Saving Iceland

This article originally appeared in the June issue of the independent newsmagasine Róstur.

The Whitewash report, or “Investigative report of the Special Investigation Commission”  made by the Special Investigation Comission (SIC) on orders from Alþingi (The Icelandic Parliament) under the pretence of investigating “the prelude to and cause of the crash of the Icelandic banks and related events”, which also is the subtitle of the report, has been disected by the media and heavily discussed on public forums for the last couple of months. The major medias and other groups of interest have been busy covering it chapter by chapter, drawing out the main conclusions of each part into few sentances to make it easily accessable to their readers. But not all of the chapters are getting equal coverage. Most of the focus has been on selected chapters relating to indictable actions and negligence on behalf of government and bank officials in the run-up to the collapse, the processes of the privatisation policy, especially towards the banks, and the loan books and other financial documentation revealed by the report. In that way, the major medias and other public opinionmakers are, like always, backing up the authorities in their defence of the current political system. All coverage about the report is directed towards these few selected parts, scapegoating a few people from the pre-crash financial sector along with expendable and retired politicians to spare the rest. This has resulted in a black-out of all discussion about the most important and revealing parts of the report, namely the parts about the economic impact of the industrialisation policy. These will only be seen on sidecolumns and obscure blogsites, in most cases long after everybody stop paying attention. None of the major medias have taken a critical look at two of the most important points of this 2000 page monster, points which, at a press conference where the SIC presented their results to the public, were amongst the main focus of their presentation, but have been almost unheard of since that conference. Those points are the industrial and capitalist policies ruling Icelandic society.

Authorities Were the Problem

Much of the SIC report is used to explain to the reader the inner workings of the financial system and the supposed necessity of such institutions for the functioning of our civilisation. Through them, the (again) supposed importance of ruling authorities as a tool of restraint and regulation over such institutions is introduced, for, as the report claims, without such rule over them, these institutions would be able to do as they please without any regards for the consequences of their actions. Ironically, this is exactly what happened in Iceland in the autumn of 2008, spite, or even because of, the fact that the country had been run under exactly such a system throughout the last decades. Nowhere does the report look at the ruling system with critical, or even neutral, eyes. Instead it highlights some supposed qualities of it, ignores it´s faults and shifts all blame from it, to the afformentioned scapegoats. In that way personal greed becomes the culprit instead of a system critically faulted from the onset, tailor-made to be abused by human greed for the benefit of the elite few. The importance of constant economic growth for a stable society is also strongly highlighted, with a bleak and dark picture being painted of societies who must do without. Not a word is whispered about the ever expanding invasions into pristine areas and utter destruction of ecosystems all over the planet being one of the major consequences of such a policy. Economic growth is all important for the current system and therefore above all criticism.

The only politicians the report waves any accusations towards are the bosses of certain ministries and institutions, with all other parliament and staff members rendered void of all guilt. This raises some seriously uncomfortable questions about the process of the so-called democracy in Iceland. With no employee carrying any kind of responsibility for their work, or lack of such, they can´t be in charge of any decision making, as it involves huge responsibilities. Therefore, the directors of each ministry and governmental institution must unavoidably be in a position of dictatorship within each´s representive department. How else can the whole responsibility of that department lie solely on him or her alone? What about all the members of parliament who let things run so wildly out of control? How the SIC report concludes them free of any guilt is an amazingly bold assertment, but therein lies the true purpose of this whitewash-report; void the political system of any responsibility, pick out the most obvious and convenient scapegoats of the political and financial systems and crucify them in an effort to propitate the public and revive their faith in the system.

Sadly, this seems to have worked, judging from the responses to the media coverage about the report.

Heavy Industry & the Crash

Even though the Icelandic authorities totally botched their privatisation- and industrialisation policies, causing them to be costing local taxpayers astronomical amounts of money far into the unforeseeable furture, these policies, and their execution, get handled with delicate silk gloves wherever they get mentioned. The only direct critiques come in the form of careful speculations on which things could have been performed in a different and better way. Even though the blame for the overexpansion of the countries small and fragile financial system is layed almost exclusively at the feet of the enormous build-up projects of the industrialisation plan and their representatives, no judgements get passed on those policies or persons advocating them. Instead, the report only focuses on the methodology of the projects execution, stating that the sheer size of each project and the rapid rate of new projects, combined with a lack of response and equlibratory actions from the National Bank are the causes of the overexpansion, which in turn paved the way for the financial crash. Through reading the report it becomes quite clear that the main reasons for things going as bad as they went, lie in the reckless way these projects were executed, without any regards or thoughts being led to the long-term effects of them. The short term benefits, personal gains, elitism and nepotism were above all else.

Many decades were spent on preparing the authorities industrialisation plan. The report slightly touches on the subject of this policies origins and how it got driven forth by a small group of greedy individuals who were looking for monetary worth in each squaremeter of the land the saw at their disposal, regardless of it´s harmful impact on the nature or society at large. When this policy finally got put into action, with the resulting projects and financial expansion, none of the financial institutions made any counter-actions to limit the effects on the economy. Instead everybody tried to get their own little piece of the financial boom, with well known results.

According to the report, it was obvious from the onset which risks these projects would involve for the economic system, especially whereas many of the projects would have to be financed through foreign loans, loans which have mutated in size today because of the collapse of the Icelandic currency. The National Bank and other financial institutions had been warned repeatedly about the possible expansion-effect the projects would cause, with many actions having been proposed to them without any of them ever having been put into effect.
Even though the aluminum industry has created some jobs and increased export from Iceland, it doesn´t look like these projects will be paying off in the long run, amongst other things because the whole export income from aluminum doesn´t benefit the society. Instead, all profits go directly into the aluminum companies pockets, which then export them to sister companies abroad. We are dealing with global corporations with a bigger income and influence than most smaller nations, and they know their business. For tax reasons only, profits get exported and debts imported between countries to balance out the sheets, as in the case of Alcoa, actions which have cost the Icelandic community dearly.

While the medias and authorities quietly divert all attention away from these sections of the report, laber unions, the Icelandic Confederation of Labor and other industrial lobbyists are crying out to authorities to create even more industrial projects on the premisses that this is the only way to cut down unemployment and balance out the economy. The last inustrialisation binge brought the countries economy down to it´s knees and litterally enslaved the nation. If these same groups will have their way again, it´s only to be expected that the country will be left as smoldering ashes in the wake of their destructive greed. The silencing of the impact of the industrialisation-plan must be broken before it´s to late so that past mistakes can be avoided.