The Icelandic government is facing continued opposition from the country’s fishing industry as it plans to revamp its 1984 fishing laws in an attempt to claw back control of the economy. Prime Minister Johanna Sigurdardottir wants to limit the amount that fishing quotas can be rented or sold and increase fees across the board.
However, fishing unions say the proposals will damage the industry, which has accounted for around of quarter of the north Atlantic island’s gross domestic product since the banking collapse of 2008. They claim many Icelandic companies will be put out of business, resulting in an overall negative effect on the economy.
Speaking in an interview with Business Week, fisheries and economy minister Steingrimur J Sigfusson said the government wants to, “once and for all clarify that the natural resources in the water surrounding the island are the communal property of the Icelandic people.” He added that they want to ensure that “quotas are utilisation rights which the fishing industry pays for, but not anyone’s private property.”
According to Fridrik J Arngrimsson, the chief executive officer of the Federation of Icelandic Fishing Vessel Owners, 70 percent of industry profit could be dissolved by the plans. “If the government’s ideas materialise, most of the island’s fishing companies will go bankrupt,” Arngrimsson told Business Week. “The ideas on the charges that should be levied on the industry are exorbitant.”
“We oppose these bills because they will increase political interference in the fishing sector by imposing rules that will result in a large share of the fishing quotas being controlled by politicians,” Arngrimsson added. “This will fundamentally change the current system and risk reducing the sector’s chances of continuing to contribute healthily to the gross domestic output.”
The two bills are currently being discussed in committees after being introduced to parliament in March by the government.
Not so. I’ve become more right wing with the years, but that statement is plainly untrue. If it was, there’d be no need to intervene to prevent (for example) chemical companies dumping in watercourses.
Not that I’m saying that you’re wrong in this case, just that the statement needs support. From what I’ve read here and on IWR, the structure of the fishing industry ensures a few feudal barons reap the rewards. If that wasn’t the case then I could see more merit for non-intervention now (although, of course, controls were needed in 2008/9).
Knowless
Capitalism works, the communistic principle you espouse do not. Over time Iceland’s economy will be damaged.
Are you suggesting that a fisherman doesn’t own his earned money? money earned as a % of the catch?
I certainly am not :)
I am not a mindreader but
Perhaps you are referring to those in the fishing industry that hold the fishing quota licenses. That those license holders should have unrestricted license to do what they want with the foreign currency earned from those fishing activities and also that freedom should apply to all foreign currency earned by all export activities in Iceland. Perhaps you are also a supporter of unrestricted fishing just because somebody own a fishing boat and a fishing net?
Instead of indulging in empty sloganeering, work it through to a conclusion. Just what would happen to the State economy, adversely affecting the vast majority of people, should foreign currency earned by all export activities be banked abroad, the supply of foreign currency to the CB be drastically reduced, the subsequent reduced availability of foreign currency to traders/importers/individuals and the rise in costs of living/inflation, should the CB have to purchase foreign currency at the rates determined by foreign banks?
But Peter it would appear you make the leap from a pointed discussion to retort with empty rhetoric.
If you have some coherent arguments about the foreign currency controls then please make them. Also please point out the failings of such currency controls which have been in place now for near 4 years and point out the benefits to the State should they have never have been put in place.
“The vast majority of those fishermen in their communities would face an equivalent increased cost of living, ”
The sign of a true Marxist- you believe your own bullshit.
The money from fishing belongs to the people, not those who earned it?
Peter London/Krakow says:
June 8, 2012 at 8:43 am
I completely agree with you here.
Isn’t it also the case that the capital controls penalize fishermen for the crimes/actions of the bankers? Fishermen could get much more if they could be paid in the real exchange rate rather than the controlled exchange rate.
Not really, if the fishing industry were allowed to bank their earning abroad and purchase IsKr from that foreign bank at the same rate of exchange the Iceland Central Bank offers for Euro bonds, it would mean that the cost of living for the Iceland people would increase by at least 20%. The vast majority of those fishermen in their communities would face an equivalent increased cost of living, increased loan repayments, wiping out any gain from a higher exchange rate that they received from a foreign bank.
And the rate of inflation would quickly snowball with negative effects immediately permeating every fabric of iceland society.
As long as Iceland has an independent currency, the currency controls directly benefit the majority of those involved in the fishing industry. Not only that, the currency controls directly benefit the vast majority of the Iceland people.
