The Northwest Passage: Present Status and Emerging Questions

(Photo by M. Lanteigne)

The Northwest Passage, traditionally defined as the Arctic waters between Baffin Bay and the Davis Strait in the east to the Bering Strait in the west, is emerging as a major issue for both Canadian and greater Arctic affairs as a result of eroding ice and the possibility of the waterway being used in the near future as an international shipping route. Unlike the Northern Sea Route (NSR) north of Siberia, the NWP is dominated by dozens of large and small islands, (including Baffin, Ellesmere and Victoria), presenting several potential routes which may open up to expanded maritime shipping, but also more varied navigational hazards. Nonetheless, the route is being viewed by Arctic, and increasingly non-Arctic, actors as an emerging option for faster shipping between the Atlantic and Pacific Oceans, and as a result the long-dormant political and legal issues in the region are slowly but steadily being pushed back to the forefront of Canadian Arctic politics.

The core issue surrounding the NWP is that the exact legal definition of the waterway remains very much open to interpretation, with Ottawa viewing the waterways which comprise the Northwest Passage, (now commonly referred to by Ottawa as the ‘Canadian Northwest Passage’), as internal waters, and therefore under Canadian jurisdiction. However, the United States has maintained for decades that the Passage is international waters, a stance unlikely to be changed by the Trump administration.

These differences have led to occasional diplomatic incidents between Ottawa and Washington, including in 1969 when the American oil tanker Manhattan made the crossing, escorted by the Canadian icebreaker John A. MacDonald and two American icebreakers, and in 1985 when an American Coast Guard icebreaking vessel, USCGC Polar Sea, used the NWP to travel from Thule, Greenland to the Chukchi Sea off Alaska without requesting permission from the Canadian government. Both cases touched off heated debates in Canada about the country’s Arctic interests and sovereignty, issues which became more pressing after it became clear that with ongoing warming trends, the waterways could be opened up to further transits.

An Agreement on Arctic Cooperation [pdf] was struck between Washington and Ottawa in January 1988 which affirmed that the United States would seek Canadian consent for American icebreaker vessels to operate in the passage. However, through the use of a ‘non-prejudice clause’, the document skirted the question of Canadian sovereignty and whether the US was maintaining its view of the passage as international rather than a Canadian internal waterway, leaving that issue still unresolved. Since that time, there had been a tacit ‘agree to disagree’ policy between the two countries, with the idea that the matter was not particularly urgent given that the region was traditionally seen as unsuitable for any sort of regularised maritime transit due to climate and ice conditions. The events of the past decade or so, however, have prompted a re-evaluation of that viewpoint.

Arctic Portal Shipping maps
Map by Arctic Portal, (See

In addition to the changing ice conditions in the Canadian Arctic Archipelago, political pressures are also prompting the reopening of the NWP question. However, the United States has so far not been the major ‘push factor’, since it remains uncertain whether the Arctic will be a major area of concern for US foreign policy under the Trump administration. Case in point, the recently released American National Security Strategy [pdf] only mentioned the Arctic once, en passant, as an example of international institution-building, and there was no mention at all of climate change in the region or elsewhere as a strategic concern. Save for pushing for the controversial opening of the Alaska National Wildlife Reserve (ANWR) for future oil and gas exploration, there have been few signs of any sort of deepening of US Arctic policies under Trump.

China, however, has identified the Arctic as a growing economic concern as a result of the region’s energy and resource potential, as well as a emerging boon for Chinese shipping interests. In April 2016, Beijing announced it was seeking to make future use of the Northwest Passage for its expanding maritime shipping in order to reduce time and fuel costs for its cargo vessels traveling from China to the North American East Coast and the greater Atlantic Ocean.

As the Arctic Ocean becomes increasingly ice-free in the summer months, China has previously expressed interest in making expanded use of Arctic transit routes for faster shipping, but that statement was the first time that the Northwest Passage had been specifically cited as a priority for Beijing. Since the government of President Xi Jinping took office in 2013, Beijing has been seeking to expand it trade in many parts of the world, including via the ‘Belt and Road’ initiative which would entail the opening of both land and sea routes between China and key global markets.

