Fishing can heal Icelands financial wounds

REYKJAVIK: The debt hurricane that tore across the Atlantic has devastated Iceland's banks, but down in Reykjavik port the fishermen say it is time for the country to turn back to the industry that kept the country alive for centuries.

Some even see fishing providing a lifesaving boost in exports as the country battles bankruptcy and licks the self-inflicted wounds caused by its once marauding banks.

Bjorn Gunnarsson, an agent for the Thorvaldur Jonsson Shipbroker company in Reykjavik, said he had seen no "negative impact" on the fishing industry from the financial crisis which has forced the government to nationalise the country's three biggest banks.

"Actually it will be probably quite the opposite because the exports are paid in euros and then when we convert into kronas, the fishermen will get a lot of money," Gunnarsson said.

Gunnarsson's company is just a stone's throw from the massive Reykjavik market where trawlers leave their fish to be sent out across the globe.

Gunnar Haraldsson, director of the Institute of Economic Studies at the University of Iceland, shares the optimistic outlook for an industry that is 90 percent geared towards exports and needs no state subsidies.

While's Iceland's population of about 320,000 consumes about 44 kilogrammes (98 pounds) of fish a year each, it is difficult to find cod in Reykjavik restaurants because so much is sent abroad.

Fishing and tourism are Iceland's best bet for the future, said Haraldsson.

With the collapse of the financial sector, that once weighed in at nine times the size of the country's gross domestic product, Icelandic media are already making calls for an increase in the country's fishing quota.

Holmjeirs Jonsson, a spokesman for the main association of small fishermen, said activity had not increased because there are strict rules on what fish and how much can be caught.

The catch has generally gone down in recent years. According to the most recent government statistics, in 2006, some 1.32 million tonnes of fish were caught by Icelandic fishermen, down from 1.98 tonnes in 2001 and 2.05 millions tonnes in 1996.

The psychological boost from the return to Iceland's traditional industry may be the most important effect for the workers in Reykjavik port who have seen their prestige overshadowed by the country's bankers and financiers in recent years.

In the 1930s, about a quarter of the working population was in the fishing industry. Now about three percent work as fishermen and another three percent are in the fish processing industry, according to government figures.

The finance industry overtook fishing as an employer in the early 2000s.

"Of course the financial crisis has affected everyone as individuals, but I think it will have a good influence because now Icelandic people realise it's not finance but industry which creates real value," said Gunnarsson, the shipping agent.

He said the fishing industry could provide jobs for people thrown up in the financial storm.

"Icelanders will probably see fishermen with less arrogance because they will offer jobs to thousands of people who lose their jobs," said Gunnarsson.