Fish are a resource of the state, the fishing industry is allowed to exploit that resource by virtue of a licence. That licence has restrictions imposed and responsibilities. State control over this vital natural resource is not just desirable, it is imperative and it is a proven imperative.
>More on quotas and politics from Iceland Weather Report:
Alda Sigmunds does get wrong end of the stick many times. This post is just one of those times.
” >and which handed out the quotas in the first place. ”
That’s just wrong and misleading as political connections had near zero to do with it ( see my first post for factualness ).
” > prevent the new quota bill from becoming a reality, thereby ensuring a more fair distribution of the wealth. ”
This quota owners do pay they taxes in Iceland. A lot of tax.
The reason this quota owners do have it now is because either they were there in 80s and 1990s having history of being competent ship owner ( mainly ) or they did * buy it * from previous owner who got it like that ( or from bank that did have it from collateral on a loan ).
Do not think for New York Minute that the new idea will not be more corrupt because minister and they appointees will decide who gets the quota. Current one is based on simple transfer of property by owner.
Yes it would be interesting to let non Icelander to buy quota. The foreign owners of Islandsbanki and Arion ( Kauthphing ) indirectly are profiting from this since they got the banks.
That is what the EU Commission will do over time if — unlikely as it is despite EU member application of this minority Red-Green coalition — we do leave EFTA to join the EU.
EU joining would not immediately mean our waters would be open to Spanish ships etc but it would happen within a few years of that as then EU rules on this ” common resources ” would come.
That is what Alda is saying she does want when she talks about joining the EU — for Icelandic fisheries that currently are not destroyed like majority of rest of Europe waters — to be destroyed by this idea of ” everyone becoming equal “.
Instead of all of ” society ” in Iceland — all people in Iceland getting they share of the fishing profits by the tax money that is taken from them and spent — on all Icelanders by our fine politicians and they appointees in Parliemnt. As happens now.
The current quota system is not corrupt. It is working OK for many years and just does need tweaks only — perhaps.
She is think soggy ! Not for first time.
>reward friends of whoever is in power, but then that’s probably what happened anyway with the initial allocation.
It was based on history of catch or just given equally based on number of vessels.
Advantage of the quota as transferable property now is that there is no politicians involved as is going to be if there is different licensing regime. Right now those that did get they quota had to buy it from some one else ( with small exceptions ).
http://www.unuftp.is/static/fellows/document/liu3.pdf
” … the initial allocation of quotas was all bound to the active fishing vessels—–only an owner of fishing vessel was entitled to get quotas; the historic landings of each vessel and fishing capital were the only considerations and entitlements were given free of charge ” p. 18
” Because the individual TAC-share is permanent and subsequently a fisherman has an interest in the future state of the fish stock, his enthusiasm to protect fish resources is increased. Because the ITQ system may be divisible and tradable and a new entrant has to obtain fishing rights through a quota market, fish will always be extracted by the most effective fishermen. ” p. 8
More on quotas and politics from Iceland Weather Report:
http://www.facebook.com/icelandweatherreport/posts/231318743652178
“Spoke like the true Marxist thinkers of the 1970s.”
I completely agree with you here.
Isn’t it also the case that the capital controls penalize fishermen for the crimes/actions of the bankers? Fishermen could get much more if they could be paid in the real exchange rate rather than the controlled exchange rate.
And yet it is surely wrong to allocate these quotas to people who then use them as collateral on loans that they use for purposes other than fishing.
Aside from that issue, surely if the idea is to ensure that the most efficient fishers get the quota, then that allocation process needs to be ongoing rather than a one-off? Presumably the danger with an ongoing process is that it can be used to reward friends of whoever is in power, but then that’s probably what happened anyway with the initial allocation.
” >in an attempt to claw back control of the economy. ”
> “once and for all clarify that the natural resources in the water surrounding the island are the communal property of the Icelandic people.”
Spoke like the true Marxist thinkers of the 1970s.
>He added that they want to ensure that “quotas are utilisation rights which the fishing industry pays for, but not anyone’s private property.”
Well having the payment of yearly licenses is one way to make the money but this firms are heavily taxed in Iceland already. In that way the Icelandix tax payer are already partners with fishing firms that do have quota.