in cluantil\. I)omrc�slic uutlul supplies inw,
of the needs the refrigeration imtallations (If the
cmuntn s quick- freezing pleads, althmugb soil� of lit(-
store� cotnldv\ c�cluiwilenl is imported. Small
shipluilding and repair cards support the local fishing
in(lustr% doing nearly all repair .cork for the fishing
fleet. SIIlm� fishing vessels are built in Icelalld (Z(i in
141711): (be\ are, for the most part, of Icss than 100g.r.t
Thromghoul the poslscar period, c�oustniction
aIdi\ itN has mtaintained it rapid pace. 13otII public and
prig alc eyendilums ()it construction increased Yrcatl\.
;merument- initiate(I infrastructure projectsit,c�Ictdcd
b(tilding roads, schools, aid ftospitals. and there %ca s it
surge of pri%al(- residential construction. Major
ItNdrmeh�ctrie;tlid industrial projects, as ell as \:C'I'O
infrastructure projects, acted to fuel the c�omslntction
bnont. :1llhmugh smite slackening bas occurred,
cmmstrctclion ac�tivit\ continues to engage about II
of late fakir force.
5. Domeslic trade (U /OU)
Wholesale and retail trade is prim aril\ privateIN
(coned. Traccic in certain c(�mtmuclities �fir example,
lmbacco, radios. liquor, fertilizer �is, hom er, subject
to gmernment nunupml. \lam\ firms acre members of
c�omperatives \chic�h play am imtporlamt role in [),)lit
foreign and (Imtnestic� trine.
Marketing of farm produce is largely c�nntrolled b\
the num ero(Is agricultural c�o)peratkes. (chich in
ntzut cases act as both \c holesafers and retailers. \lore
than ome thind of the retail (listribution of foodstuffs is
carried out bx these c�ooperativrs. lit licit of it in
modern self u�rx ic�c stores pioneered in Iceland be the
Federation of Icelandic (:ooperatixe Societies in the
195(t' s.
\loch of the retailing of nonagric�ttlltral prodru�ts is
handled bx small firms that have joined retailer
cooperativvs to gain the ad\auttage of more
ecomotmic�al balk purchasing and to improve their
positions xis a -\is it gr\simg mmmber of IIi it hl%
c�cmtpetiIixe supermarkets aid (Iisc�m(tut stores.
Wholesalers c,f nomagric�ultural items are generall\
i mtportcrs as m c11. These \s bolesalcrs have been
pressing for it c�urtailmu�nl of the price c�omtrols and
government monopolies and for kwer lariffs.
13ec�ause mf the c�onc�enlratioil of Ic�eland's
poPmlatiom in the Hev kjavik area, most trade
enterprises are loc�aied :here also- boll t 80('( to 9U('; of
wholesale enterprises arc in the Rev kjav ik area, as are
an ovrrvvheliing proportion of the c�ottntrs's retail
9
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establishmu�nts. Fey% foreign limns have branches in
lcelamel; instead, their business is conducted 1v
Icelandic agents.
6. Tounsm (U /OU)
Although still snndl. Icelan(k tourist trade is
making it growing contribution to the economy. The
number of tourists visiting Iceland in 1971 was pearl%
k "l,W), it 60 "1 increase over 1967. Abnost half of the
tourists come from the l'nited States.
A major benefic�iar% of the inc�rcasint; tourist trade
hits beer; Iceland's rapidl% it rewitg airline, I� )ft le0er.
The privatc�I% owned airline, as it result of rising
transatlantic- passenger traffic� has significantly
increased its activities and contributes substantiall% to
the island's ernploy inent and foreign hange
receipts.
C. Economic policy and development
(U /oil)
1. Governmental economic policies
In the tradition of the Sc�anclana-ian countries, the
Icelandic Government exerts far- reaching influc�ncr
over the e:�ononty. The postal, telephone, and
telegrapl. systems are goveriinie�nt owned and
operated. as arc most of the hydroelectric powerplimts
and other public utility installations. Additionally� the
government maintains it number of sales inonop-
olies- irirlucling those for tobacco, lieluor, fertilizer.
radios, and teleeeIlltllllnicatie rl ee1111 j1111ent. 'I'lle go\-
ern ntent also owns the central hank and the I ;rinciI l
commercial banks. Ali extensive system of goveriunent
subsidies supports the production a n(I marketing of it
wide range of goods, not only in agriculture hilt also in
fisheries and inclttstn and the government manages it
cot tprehensiye progrant of social insurance and
assist- nrc. Special public investment fonds finance it
large share of investment outlays in the private sector
of the economy.