This year, the Chinese and Russian governments expressed joint support for expanded cooperation initiatives to create a ‘Silk Road on the Ice’ [In Chinese] (bingshang silu 冰上丝路) via various port and transportation projects. The end of 2017 has seen an uptick in enthusiasm in some quarters for the potential of larger scale Arctic shipping, including within a report by the Russian news agency TASS suggesting that the NSR might service up to 105 million tonnes of cargo after 2030.

China’s Arctic shipping interests has so far been concentrated on the Northern Sea Route, but the possibility is growing that a Chinese cargo vessel might seek to transit the NWP sooner rather than later. Also in April 2016, China’s Maritime Safety Administration (Zhonghua Renmin Gongheguo Haishiju 中华人民共和国海事局) published an Arctic navigation guide [In Chinese] which detailed the conditions and geography of the Canadian Arctic Archipelago and its potential use by Chinese vessels; the agency had previous published a similar guide to the NSR.

In making these announcements, Beijing sought to sidestep the question of the NWP’s legal status, with the Chinese Foreign Ministry stating shortly after the release of the shipping guide that ‘China noted that Canada considers this route as internal waters, while some countries believe it was open for international navigation’, and that ‘the Chinese side will make appropriate decisions by taking into account various factors.’

Although no official timetable has been announced for Chinese vessels to begin using the NWP, considering the growing number of Chinese cargo vessels which have operated in the NSR in 2017, it is likely that plans for a NWP transit are being put together for the near term. China’s sole operational icebreaker, the Xuelong (Snow Dragon), did transit the Northwest Passage in the late summer of 2017, (after contacting the Canadian authorities), for the first time. However, the possibility of future cargo shipping by China, and potentially other countries, via the NWP throws open not only the question of sovereignty and jurisdiction but also safety and monitoring concerns.

Unlike the NSR, which has seen a flurry of Russian activity of late, including new potential ports and railways, military facilities and the Yamal liquefied natural gas project in Siberia which formally began operations this month with Chinese support, infrastructure in the Canadian north remains comparatively underdeveloped. This year did see the opening of the Inuvik-Tuktoyaktuk Highway which will greatly improve overland transit between the Canadian Arctic and other parts of the country.

Pearson Building, Global Affairs Canada, Ottawa (Photo by M. Lanteigne)

However, other issues such as the isolation of the northern community of Churchill, Manitoba after the town’s single rail line was cut during flooding in mid-2017, illustrate the problems still facing far northern infrastructure in Canada, (this week, goods, including Christmas toys, reached Churchill successfully via a new ice road). The greater issue of monitoring civilian vessels when cargo shipping and tourism, (such as cruise liners), in the NWP becomes more commonplace, as well as protecting Canadian sovereignty in the Arctic, will likely factor considerably into Ottawa’s plans for an Arctic Policy Framework, detailing Canadian priorities in the region to 2030, to be released next year.

[The editor wishes to thank Mingming Shi for her assistance with the writing of this post.]

On Greenland’s Political Future: State or Wait?

Greenland flag in Nuuk (Photo by Mingming Shi)

This month, it was reported that Inuit populations in northern Canada and Greenland were seeking to assume greater control over the waters which separate Nunavut’s Baffin and Ellesmere Islands on two sides and Greenland on the other. This was in response to a report released in November this year by the Pikialasorsuaq Commission of the Inuit Circumpolar Council which called for a protected area in the environmentally delicate waterway, as well as the return of free movement between the islands for Inuit populations in the region.

