Iceland’s skills drain by Quentin Bates

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Iceland’s financial meltdown just had its fifth birthday and it’s worth taking a look back over the last few years to see what’s changed.

In 2008 I spent a lot of time in Iceland. In January it was business as usual, the place was buzzing with activity as usual. Then there were two visits in the summer and the vibe had changed subtly. There was a general unease. Everyone knew that things weren’t the way the should be. The banks had no money to lend. Everyone knew, but this information was whispered, nothing was said out loud.

Then there was October and the meltdown as it unfolded with the three main banks toppling off their perches one after the other. It was like watching a multi-car pile-up in slow motion.

Since then much has changed, and a lot of people have left. It was noticeable even before the Crash hit. As soon as the exchange rate began to slide in mid-2008, half the largely Eastern European immigrant labour that had done much of the heavy lifting departed for the Eurozone as those sending their money back home saw their home currencies becoming more expensive.

But since the Crash there has been an inexorable brain drain has been taking place. It’s most noticeable with the health service that has been extremely badly hit as doctors, nurses, anaesthetists and midwives have rapidly decamped to jobs in other Nordic countries where their skills are in demand and where their qualifications ensure significantly higher earnings than the now beleaguered Icelandic health service can offer. It has caused a crisis in healthcare in Iceland that has been a shock to the system. Icelanders had become used to first-class healthcare. Now there’s a shortage manpower that means waiting lists are getting longer and there’s ominous talk from the new government about charging patients for services, as well as employing doctors from abroad, which probably means from third world countries.

The fact is that earnings in Iceland have dropped dramatically, and it’s not just the medical people who are leaving. Engineers, architects, fishermen, truck drivers, plumbers and electricians are all part of an unprecedented skills drain, virtually all of them having been expensively educated and trained at state cost. Faced with rising costs, falling earnings and standards that aren’t what they are used to or were brought up to expect at home, the enterprising people are taking their skills and knowledge abroad with them.

There are whole fishing villages in Norway now where the processing plants and the boats are run by expatriate Icelanders. Trucks and diggers are driven by Icelanders who gave up looking for work at home; not to mention the shops, petrol stations, workshops, hospitals and old people’s homes that are staffed by Icelandic economic migrants.

This isn’t the first time that Icelanders have emigrated in large numbers. In the 19th century things were extraordinarily tough for those without land of their own and a great many people left the rural hardships facing them and went to Canada, where there is still a community of people of Icelandic descent. More recently, at the end of the 1960s, the herring collapsed. The vast Atlanto-Scandian herring stock that ranged across the North Atlantic, one of the world’s largest single concentrations of protein, suffered one of its periodic swings and declined. Whether this was due to years of heavy fishing or to climatic changes as sea temperatures dropped is open to debate, and it may well have been a combination of the two. But the result was that the silver of the sea migrated northwards and didn’t come back for almost thirty years, but which time many Icelanders found their way to new lives overseas and a good proportion didn’t come back.

It’s entirely understandable that these people are going, but it’s not necessarily easy to stomach, especially considering that the majority of them have been trained at state expense. It’s also remarkable that in the case of the health service in particular, so little is being done to keep these people who are state employees, while other areas of government business are not starved of cash in the same way that health is.

Those smart professionals left are necessarily those whose stock-in-trade means they work intimately with the Icelandic language, for which there is very little call anywhere outside Iceland. Lawyers and journalists especially are the ones who don’t find that their skills in demand in other countries. The same goes for the political class that many would argue are unemployable anyway, either at home or anywhere else.

So there’s a real possibility and a very unsettling prospect that with the smartest and best of Iceland’s brains scrambling for the exit doors, the cleverest people left in the country could be an unholy brew of journalists, lawyers and politicians.

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