Q: Do you think that Iceland has a perception problem after the crisis, and how would you like it to be seen and branded as an investment destination?
A: Maybe to some extent there is a perception problem but I think as time has gone by, and the world economic crisis and the European economic crisis evolved, people see it now from a different perspective. We are getting out of the crisis quicker than some other countries, although [our recession] went deeper and it had a bigger impact initially on us. Reputation is something that you earn, and so we have been actively also promoting Iceland as an investment destination. We have organisations such as the Invest in Iceland agency that does that, and what we are concerned about is to do our job well and to earn our reputation in that way.
Already we see a lot of interest from abroad in large and small projects, not only in the energy-intensive huge projects, although we have a few of them on the drawing board, but also in start-up companies. We see foreign investment into hi-tech start-up companies that are at their initial stages. We see a lot of interest in Iceland as a location for filming, both Hollywood pictures and from elsewhere, not to mention the growth in the tourism industry. So we see a lot of interest and we feel that we have experienced more positive feedback from abroad than negative.
Q: The capital controls that Iceland still has in effect are a big complaint among the business community. When can they be expected to be lifted?
A: We are working hard on lifting them. The minister of finance and economy has the task at the top of his pile on his desk, and we’ve heard some news about that. He’s forming [something akin to] a task force to deal with it… and hopefully we will see some developments on that later this year. But admittedly, this has been and continues to be the biggest problem.
We’re not used to capital controls, we’re used to being a free-market, open economy, and that’s what we want to be again sooner rather than later. But when it comes to new investments, we have an exemption from the capital controls, so that’s these projects that I’ve been mentioning. The investors don’t seem to be too concerned about the capital controls because they’re bringing in investments [for which capital controls do not apply]. We have exemptions for new investments, and that is very important to stress. We are trying hard, while we have to live with them, to make sure that it affects investments and business as little as possible, but of course the main goal is to lift them.
Q: What needs to happen in order to finally lift the capital controls?
A: It’s a complicated thing. It involves negotiating, or communicating with the creditors who have their investments locked in by the capital controls, and if it were easy, we would have done it before. We need to be careful. [The finance minister’s] main objective is to lift the controls without having ramifications that would hurt us. It’s like a Band-Aid. At some point, we just have to lift them and the work that we’re doing now is to prepare it so that the pain when we lift them will be short. And then I’m sure we would have to take it through the parliament, but some of it is in the hands of the government itself.