The document, entitled ‘People of the Ice Bridge: The Future of Pikilalasorsuaq’, advocated greater control of the region known locally in the Western Greenlandic language as Pikialasorsuaq (‘Great Upwelling’), by local peoples, given the distinct and fragile ecosystem of the polynya, meaning an area of open water enclosed by sea ice. Such an initiative would require the consent of the governments of Greenland and Canada, but also Denmark since Greenland is part of the Danish Kingdom. Regardless of the outcome of these negotiations, the initiative offers another potential challenge to the complex political relationship between Denmark and Greenland, at a time when the Arctic begins to open up to greater economic activity, and Greenland itself draws global attention for its fossil fuel and resource potential.

In June 2009, Greenland achieved self-rule from Denmark, twenty years after ‘home rule’, the right of the island to establish its own elected assembly, was granted as part of the process of allowing for increased local governance for the island. As per the 2009 Self-Government Act [pdf], Denmark retained the right to determine policy in the areas of Greenland’s defence and foreign policy, in conjunction with the Government of Greenland (Naalakkersuisut), while most other portfolios were transferred to the Greenlandic parliament in Nuuk. Chapter VIII of the Act outlines the rights and responsibilities of Greenland should the results of a referendum indicate a preference by the Greenlandic people for outright independence. For decades, however, such an outcome was widely viewed as unlikely due to the country’s remote location and small population, as well as what was seen at the time as the island’s limited economic potential.

Although Greenland’s territory is considerable, measuring 2,166,000km2, (slightly larger than Saudi Arabia), its small population would likely result in an independent Greenland being, at least nominally, classified as a ‘microstate’ or ‘ministate’ using some conventional measurements, (i.e. possessing a population of less than five hundred thousand), thus adding to the international relations debate over ‘how small is too small’ for a state to function as an independent political entity, while still maintaining a threshold degree of sovereignty and security.

Display at the Greenland National Museum / Nunatta katersugaasivia allagaateqarfialu (Photo by M. Lanteigne)

Greenland’s small population (about 57,000) has often been perceived as one major barrier to independence, as an independent Greenland would inevitably fall into the category of a ‘small power’, defined as a state which would require outside assistance to maintain its security, that would have a very limited margin for error in its external policymaking, and which would accept the fact that its low level of power was basically unalterable. However, there are states more sparsely populated than Greenland, with the smallest being Vatican City (with a population of approximately of 850 persons). Other examples include small island states like Nauru (9500) and Tuvalu (10,000) and European ministates such as Monaco (30,500) and San Marino (32,700).

Economically, Greenland is also bound to Denmark, as in addition to the Greenlandic seafood industry, the other major contributor to the island’s economy is an annual grant from Copenhagen, valued at approximately 3.2 billion Danish kroner (US$510 billion). Therefore, before taking any steps towards independence, Greenland would have to consider the impact of a reduction or complete loss of that substantial revenue.

Despite these concerns, however, the debate about Greenland sovereignty, and perhaps even independence, has persisted. The primary reason for this is the evolving geographic and climatic conditions on the island resulting from Arctic climate change and ice erosion. Greenland has been greatly affected by the changed environmental conditions in the region, including the steady melting of its vast central ice sheet (Sermersuaq) revealing lands, formerly inaccessible, which may become suitable for mining projects. The abundance and diversity of base and precious metals in Greenland includes copper, gold, platinum, titanium and zinc, as well as uranium and rare earth elements or REEs. The mineral wealth on the island has caught the attention of many states which rely heavily on such raw materials for economic growth and development.

Mining projects in Greenland are functioning to varying degrees. Leading the way has been a ruby mine which officially began operations in May 2017 at Aappaluttoq, about 155 kilometres south of Nuuk. The facilities, owned by the Norwegian firm LNS Greenland A/S, assumed the administration of the site after the operation’s previous owner, Canada’s True North Gems, was unable to accumulate enough startup funding to commence operations. In January 2015 a Hong Kong firm, General Nice (Junan Jituan 俊安集团) assumed the oversight of a potential iron mine at Isua from a British firm, although it remains unclear when actual extraction might begin.

