Iceland’s 103,000 square kilometers (39,756 sq. miles), with 4,970km (3,088 miles) of coastline, make it the 16th-largest island in the world. Only Madagascar, Britain, and Cuba are larger single independent island states. Hvannadalshnjúkur, Iceland’s highest peak, rises 2,110m (6,922 ft.). Roughly 10% of the country is covered in glaciers, and the land is a hotbed of geothermal activity. Natural hot water piped into Icelandic homes means that most of the population has inexpensive, non-polluting heating. Icelanders boast one of the highest life expectancy rates in the world, perhaps because of the clean air, clean water, and plentiful fish.
Only about 4% of Iceland’s population of just over 338,000 people lives in rural areas, with roughly three-quarters living in Reykjavík, the capital. If you think the streets are looking more crowded than these figures suggest, keep in mind that around 2 million tourists each year are out and about too, especially during the summer.
The country’s Alþing (parliament) sits in Reykjavík, and its current prime minister is Katrín Jakobsdóttir (since 2017). Guðni Thorlacius Jóhannesson (2016) is serving his first term as president.
Most of the tiny amount of Iceland’s arable land is used for grazing, and just 1% to 2% of Icelanders are engaged in agriculture. Iceland imports much of its foodstuffs, but also produces vegetables, meat, fish, and dairy. The Icelandic economy has traditionally been driven by fishing and fisheries products, but the other main export today is aluminum.
In 2007, when Iceland was surfing the economic boom, the U.N. named it the world’s best country to live in: It had the best life expectancy, best education levels, and best medical care, and personal income was at an all-time high. When the economy crashed starting in October 2008, the country suffered great financial losses, and many Icelanders were left floundering in an ocean of debt. For months, the people of Iceland protested their outrage on a daily basis outside the houses of parliament, banging on pots and pans and pelting the vehicles of politicians with eggs and skyr (an Icelandic milk product similar to yogurt). The government was finally driven out of office by what is now known as the “kitchenware revolution.”
The relatively small size of the country and its economy was one of the reasons it was hit so hard and so early by the global financial crisis. But this has also enabled Iceland to bounce back on its feet relatively quickly. Unlike the rest of the world in the years that followed, Iceland let its banks fail and jailed those convicted of crimes. Within a few years it was already hard to see any outward signs of an economy in trouble, and the government continues to offer tax incentives to people willing to keep constructing buildings or expanding businesses, in order to keep the wheels of commerce turning.
Although some Icelanders went so far as to migrate (mostly to Norway) during the height of the slump, migration to Iceland has steadily continued (almost 13% of the population is foreign), and on the whole people still have an excellent standard of living.
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