Photo credit: o paisson via Flickr/CC BY
Over the last few years, President Olafur Ragnar Grimsson has seen disasters both financial and environmental wrack his tiny island nation of Iceland. The Nordic country was at the center of the economic meltdown in 2007, when each of its three major banks collapsed. Since then, Iceland has made headlines when it nationalized its banks in response to the crash, when a massive volcanic eruption grounded airplanes around the world, and when it became the first nation to be powered by clean energy.
Needless to say, that's a hectic couple of years for a nation whose entire population is no larger than 400,000 people. President Grimsson discussed what can be learned from Iceland's example -- chiefly, the importance of putting markets before people and developing a clean energy economy -- in his rousing talk at Poptech 2011.
Grimmson gave an engrossing account of what has transpired in the years since Iceland's economy tanked in 2008. Iceland took a series of dramatic steps to head off the crisis -- most notably, by nationalizing its failing banks to prevent a total economic downward spiral. The ensuing recession nonetheless saw the nation shed jobs and enter tough times; tough times that persist today. Pretty familiar sounding narrative, no?
Another notable feature of Iceland's tale that should resonate today is the series of unrelenting protests that guided policymakers through the decision-making process -- every day, swarms of Icelandic youth and the afflicted middle class protested outside the capital building. Grimsson notes that it eventually turned into a full-time "assembly". These protesters pushed leaders to democratize the reform process, and to penalize the banks who made bad decisions, as opposed to the people who merely kept their money with them.
Photo: Poptech via Flickr/CC BY
"I chose the democratic will of the people over the force of the market," Grimmson said. In other words, the irresponsible bankers, who the Iceland Finance Minister even compared to Enron, lost their jobs -- not middle class workers. Clearly, Occupy Wall Street sympathizers will find this brand of leadership inspiring.
But there's another aspect of the story that should intrigue the green-inclined. Iceland, Grimsson says, is now powered entirely by clean energy. And that has led to post-crisis investment that has helped Iceland weather -- and begin to emerge from -- its recession.
"If you have built up a clean energy economy, it will help you get out of financial crises in the future," Grimsson said. Having reliable sources of clean energy helps protect a struggling economy from price fluctuations in the cost of fossil fuels, for one.
Beyond that, a clean energy economy readily attracts heavy investment -- Grimmson noted that companies from around the world are seeking to build data centers in Iceland, because they'll be powered by clean energy. The forward-looking nature of Iceland's ventures have since attracted ample investment from places like China. According to Grimsson, previous investment in renewable energy helped the nation bounce back much faster than it would have otherwise.
Grimsson's presentation received a standing ovation, and easily secured a nomination for the best talk of the conference. Attendees took to Twitter to wonder if Grimsson might have been born on a U.S. Navy base on Iceland -- and therefore eligible to run for political office in the United States.