a. Fiscal policy
Since the introduction of the stabilization program
in 1960, the government has tried to balance its
budget or run surpluses so its not to contribute to
inflationary pressures. In 1967 -69, action taken to
offset it recession led to substantial deficits. Sharply
higher revenues returnecl the budget to surplus in
1970. Iceland's budget for 1970, with major categories
oI revenue duel expenditure, is shmyn iu the follo"ing
tabulation in millions of U.S dollars: dollars:
Revenue:
Direct taxation 19.6
Indirect taxation 89.0
Other 2.8
Total
1 11.4
1:xpenditure:
Current outlays:
lei. l
Purchase of goods and services
35.5
Current transfers
42.0
Capital transactions:
:t4.;
Cross fixed asset formation, public
9.3
Lending, net
-1.2
Capital transfers
19.8
Total
105.4
Surplus
6.0
h. Central gorernment revenues
Iceland relies on indirect taxes for the bulk of'
goyernnte�nt revenue. General import duties tradition-
ally have been the most important source of revenue.
although their share has been declining. I.eyied since
1963 on an ad valorem basis. general import dillies
were expec�tecl to provide more than 28 "1 of total
revenues in 1972 (F igure 6). The domestic sales lax has
been the most r;Pi(ll\ growing source of revenue since
FIGURE 6. Central government revenues, by source 0 972
budget) (U /OU)
(Millions of U.S. dollars)
esutrvr
Dinrt taco.::
'fazes on incolm. and %%valth 21 1
Social security contributions 12.6
1 'ot:d I...
31.1
Indirect taxes:
ceneral impart duties,
lei. l
NPocial import dinv on gasoline :uol tiros.......
Excise dillies
2.0
Sales tax...........
:t4.;
I' ayrolltax
7.9
1'rofit.s from sale of tehacoo and alcoholic hev-
er: ge s
12.5
st:unp duties
I.-N
General automobile tax
2. I
'fax on hank transaction s
1
1 ther indirect taxes
1.7
lievenue front state enterprises
I
Gscellaneous
0.!)
Total I 121.0
Grand told 162.2
\O�fl�: Figures IIM not add to totals hveutse of rounding.
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1960. Increases in tic� tax rate and rising national
e.xpendittires raised the expected sales tax eolleeliorls to
nearly 23!7 of total revenue in 1972. The share of
direct tines in the total is now higher than in (he early
1960'x, but still aMo'mts to only about 21 r1
Conversion of the income tux system in 19117 to a pa%-
you -earn basis has increased the autonrttic
stabilizing effect of income tines on the economy.
c. Central governrnent e'xpenditure's
Social welfare pad nu�nts goyenlruent contribu-
tions to social security, pension programs, and public
health accocnt for it large part of go%virnnu�ut
expenditures. In the proposed 1972 budget, these
categories account for :37 "1 of all government
expenditures (I-igury 7). Expenclitwes coil educational.
cultural, and religious institutions account for the
second largest budget allotment -19 of the tolal.
Domestic and export subsidies, used largel% to support
the sale of agricultural products, make up another
I W/C' of the total. Other large budget items coyer
transportation and c�1n i ttnieation. and public
administration and justice.
Of the total proposed 197 !midget outlays of
US$159 million, only slightl%. over one third c�onlprise
direct government expenditures. As indicated in the
following tabulation� the extent to which Icelandic
c�entra! government expenditures reached the
marketplace indirectly� through transfers such as
social weIA are pa%rncnts. subsidies, and capital
trulsrers is high compared with other Sc�anclanayian
countries:
Capital transfer, are largek c�llanneled through
semiautonomous public irtvestnrent funds. The three
most important of these funds, in terms of valve of
loans extended, are the Fisheries Loan h'uncl. the
Agricultural Loan I�'und, and the Industrial Fund.
Other investrnew funds i1whide funds which extend
loans for tourism, municipalities, and enlplo%nent
etlualiza ion.
