ICELAND SPAR

also called Iceland Crystal, a transparent calcite used for polariscope prisms. See calcite. The economy The Icelandic economy is based heavily on fishing and the production of a broad variety of fish products, but it also includes manufacturing and services. Exports account for about two-fifths of the gross national product. Despite Iceland's small population, the economy is modern, and the standard of living is on a par with that of other European countries. Most of Iceland's production is in private hands. Government ownership has declined since the early 1990s through increased privatization of government-owned enterprises. The state still owns two commercial banks and several other financial institutions and shares ownership of most electricity-generating systems with local governments. The central government receives a major portion of its income from a value-added tax and a progressive income tax, whereas local governments derive most of their revenue from a flat-rate income tax and property levies. Since World War II the government has aimed at a high rate of economic growth and full employment, and fluctuations in fish prices and catches have been an important influence on the economy. Iceland's real gross domestic product (GDP) increased by an average of about 4 percent per year after the war. After 1987, however, there was a slowdown in economic growth owing to limits imposed on fish catches in response to the depletion of fish stocks that had been overexploited for many years. From the late 1980s to the late 1990s the annual GDP growth rate averaged less than half what it had been. From 1994, however, there was a strong resumption of growth, mainly as a result of an improving fish catch. The inflation rate was high up to the end of the 1980s but thereafter declined. A low rate of inflation did not become a priority until the early 1990s, but Iceland now enjoys as low a rate as the other northern European countries. Unemployment has remained low. Resources Iceland's energy resources are vast. Feasible hydroenergy is estimated at nearly six gigawatts and geothermal energy at more than 1.5 million gigawatt hours per year. Only about one-eighth of the hydroelectric power of the country's rivers has been tapped. Geothermal energy heats all of Reykjavk and several other communities; it provides steam for industrial energy and is used in commercial vegetable farming in greenhouses. The land Volcanism Geologically young, Iceland contains about 200 volcanoes of various types. A new volcano erupting on the bottom of the sea between November 1963 and June 1967 created the island of Surtsey, off the southwestern coast. The new island grew to about 1 square mile (2.5 square km) in area and rose more than 560 feet (170 metres) above sea level, a total of 950 feet (290 metres) from the ocean floor. Volcanic activity has been particularly frequent since the 1970s. A major eruption took place in 1973, when a volcano on Heima Island (Heimaey) spilled lava into the town of Vestmannaeyjar, an important fishing centre. Most of the 5,300 residents had to be evacuated, andalthough the harbour remained intactabout one-third of the town was destroyed. Continuous eruptions took place in the Krafla area in the northeast in 197584, damaging a geothermal generating project in the area. Iceland's best-known volcano, Hekla, erupted four times in the 20th century: in 1947, 1970, 1980, and 1991. There also were two eruptions in the Vatna Glacier area, in 1983 and 1996. Relief Iceland is largely a tableland broken up by structural faults. Its average elevation is 1,640 feet (500 metres) above sea level, but one-fourth of the country lies below 650 feet (198 metres). The highest point is 6,952 feet (2,119 metres), at Hvannadals Peak, the top of rfajkull in Vatna Glacier. The glaciers range in size from those in small mountain recesses to the enormous glacial caps topping extensive mountain ranges. Vatna Glacier covers an area of about 3,200 square miles (8,288 square km) and is about 3,000 feet (914 metres) deep at its thickest point. Much of Iceland is underlain by basalt, a dark rock of igneous origin. The oldest rocks were formed about 16 million years ago. The landscape in basaltic areas is one of plateau and fjord, characterized by successive layers of lava visible one above the other on the valley sides. The basalt sheets tend to tilt somewhat toward the centre of the country. The U shape of the valleys is largely the result of glacial erosion. The depressed zones between the basalt areas have extensive plateaus above which rise single volcanoes, table mountains, or other mountain masses with steep sides. Iceland has more hot springs and solfatarasvolcanic vents that emit hot gases and vapoursthan any other country. Alkaline hot springs are found in some 250 areas throughout the country. The largest, Deildartunguhver, emits about 48 gallons (180 litres) of boiling water per second. The total power output of the Torfa Glacier area, the largest of the 19 high-temperature solfatara regions, is estimated to equal about 1,000 megawatts. Earthquakes are frequent in Iceland but rarely result in serious damage. Most of the buildings erected since the mid-20th century have been built of reinforced concrete and designed to withstand severe shocks from earthquakes. Traditionally, Iceland has been divided according to the four points of the compass. The centre of the country is uninhabited. In the southwest several fine natural harbours have directed interest toward the sea, and good fishing grounds lie off the shores of this region. Because of its extensive lava fields and heaths, the southwest has little farmland. The middle west is divided between fishing and farming and has many places of great natural beauty. The western fjords have numerous well-sheltered harbours and good fishing grounds but little lowland suitable for agriculture. The north is divided into several smaller districts, each of which has relatively good farmland. The eastern fjords resemble the western fjords but have, in addition, an inner lowland. The southeast, locked between the glaciers and the sea, has a landscape of rugged splendour. The southern lowland comprises the main farming region. Soil and climatic conditions are favourable, and it is close to the country's largest market, Reykjavk and its environs. The people The population of Iceland is extremely homogeneous. The inhabitants are descendants of settlers who began arriving in AD 874 and continued in heavy influx for about 60 years thereafter. Historians differ on the exact origin and ethnic composition of the settlers but agree that between 60 and 80 percent of them were of Nordic stock from Norway. The rest, from Scotland and Ireland, were largely of Celtic stock. The dominant language in the period of settlement was Old Norse, the language spoken in Norway at the time. Through the centuries it has evolved into modern Icelandic, which is used throughout the country. There are no racial or ethnic distinctions. The early Nordic and Celtic stocks have long since merged, and the small number of subsequent immigrants have had no major effect on the population structure. The Lutheran faith has been the dominant religion since the mid-16th century. About nine-tenths of the population belongs to the state-supported Evangelical Lutheran church. There is freedom of religion. Demographic trends The first comprehensive census in Iceland was taken in 1703, at which time 50,358 people were reported. The 18th century was marked by great economic hardship, and by 1801 the population had declined to 47,240. There began a slow increase in the 19th century, and by 1901 the population had risen to 78,470. Accelerated economic growth during the early decades of the 20th century was paralleled by a rapid growth in population, which in 1950 reached 143,973. During World War II and the early postwar period there was rapid improvement in the standard of living and a new acceleration in the rate of population growth. The annual growth rate reached its peak during the 1950s; it has been declining since 1960, primarily because of a sharply reduced birth rate and continued emigration. For a brief period from the late 1980s to the mid-1990s the birth rate rose again before resuming its downward trend. In the late 1980s the population reached a quarter of a million.