Garnering even more attention has been an REE mining project announced for the Kvanefjeld region, operated by Australia’s Greenland Minerals and Energy in partnership with China’s Shenghe Resources Holding Co. (Shenghe ziyuan konggu gufen youxian gongsi 盛和资源控股股份有限公司) based in Taiyuan, Shanxi Province. Even before that project began to take shape, it courted political controversy in 2013 when the possibility of the Kvanefjeld site also producing uranium led to the Greenland government removing a ban on uranium extraction, touching off a legal and jurisdictional dispute with the Danish government which was only settled in May of last year. As well, plans have been made for potential zinc mining at Citronen in northern Greenland by Australian firm Ironbark, in conjunction with China Nonferrous Metal Mining Group (Zhongguo youse kuangye jituan youxian gongsi 中国有色矿业集团有限公司).

There is also the possibility that climate change may open the door to fossil fuel (oil and gas) development in waters off Greenland, which would further affect the traditional economy of the island and bolster the case for eventual independence from Denmark, with a timetable far shorter than what would have been feasible before these geographical changes began to emerge. In late October of this year it was announced by the Greenland government that areas of fossil fuel exploration off of the island’s west coast would be made available to investors. It has been estimated that approximately 17 billion barrels of oil equivalent may be found in that region, while areas of Greenland’s east coast may contain as much as 32 billion barrels.

nuuk snowbank
Nuuk, Greenland (Photo by Mingming Shi)

There remains, however, a great deal of debate about how long it would take for mining and energy to bring appreciable income to Greenland and whether the economic benefits would be sufficient to push the island towards full independence given other economic and socio-political factors. As well, ongoing low energy and commodity prices have dampened enthusiasm for some large-scale projects in the Arctic region, at least until prices recover to a certain level.

Thus, the question of Greenland’s future political status is directly linked both to its ability to collect and retain a threshold amount of economic security to allow for greater sovereignty, as well as to the greater social-economic and environmental impact of these projects on the island. Should commodity prices increase, there is also the question of how the island would withstand a potential resource boom and concerns about ‘Dutch disease’ causing more economic hardships and benefits. The debate over Greenland independence has been muted over the past few years, but is far from absent.

[The editor would like to thank Mingming Shi for her assistance with this post.]

Hyvää Syntymäpäivää!* Finland’s Centenary and the Arctic

(Photo by Marc Lanteigne)

6 December marked the hundredth anniversary of the independence of Finland (Suomi) from what was then the nascent Russian Soviet Federative Socialist Republic (RSFSR). Since that time the country has sought to carve out a distinct identity with, on one side, the Nordic region and on the other, greater Europe and the Soviet Union / Russian Federation. Since Finland is very much an Arctic state, it has endeavoured to make its own mark on far northern affairs, including as a founding member of the Arctic Council and chairing that organisation in 2000-02 and again from May 2017 until 2019.

Upon assuming the chair position in the Council, the Finnish government announced that its priorities [pdf] for the region would be furthering environmental protection in the region in a nod to the 2015 Paris climate agreement, promoting connectivity and the development of greater information-sharing in the far north via telecommunications and broadband. For example, in October talks began to potentially establish a communications network through the Arctic to Northeast Asia via Norway and Russia/Siberia, with the support of China and Japan [pdf].

Other priorities are improving educational opportunities in the Arctic, as well as a deeper study of the meteorological and oceanic changes in the region. During the first Arctic Council meeting led by Finland and held in Oulu, education along with pollution reduction in the region dominated much of the discussion. The follow-up event will take place in Kittilä in March of next year. The environmental situation in the Arctic and its connection with global climate issues was also a main theme of the Arctic Spirit Conference held in October in the northern Finnish city of Rovaniemi. During the keynote speech by Finnish Prime Minister Timo Soini, there was considerable emphasis on the intention to make the country an example of sustainable development and carbon neutrality while also promoting greater inclusiveness, including of Arctic peoples, in ongoing debates and policymaking.