FIGURE 7. Central government expenditures, by use
(1972 budget) (U /OUi
(Millions of U.S. dollors)
%Noll
W Ill u:,Ir:tU:oil and Ju,1u�l�
Ia
PERCENT OF TOTAL
I s
{duvation. vidwral and I�hKu, rn
CENTRAL GOVERNMENT EXPENDITURES
ICELAND
DENMARK NORWAY
FINLAND
Total central govern-
Tran,purUU:m and i�nnIll uua�a Ili Is
ment expenditures
100
100 100
100
Total transfers
63
35 �11
31
Current transfers
45
34 40
30
Capital transfers
17
1 1
1
Total direct govern-
ment purchases of
goods and services
38
65 159
69
Public consumption
31
50 46
45
Pui`ic investment
7
15 13
24
Capital transfer, are largek c�llanneled through
semiautonomous public irtvestnrent funds. The three
most important of these funds, in terms of valve of
loans extended, are the Fisheries Loan h'uncl. the
Agricultural Loan I�'und, and the Industrial Fund.
Other investrnew funds i1whide funds which extend
loans for tourism, municipalities, and enlplo%nent
etlualiza ion.
FIGURE 7. Central government expenditures, by use
(1972 budget) (U /OUi
(Millions of U.S. dollors)
%Noll
W Ill u:,Ir:tU:oil and Ju,1u�l�
Ia
1hipliminur wr%ire,
I s
{duvation. vidwral and I�hKu, rn
311 5
Social wrura
is 3
Tran,purUU:m and i�nnIll uua�a Ili Is
17
\grivultun�......
s 1
Fisheries..
3 5
NIanuAu�lurng indu.�Ir'i
11
1'on,wtier .uh,idn
1% Ii
St:ty 1:uar:wnr fund.
1
1 1
d. Wage and prier' confroh
Follo%%ing alnttst 1"o dcc :nh s of rapid inflation. the
Icelandic Coyernment in \oyem1wr 1970 instituted it
general price freeze "Mich it-- in effect nnlil Ja11nar%
1972. The enabling legislation provided for it
postp ollenu�nt of it cost of- living "age adjnstnent
from December 19711 to Septendwr 1971. It also raked
family alloyyartces and cottsurller subsidies Ili, I%
hich .omen hat reduced the ley el of the cost ,f liv
irulex. The price freeze held the Hv%kj,tyik r- ost -of-
Iiying index essentially unch:utged throughout 1971.
thus providing some breathing .pace for the
government to give attention to longer term issues.
I- nllo%%int; the expiration of the price fret re. ho%%eyer.
priee% resumed their rapid increases, de�nite a
continuing .\.lent of eonlrok.
e. Banking; system
&Inking in Iceland date% from the late 19111 cenhtr%.
The cotmtry'. spare I olmlation. ctupled %%ith little
industrial activity. had fostered the dv%clopnle�rt of :I
.ilnple. highly .e sufficie ecrnonty in which barter
%%it% the plain nlodl. of exchange: it small amount of
cash hu�ines yya� transactor! in Danish viarency
llhoelgh the rational Rank of Iceland (LaIdslxanki
1-.land-.l. established in ISS5. and the Danish- oyyned
Dank of Iceland. Ltd. (Ixlandibanki, h.J.). established
in 19111. facilitated the development of Icelandic
fisheries and fish provessi11g. banking did 114,1 assume
major importanev in the ecoi, only until after World
War 11,
APPROVED FOR RELEASE: 2009/06/16: CIA- RDP01- 00707R000200110052 -6

(:ommercial Ianks tlll nn1.t of the kmkimt hlnilless
The\ account for mearl\ ST, 111 aII balms l )it IstamIinl;
:Intl for pearl\ 90', 111 demand (It pmiIs :Intl mcr
"f time depo�ils. The principal c"ntnu�rciall baulks my
the I~I\em u�nt- tmitud \ali"nal Baulk ('t Ic�clauld. the
Iitrricultural Baulk "I Icclaml Ilimmilto a ski Wmuls
Mill the Fisheries Kink I 'Ice- 4)(iuki Islands 1 "These
hanks vilgagt� in all h lies 111 baulkhm acti\ ilics.
although Ihc latter h\o plat\ special n11cs in hnaurc�int;.
rt�%Im- vIi%vI\, algricultum :Intl the fi.hilig :Intl fish
prrvv %iiig inthistriv%. "three pri\alc j('inl stock
c('nlntt�rt�ial banks ha\e been organised in the posl\\alr
period: the Industrial Batik of Ivelauul Ilduardarlatki
Iilauds, Itf.l. \\hich proem r% Ihc tlt�\t�lopnu�nt :Intl
di\ersificalion of indn.tr%: and the Iceland Koil, of
(:omnlcrue (1"er:lunarbanki I.slands1 and the
(:otpvrati\c Bank ISainonoula nki Island% \\hick
act ;is hankers to Iccland ina m cooperali\c
orl;aniialions. .%s it result of booth the rise in business
acti\it% and strum; inflation. fill- \aloe "l balls
out.tantIhm rise b\ mer �ill', tl trill t; the ItllilI' ;In(l
.a\ing. deposits increased In mcr 11111', Burin, Ihc
the period.
