Ræða Sjávarútvegsráðherra í Vigo, 19. september 2003.

Vigo 19th. of September


Speech delivered by Árni M. Mathiesen, Minister of Fisheries in Iceland

Ladies and Gentlemen:

May I begin by expressing my pleasure and thanks to the Spanish-Icelandic Chamber of Commerce for the opportunity to address this business seminar here in Vigo, which has been arranged for the purpose of strengthening commercial connections between our nations.


Elections to the Icelandic parliament Althingi were held in May of this year, with their main result being that the government continued in office. What is perhaps most remarkable about the outcome is that the governing coalition parties, the Independence Party, of which I am a member, and the Progressive Party, are now commencing their third consecutive term in office. This has only once before occurred in Iceland, during the years 1959 to 1971. During the period the Independence and Progressive parties have been in power, extensive changes have taken place in Icelandic society; these two parties have practically revolutionised Icelandic society, not least with regard to the environment for business and industry. The state has step-by-step reduced its operations competing with private enterprise, the rules of the market economy have been simplified and made more transparent. Systematic efforts have been directed at lowering personal and corporate taxes. Corporate taxes, for instance, have been cut by almost half in recent years. We are convinced that actions of this sort encourage individual initiative, provide fertile soil for a dynamic industry and are each country's best defence against unemployment.

This does not mean, however, that good economic management in Iceland has enabled us to completely escape the economic downturn with which the global economy has been grappling since the burst of the dotcom bubble. Nonetheless, it is true that we have managed, without major economic fluctuations, to work our way out of the difficulties we faced when the period of contraction began. Unemployment rose temporarily; it is currently around 3%, after reaching a peak of 4% at the beginning of this year. Inflation, which has been a major threat in the past is now running at 2%. Unlike many other nations, we have managed, during this period to have the National Treasury return a sizeable surplus.

During the election campaign, the government and opposition parties debated various issues, as is only to be expected, and fisheries were no exception here. Generally speaking, the opposition parties emphasised the need to overturn the current system of fisheries management, while the governing parties placed their emphasis on further developing the current system. The fisheries management system is naturally undergoing continuous development, aimed at improving its performance, but basically for almost two decades we have managed our own fisheries through a catch quota system. There is no doubt that this arrangement of fisheries has proved its worth, and thus become a permanent institution, as it has been demonstrated that a system of individual transferable quotas, ITQs, is more effective than other systems which have been or could be considered. Any methods which can be applied to fisheries management have their shortcomings - whether they involve an overall arrangement, such as a quota share system, or more specific measures prescribed by regulations, such as rules on vessel size limitations, maximum engine capacity, etc. The decisive difference between ITQs and other arrangements in this policy field is that they enable vessel operators to improve their own business performance in accordance with the principles of the market economy. The ITQ systems thus have an economic advantage.

This is clearly evident in Iceland, since during the period in question fisheries performance has improved substantially. We anticipate that, in the coming years, fisheries will be in a position to pay higher levies to the public purse. Fisheries will thus finance an even greater portion of the costs arising directly from their activities and the general public will receive a visible portion of the rent returned by the utilisation of the country's fishery resources. In this connection it must be borne in mind that government subsidies to the fisheries sector are completely unknown in Iceland and we are completely opposed to this practice. We have emphasised this in international fora and I would like to repeat it here.

Despite all our efforts in Iceland to attempt to increase the biological conservation of fishing stocks and our own knowledge of the marine ecosystem, we have become ever more aware of just how far we have yet to go in this respect. It caught us completely unawares when the Icelandic Marine Research Institute (MRI) published its results in the spring of 2000, indicating that the Institute had overestimated the size of our most important stock, Icelandic cod, and that catches would have to be cut back substantially. The same results were obtained the following spring, at which time it appeared to the Institute's scientists that their previous over-assessment was even more erroneous than they had previously thought. The total allowable catch (TAC) was reduced in accordance with the catch rule developed to ensure maximum long-term stock yield. This was followed by a very vocal and widespread debate as to the Institute's credibility and the knowledge base from which it drew its conclusions and changes were maid as a resault of that debate.


Fortunately, all the current indications suggest that we are now again succeeding in building up our cod stock. The last tvo MRI report show a considerable improvement in the cod stock and the TAC proposed for the current fishing year is 209 thousand tonnes, or 30 thousand tonnes more than the previous year. The haddock stock has grown rapidly in size, and is currently at near peak condition in a historical perspective. Estimates of the blue whiting stock have never been higher and in fact most of Iceland's commercial fishing stocks are in a balanced situation or show a clear signs of improvement. It must be borne in mind, however, that the marine conditions have been changing very rapidly due to a sudden increase in ocean temperature. Such a change is not necessarily positive, because it can have various unforeseen consequences.

One of the things that all this has taught us is that to ensure the long-term sustainability of our fisheries we must have good scientific information on which to build our management. The scientific basis must not have a narrow focus that looks at each stock in isolation, but must take account of the complex interactions that occur within the marine ecosystem. We have already started managing some stocks on the basis of multi-species modelling, but there are many important interactions and predator-pray relationships that we must consider further. One of these is the relationship between whales and fish. As whales form an integral part of the marine ecosystem, closing our eyes to their role will lead us to draw wrong conclusions on the ecosystem's function. As our economy is overwhelmingly based on utilising marine resources, we simply cannot afford to stay ignorant about how whales interact with different fish stocks. Because of this, we started this year to implement a scientific research plan regarding minke whales. This year we will take 38 minke whales, out of a population of at least 43,000 in Icelandic coastal waters, and study among other things their food composition. The research we are conducting on minke whales should increase our understanding of their role in the marine ecosystem and thereby contribute to making sure our utilisation of marine resources is sustainable. Of course, sustainability is in itself an important environmental objective everywhere. Iceland is so dependent on fisheries that sustainability is for us also of critical importance for our continued economic well being.

Ladies and gentlemen!

Business between Spain and Iceland has been expanding in recent years and it is safe to say that Spain is an important export market for a country like Iceland. As I mentioned earlier, fisheries is the mainstay of the country's economy and thus by far the largest share of our exports to Spain are comprised of marine products, with cod leading the way by a long stretch. According to our information, bacalau de Islandia is a quality product here in Spain and you are very familiar with that product since you have been importing it for over 100 years. In Iceland we are very conscious of the importance of bacalau in our national production, and we often quote the words of the girl Salka Valka, a character in a novel by our Icelandic Nobel laureate, Halldór Laxness, who said "Life is salt cod". These simple words have always held a great deal of truth, ever since they were written some 70 years ago.

Icelanders import various products from Spain and unfortunately for Iceland the trade balance has been in Spain's favour in recent years. Tourism between the countries has been growing every year. Around 10% of the Icelandic nation travel to Spain yearly and travel from Spain to Iceland has been rising 20% per year for last five years. In view of how relatively limited in scope the trade between Iceland and Spain is, in fact, it should be the task of those of us here not only to encourage increased trade between the two countries, but in addition to diversify this trade so that our business connections will have a wider base in the future than has been the case up until now.

May I express my sincere wishes that business between the two countries may develop and flourish in the future.

I wish you all the best.