Climate: temperate; moderated by North Atlantic current; mild, windy winters; damp, cool summers
Terrain: mostly plateau interspersed with mountain peaks, icefields; coast deeply indented by bays and fjords
Natural resources: fish, hydroelectric and geothermal power, diatomite
Population: 0.26 million (92% urban, 8% rural)
Life expectancy: 80 (female); 75 (male)
Infant mortality: 5 per 1,000 births
Literacy rate: 99% (female); 99% (male)
Ethnic divisions: homogeneous descendants of Norwegians and Celts
Principal religions: Evangelical Lutheran 96%, other Protestant and Roman Catholic 3%, none 1%
Principal languages: Icelandic; English
Rank of affluence among U.N. members: 8/183
Iceland sits in the North Atlantic just below the Arctic Circle. Independent only since 1944 (following 600 years of Norwegian and Danish rule), Iceland has had a series of relatively stable coalition governments. Its small population is almost entirely composed of people of Norwegian or Celtic ancestry, and the Icelandic language is very close to the Old Norse of a thousand years ago.
More than 1/3 of the country's 260,000 people live in the capital, Reykjavik, a clean, lively city that is home to much of the fishing fleet. Iceland meets almost all of its energy needs by tapping the heat of its 200 volcanoes and the flow of the rivers on their slopes. This geothermal energy helps provide Iceland with one of the world's highest standards of living, while maintaining some of the cleanest air.
Historically, this prosperity is fairly recent. Only in the 20th century has there been a sizeable commercial fishing industry, which has become the cornerstone of its thriving economy. Recently a national preoccupation has been protecting the fisheries. Extending territorial waters to a 200-mile limit provoked the "cod war" of 1975, in which Britain temporarily severed diplomatic relations.
Although mediation resolved the dispute, Iceland and its neighbors will now have to face a larger issue: overfishing. The same fisheries technology that accounts for 1/7th of Iceland's gross national product is wiping out the harvest, and the nation faces a sharp conflict between its long-term and short-term interests.