11,4)111 fill .at\inm. baulks. most of Mich are small
inslitlttl('Irs prm 11 imt .1 \Illt;s dep"sll I.U'lllli mid
grantintt loans, primaril\ for Itc.11 t�onslntoioll
project�. %cr \1� the need "l the popul.11imi ill imill
t('\\ 11� and mr.11 areas.
tiuper\i.ion :ltd c :mtrol mer the entire hamkiult
.\.tern is exerlked II\ the };11 \1�rll ictit-imned (ventral
Batik of Iceland (Nedlal,anki I\landsj. mmtil 19111 a
departm eid "f Ilw \aliomal Bank. in other Western
comntrics. the ventral bulk I(mmilates and c\eeull-;
mmnt� tar\ polio\. 'the central baulk is Ihc sole b.tmk of
mite i.sm�. the redisc"unl institution h1r Ihc entire
Itatlkitm �\,tem..Ind the trea.ur\ Icposil"n "hilzethcr
\\its tilt- \tinislr\ of :onunen�c. It adminislers torc hzii
eAchante controls.
primar\ "Ijecti\t of Icelandic lm melar\ polic\
hits I let -it the c pit taimna�mt (il rccorriiw iitIIjIiollar\
pressure.. II,mi-\er. the relati\cl\ hilmd position "I
the commercial banking s\ste11l dmin>; rincsl "t till-
p"sh\ar period resultitm front hr4f. net intlom of
foreign CU'limlt;e and it rapid rise in dt ami
.t\ IIIt;s dvp4, rc�1111t cd 111,� kmk, dupci llelle,' �II
central bank disc"unt and credit facilities and
impaired the 1� I'vo \1�tlt�s� of It 111111�lar\ cmitr111s
2. Dci�e lopment
Icel :rld's pmr.11t t h fir brtladcr economic de\el"p-
r.,ent are limiled !r\ Ihc poicil\ "I halm al res"mrccs
inchidint; labor �and the .mall domu�stic market
\urn (belt ss Ill t:meminvi l is resoled to !hoiden
12
the co r\ ec"tl"Illlc bane and to sl I lied Its hasic
induslrics \111111111;11 IccLonl Ila, n" limmil cconoulic
plan 11111� lirsl mid oil\ plan e\pired in 1966 it has
se\cral \%4.11- dclined t,oals fill ifs econoln\.
I�'orcnlost all mac Iliew ,;"ails is dkersilicaliom of t!:e
cc"numl\ ,o as to n duce dependence on ttic inhercnll\
umslalblc lishim4 industr\. In c�onsommicc \\ith this
,;"al, public i11\csl 11 let t c\ pt�rlt l i t u r cs lit \c I11'vII
lhrccled to capital Iminatloll ill n tit nlll act rlrillt;
industries and ill inlraslructun� pncjc�c�Is, I)alrlicolarl\
It \(I r"eleclric itmcr .0114,1101 Iccla nd is reluctant to
accept lwvit;n direct im\estnu�ol, the dialontile and
.Ilun plant denunntralc that this alliNdc s
lle\i1Ic \\ierc it hc�nelit to the 1ccIllladic cc('nolli\ is
peret�i\ cd.
Icclatrltl s c"rllplt s\stl�n1 of snlcsi Bank
l+rJurlarhariki 1.4nds..........
IeeL�uld Bank of l'++mtu+�rv�+�
Idnnr+hlrbanke Islands� h, i
ludutrml Bank of Ireland
l. nn.leharrk+ /sMnds
\atiomrl Bank ++f I+�oland
urkuxlo fit aa
\:ititmaI 1�:ner0 AitIhunI
Lond svirk lun
\at Ilona 1 1 oHrr ('otnpanc
form sookmrood
\ationaI IteseareIt ('oohed
it hrr++l
I'arli :+ntent
16
CONFIDENTIAL
APPROVED FOR RELEASE: 2009/06/16: CIA- RDP01- 00707R000200110052 -6