As noted in the Finnish government’s 2013 white paper on Arctic policy, the country is in a distinct position to provide various areas of Arctic expertise, including in the areas of environmental affairs, climate study, sociology and development, Saami affairs, health and technology development. The country is also seeking to make its mark in Arctic engineering, as, for example in the area of the manufacture of icebreakers. China’s second icebreaker, and the first to be domestically built, is being constructed in conjunction with Finland’s Aker Technologies, and Finnish shipbuilding firms are also being considered by the United States to potentially build new icebreaking ships to replace their small and aging group of existing vessels.

Display at the Arctic Circle conference in Reykjavík, October 2017 (Photo by Marc Lanteigne)

There has also been much discussion, in regards to developing greater connectivity in the Arctic, to establishing improved transportation networks which could better connect Arctic communities and adjacent regions. The Finnish government has commenced plans to build an Arctic railway stretching approximately 526 kilometres between the Norwegian city of Kirkenes and Rovaniemi as part of a greater ‘Arctic Corridor’ transport network under consideration. While a survey of the project was confirmed by Helsinki in October of this year, there were also concerns raised about the potential environmental effects of the link, including its potential routing through reindeer habitats crucial to Saami communities in northern Finland.

There were hopes that this link could provide the region with greater trade opportunities with other parts of Europe as well as potentially Russia and even China. In July 2017, Finland’s Prime Minister Juha Sipila met with Chinese Premier Li Keqiang to discuss areas of cooperation, including in Arctic joint ventures. There was also the possibility that new Arctic transportation networks could be linked with Russian rail lines which would stretch all the way to northern China, thus adding another potential element to the ‘Ice Silk Road’ which Beijing has been promoting with Russia in recent months.

Statue of Alexander II in front of the Tuomiokirkko, Helsinki (Photo by Marc Lanteigne)

Other elements of Arctic diplomacy have been more problematic for Finland. Like the other Nordic states, Finland watched with great concern the Russian annexation of Crimea and the conflict in east Ukraine since 2014, and as a result the longstanding debate about NATO membership has again been revived in Finnish policy circles. Throughout the cold war, geographic realities, (Finland shares a 1340-kilometre border with Russia), meant that the Finnish government opted not to join NATO, unlike Nordic neighbours Iceland and Norway, Instead, the country pursued a balancing policy often referred to, (and not always fondly), as ‘Finlandisation’, aligning much of its foreign policy towards the interests of the then-USSR while stopping short of a formal alliance or joining the Moscow-dominated Warsaw Pact. Finland did however join the European Union in 1995 after a referendum the previous year, and entered the eurozone in 1999.

Moscow has been highly critical of any suggestion of Finnish NATO membership and public opinion in Finland remains generally against it. It was confirmed this October by President Sauli Niinisto that a referendum on NATO membership was a requirement before any decision to change the country’s current status could be made, but concerns about Russia’s military modernisation, including in the Arctic, have factored into the NATO debate, along similar lines as in Sweden, whose policy of neutrality has also been tested by Moscow’s military actions over the past few years.

Finland’s Arctic policies will continue to be unveiled over the next two years, and it is likely that as the country enters its second century, the Arctic will continue to dominate much political, economic and environmental debate.

(* Happy Birthday!)

Dealing with the Doughnut Hole: A Fishing Agreement for the Central Arctic

Reykjavík Harbour (Photo by Marc Lanteigne)

As the polar ice cap continues to melt at record levels during the summer months, the question of how potential fishing areas in the central Arctic Ocean (CAO) has been growing in urgency in recent years. Thus, many observers welcomed the news this week that an international agreement to regulate and restrict fishing in the region had been completed. The deal, agreed in Washington following six rounds of negotiations, specifically addresses the part of the Arctic known as the ‘doughnut hole’ since it lies outside of the territorial waters and exclusive economic zones (EEZs) of the Arctic littoral states. With the continuing erosion of the ice cap, this area comprising approximately 2.8 million square kilometres is becoming more accessible to ships. At present, an average of forty percent of the central Arctic is open water during summer months, especially in regions just north of Alaska and Siberia.

