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'Iceland down but not out'

Iceland president said although reeling from the global financial crisis, Iceland is well positioned to recover and can serve as a model on how to tackle the energy and climate change challenges.

business Updated: Oct 14, 2008 22:00 IST

Although reeling from the global financial crisis, tiny Iceland is well positioned to recover and can serve as a model on how to tackle the energy and climate change challenges, its president said on Tuesday.

"In the current global financial hurricane, Iceland and others have been reminded, to use an analogy, that when a hurricane passes over the ocean toward powerful mainlands it usually crosses small islands where the destruction can be substantial," Olafur Ragnar Grimsson said in a video address to a UN seminar.

Iceland is reeling from the near wipe-out of the country's banks. In one week, the Nordic nation of 313,000 people has gone from a rich, prosperous country to one that is on the brink of bankruptcy.

But Grimsson said that experience had shown that "small states, due to their flexibility and the closely knit networks of cooperation which characterize their societies, can recover surprisingly quickly."

"Icelanders are fortunately aware that despite the current financial challenges, our long-term resources are fundamentally strong," he told the seminar on the theme "Small States - Emerging Powers."

Grimsson pointed to Iceland's "enormous wealth in the potential for clean energy production, both geothermal and hydro, strong fish stocks, large reservoir of fresh drinking water, plus the beautiful natural wilderness, valleys and rivers."

Stressing that the physical resources of a country were no longer a decisive factor, he said "a small country is now well placed to be a creative laboratory, a fertile ground for constructive ideas."

Turning to climate change, Grimsson noted that his country is witnessing "the alarming rate of melting of our glaciers, which are the largest in Europe."

"We also struggle with the largest desert in Europe, fighting for a century with systematic scientific projects in soil preservation and soil reclamation, producing lessons and experience which have now become increasingly relevant for nations in Africa and Asia, and even for the United States," he said.

"The fight against irreversible climate change is fundamentally about the future of energy," he added. "If the Icelandic model were followed on a global scale by utilizing the variety of clean energy resources available to every country, global warming could be clearly slowed down or even averted."