Iceland, a country that lies in the middle of the Atlantic Ocean and is isolated from North American and European soil, has essentially been ignored by the rest of the world for over 1,000 years. Interestingly, Icelanders developed a particular psyche in which they pride themselves on the Viking spirits that allowed them to survive the constant natural disasters and the rule of foreign monarchs. It seems, to me, that this particular mindset has made “preserving a national identity” and “desire for international recognition”on the top of the list for Iceland in international engagement.
Iceland used to be one of Europe’s poorest countries, surviving the damages caused by volcano eruptions, earthquakes, and famine, while most other European countries enjoyed the prosperity brought by Age of Enlightenment and Industrialization. However, by the turn of the 20th century, Iceland had become of the world’s richest nations, representing almost a utopia by topping every international wealth, health, and equality chart. During Prime Minister David Oddsson’s reign from 1991 to 2004, the national banks were privatized and deregulated. Soon the banks started borrowing money cheaply from abroad and transforming revenue streams back home without no prior international banking experience. Within only six years, three Icelandic banks made the list of world’s 300 biggest banks. Through foreign acquisitions and expansions, infrastructure development, and social policies that focused on distributing wealth through health and education investment, Iceland made the shift recently and rapidly (Wade & Sigurgeirsdottir, 2011).
Throughout Icelandic history, the fear of mis-recognition by foreigners has saturated Icelandic minds, possibly due to the country’s small size and marginalized position. The fear was even reflected in daily conversations, where the primary scholarly task was to be understood by foreigners, as opposed to understand them (Durrenberger and Pálsson, 1989).
A handful of successful Icelandic investors, who were largely responsible for the accelerated economic growth, were portrayed in the media as “Business Vikings”. The constant media celebration on the success and lifestyle of these man, understandably, came at the expense of neglecting the contributions of immigrants to the Icelandic economy. By comparing the businessmen to the Vikings in the age of settlement in the 9th and 10th century, Icelanders were invoking a nationalistic image in which they were endowed with unique and characteristic traits that success was just an extension of their Icelandic nature. The characterization was not only seen in media representations of financial news, but also frequently expressed by political leaders and various ministries of Iceland. Such discourse extracted an image that Icelanders would like to portray, which seem to evoke the feeling that Iceland was finally visible to the world (Loftsdóttir, 2010). In the process of building a discourse on collective nationalism, many irresponsible decision-making and risk-taking behaviors in the financial sector were legitimized as being part of the aggressive and masculine Viking heritage. Similarly, criticisms and warnings on the Icelandic economy in 2006 were dismissed by the government as ill-intentioned attacks on Icelandic nationalism by envious foreigners, resulting in defensive PR campaigns in London, New York, and Copenhagen (Burgmann, 2014).
However, despite denial and PR efforts, unconventional financial behavior did bring short-term gains as well as exposure to long-term problems. The financial crash in October 2008 turned Iceland’s international image upside down. The once-considered Business Vikings, in fact, were the very people that led the country to the brink of State bankruptcy. Iceland was shouldering $100 billion debt – with just 330,000 inhabitants, that’s $300,000 for every man, woman, and child in the country (Chartier, 2011, 14). Iceland’s international reputation was ruined – in just a couple of months it turned from a utopia to a State defaulting its obligations, or a counterexample, for the rest of the world. Suddenly a country that was left alone in the middle of the ocean for 1,000 years could not get out of the spotlight (Chartier, 2011, 47). Without a doubt, the collapse of the banks was simultaneously a crisis of capitalism, and a crisis of national identity to Iceland. No country at the time was willing to provide cash to help Iceland bail out its crippled financial system. When the country’s Nordic neighbors suggested going to the International Monetary Fund (IMF) for help, the Icelandic government considered it humiliation that it had failed to be recognized as an independent and fully functioning nation (Burgmann, 2014).
References:
Burgmann, E. (2014). Iceland and the International Financial Crisis: Boom, Bust and Recovery. London, UK: Palgrave Macmillan.
Chartier, D. (2011). The End of Iceland’s Innocence: The Image of Iceland in the Foreign Media during the Financial Crisis. Ottawa, Canada: University of Ottawa Press.
Durrenberger, P. & Pálsson. G. (1989). Every Icelander a special case. In Pálsson , G. and Durrenberger, P. (eds). Images of contemporary Iceland: Everyday lives and global context. Iowa City: University of Iowa Press.
Loftsdóttir, K. (2010). The loss of innocence: the Icelandic financial crisis and colonial past. Anthropology Today, 26 (6), 9-13.
Wade, R.H., & Sigurgeirsdottir, S. (2011). Iceland’s meltdown: the rise and fall of international banking in the North Atlantic. Brazilian Journal of Political Economy, 31(5), 684-697.
-Jiaorui Jiang-