In July 2015, the governments of the five littoral states, Canada, Denmark (Faroe Islands/Greenland), Norway, Russia and the United States, signed an declaration [pdf] in Oslo to observe a de facto moratorium on commencing any central Arctic fishing until further study could be carried out on the potential environmental impact, while observing existing regulations in the Arctic including the UN Convention on the Law of the Sea (Unclos).

Despite worsening relations between the United States and Russia after the Ukraine crises, it was acknowledged that the Arctic governments needed to get ahead of this issue before conditions were such that commercial fishing in the Arctic could potentially become commonplace. It was the same concept followed by Washington and Moscow of ‘checking your politics at the door’ that allowed this expanded agreement to be concluded. As well, American support for the agreement is noteworthy given recent policies of the Trump government, which has embraced a more tepid approach to global environmental protection, including in the Arctic.

In addition to the five littoral states, the Washington agreement was signed by the governments of China, the European Union, Iceland, Japan and South Korea, all states which have extensive fishing interests which may expand into the Arctic in the future. The three Asian governments have increased their diplomatic and economic interests in the Arctic in recent years, and have considered the far north an area of opportunity for energy and shipping as well as fishing. Over the past two years the Northeast Asian states have also begun to coordinate their Arctic policies in response to the growing importance of the far north. Recently, China also announced that the Arctic, specifically the Northern Sea Route, would be incorporated into its rapidly-developing ‘Belt and Road’ trade route system. Fishing also remains the lifeblood of the Icelandic economy as well as an area of political sensitivity, as evidenced by a nine-week fishers’ strike earlier this year.

Representatives of Arctic indigenous peoples from Alaska, Canada and Russia also participated in the negotiations. In July 2014 that the Inuit Circumpolar Council called for a moratorium as part of the Kitigaaryuit Declaration [pdf] signed in Inuvik. Under the terms of the agreement, commercial fishing in the central Arctic is to be banned for sixteen years, with the pact subject to renewal in 2033, and then again every five years unless there is dissent or the legal conditions in the region change.

The agreement was a nod to a similar deal signed in October 2016 by twenty-six governments which created a marine protective area (MPA) spanning approximately 1.55 million square kilometres, (with 1.5 million square kilometres set aside as a no-fishing zone), in the Ross Sea region of Antarctica. However, the difference between that deal, which entered into effect on 1 December, and the one covering the CAO is that fishing in the Southern Ocean around Antarctica had taken place for decades, whereas the Washington agreement seeks to provide a healthy amount of breathing space in order to forestall a feared scramble for fish stocks in the Arctic. The agreement, should it be signed by all parties, would represent not only a giant step for environmental protection in the Arctic but also for preventive economic diplomacy in the region.

[Addendum (9 December): The Chair’s Statement from the Washington DC meeting can be read here [pdf].

Iceland’s New Government: Meet Me In the Middle

Pictures of Left-Green Movement leader, now Prime Minister, Katrin Jakobsdóttir at the VG offices in Akureyri, Iceland. (Photo by M. Lanteigne)

After a month of coalition negotiations following Iceland’s 28 October parliamentary election between two veterans of many previous governments, the centre-right Independence Party (Sjálfstæðisflokkurinn), or IP, and the Progressive Party (Framsóknarflokkurinn), and the Left-Green Movement (Vinstrihreyfingin – grænt framboð) or VG, a deal was struck this week. Katrín Jakobsdóttir [In Icelandic], leader of the Left-Greens, became Iceland’s twenty-eighth prime minister and the fourth since 2013.

After two previous (truncated) governments, many in the country are hoping the incoming administration, promoting an ambitious experiment in ‘grand coalition’-building rarely before seen in Iceland, will be more successful not only in bringing about political stability but also in addressing the myriad economic challenges the island state is facing.

