Background: Settled by Norwegians and Celtic (Scottish and Irish) immigrants during the late 9th and 10th centuries, Iceland boasts the world's oldest parliament, the Althing, established in 930. Independent for over 300 years, Iceland was subsequently ruled by Norway and Denmark. Limited home rule was granted in 1874 and complete independence attained in 1944. Literacy, longevity, income, and social cohesion are first-rate by world standards.
The isolated location of Iceland has resulted in limited immigration and limited genetic inflow in its human population over hundreds of years. This resulting genetic similarity is being exploited today for genetic studies.
Iceland's Scandinavian-type economy is basically capitalistic, yet with an extensive welfare system, low unemployment, and remarkably even distribution of income. The economy depends heavily on the fishing industry, which provides 70% of export earnings and employs 12% of the work force. In the absence of other natural resources (except for abundant hydrothermal and geothermal power), Iceland's economy is vulnerable to changing world fish prices. The economy remains sensitive to declining fish stocks as well as to drops in world prices for its main exports: fish and fish products, aluminum, and ferrosilicon. The center-right government plans to continue its policies of reducing the budget and current account deficits, limiting foreign borrowing, containing inflation, revising agricultural and fishing policies, diversifying the economy, and privatizing state-owned industries. The government remains opposed to EU membership, primarily because of Icelanders' concern about losing control over their fishing resources. Iceland's economy has been diversifying into manufacturing and service industries in the last decade, and new developments in software production, biotechnology, and financial services are taking place. The tourism sector is also expanding, with the recent trends in ecotourism and whale-watching. Growth is likely to slow in 2000, to a still respectable 3.5%.
From the CIA World Factbook 2000 and the U.S. Department of State website.