At first glance this coalition may prove more durable than the previous one, which fell when one of the partners, Bright Future (Björt framtíð), left the scandal-ridden IP-led government in September, thus triggering the election a month later. However, there may remain some challenges to the incoming government, starting with the basic ideological differences between the three parties. One major policy chasm between the Left-Greens and their partners was the issue of tax policy. VG supported raising taxes on the most wealthy, while IP was of the opposite view. A compromise which was reportedly worked out included no change in the value-added tax (VAT) on tourists, and a modest rise in the capital gains tax in the country.

Not all members of the Left-Greens were satisfied with the coalition agreement and while two members of parliament, Rósa Björk Brynjólfsdóttir and Andrés Ingi Jónsson, voted against [in Icelandic] the agreement this week, this dissent was not an impediment to closing the deal. However, these no votes would mean that the new coalition holds only 33 of 63 seats. The two dissenting MPs subsequently stated that they would vote with the coalition on a case-by-case basis.

The three-party agreement [pdf] which was released this week covered a wide range of domestic and foreign policy priorities for the coalition. The document promised that ‘parties spanning the political spectrum from left to right intend to establish a new tone, concentrate their energies to key projects that will bring Iceland into the front rank and take steps that will make Iceland a good place to live for young and old alike.’

According to the power-sharing agreement, announced at a joint press conference during the morning of 30 November, IP will oversee the Ministries of Finance, Foreign Affairs, Justice and Fisheries, and VG will administer Health and (unsurprisingly) the Environment, with the Progressives receiving the Industry and Tourism portfolio, as well as Social Affairs, Education and Local Government / Transportation. The new Environment Minister will operate outside of parliament, as Guðmundur Ingi Guðbrandsson, who is the managing director of the Icelandic Environment Association (Landvernd), does not hold a seat.

Bjarni Benediktsson, outgoing prime minister and head of IP, becomes Minister for Finance and Economic Affairs, a position he previously held a year ago. Regarding policy platforms, environmental affairs were identified as a priority, as well as infrastructure development, reform of the Icelandic health care system, gender equality and LGBT rights, and improvements in the labour sector.

Such a left-right coalition has not been seen in Icelandic political circles since the ‘Renewal Government’ [In Icelandic] (Nýsköpunarstjórnin) period of 1944-7, when Iceland was dealing with the European post-war period while taking its first political steps as a fully independent state since breaking away from then-occupied Denmark in June 1944. However, closer to the present, the left-wing Social Democratic Alliance (Samfylkingin) did help support IP during the second (ill-fated) administration of Geir Haarde in 2007-9.

20130810_145322 2
Downtown Reykjavík. (Photo by M. Lanteigne)

Economically, the country is still faced with several challenges. Although the country’s economy is considered to be stabilising following an extended period of up-and-down swings since the banking crisis almost a decade ago, there are still questions about the future of Iceland’s burgeoning tourism industry and its effect on rising housing prices and rents. The number of tourists in Iceland was expected to exceed two million by the end of this year. There is also the reporting that Iceland will shortly remove the last of the currency controls which were placed on the Icelandic króna in the wake of the 2008 economic collapse; another sign that the economy is in improving health.

Relations with the European Union may also be less of a policy and economic complication with the new government, as all three parties have expressed scepticism about closer EU political ties and are against membership. However, as a report [pdf] released this week [Icelandic full version here, pdf] by the Icelandic Ministry of Foreign Affairs argued, the ongoing Brexit question will present specific economic challenges for Iceland in the near future, especially since the UK will also be leaving the European Economic Area (EEA), thus requiring some renegotiations including in labour transfers. Iceland has also expressed interest in a separate free trade agreement with Britain after the Brexit process is completed in early 2019.

The Arctic was also noted in the new government agreement, including the need to maintain the fight against climate change in the region. As Iceland prepares to assume position of chair of the Arctic Council in 2019, there was a call to work with that organisation to promote global efforts to preserve circumpolar and ocean ecosystems.

The incoming government has promised it would represent the great share of the interests of Icelanders, and one of its first challenges will be to assure the public that the divisions and troubles faced by its immediate predecessors will not be repeated.

(The author would like to thank Hjörtur J. Guðmundsson for his assistance with the researching of this post.)