BY JIM ROGERS
 
Glaciers and Geysers: Iceland In-Depth

(Click here for more on Iceland: the Perfect Beginning by Paige Parker)

I've come away from Iceland more optimistic than I expected. It's a country in the midst of enormous change, change more striking than in most places, perhaps, because Iceland is awakening from a long isolated hibernation.

The historical combination of geographic isolation, colonial status, agricultural necessity, and a statist mentality imported from Scandinavia means that Iceland has come late to the modern world. But like many converted states, there is now a hurricane of change blowing through.

The economic mismanagement that ruined the economy in the 1980's coincided with rapid international exposure. Television and increased world travel and study abroad stripped bare the absurdity of old ways. Changes, which occurred slowly elsewhere, are galloping here.

Many of the decades-old collectivist institutions have already vanished. The government is privatizing at a rapid rate and trying to pay down an enormous international debt.

However, holdover problems remain. Agriculture is still heavily protected. Not only are there high tariffs on foodstuffs, but it is actually illegal to import certain products.

The results are to be expected: Basic necessities are so expensive that many people work two or three jobs to maintain their living standards. Paige and I stopped in a Pizza Hut for a snack for the experience as much as anything else. One medium pizza, two salads, two beers and a small garlic bread costs US $50.00. We were stunned. I dare not tell you the bills in fancy restaurants.

This absurdity will undoubtedly end in the foreseeable future. Fifty years ago, Iceland was a nation of farmers and fisherman. Reykjavik, Iceland's capital and largest urban center, held a small percentage of the population. Now, more than 40 percent of Icelanders live there and the greater Rekjyavik metropolitan area holds about 60 percent of the nation's inhabitants. Our drive around Iceland's perimeter revealed many abandoned farms. The farm vote is disappearing.

It will not be long before the nation realizes everyone would be better off if food prices came down to international levels. Producing food on a volcanic island near the Arctic Circle to protect fewer and fewer farmers, is a ludicrous extravagance for this nation. The high cost of living also makes the country less competitive internationally.

Fishing, while more powerful than farming, is also facing the new reality. Until now, the industry has been controlled by quotas ostensibly designed to prevent over fishing. In practice, however, these quotas only protect and enrich a lucky few. Restrictions preventing foreigners being involved in fishing insure a cozy sinecure for insiders. Fortunately, change will come here as well. Foreigners are noticing that Icelanders are investing abroad while keeping the home boats closed. The local citizenry is beginning to resent the unearned windfalls created by the quotas. The Icelandic supreme court has recently stirred the pot by changing the basic assumptions behind the quotas.

Then there's the energy sector, where Iceland is even better situated than Saudi Arabia. After all, the Saudis will some day run out of oil. And hydrocarbons may become less used for a variety of reasons. Iceland, however, has vast amounts of renewable energy in its geysers, natural steam, hot water, and streams -- all perpetual and virtually free after the initial investment to capture and harness the energy. Therein lies the problem. Iceland refuses to allow foreigners to invest in the industry (something hazy about "foreign domination" or "colonialism"). Few have yet noticed the policy means there will be little development of this lucrative resource. Kuwait became rich by allowing foreign investment to develop its energy without losing its independence. Iceland could too someday.

How do I know all this? The kids. Because Iceland is such a young country, the conversion process is being helped along with the enthusiasm and energy of youth. Well over half the population is under 30 and people under 50 occupy many significant positions. They are everywhere, perplexing their grandparents and their parents to no end. It's not just their flooding the streets and clubs of Reykjavik until all hours on weekends. Certainly there's that aspect, but these same kids are thirsty for a new world that will sweep away the vestiges of Iceland's anachronisms as they mature.

It's already happening in the areas inhabited by the young. Iceland requires all elementary students first to learn Danish, mainly for historic reasons, which previous generations rarely questioned and even endorsed when they were young. Not now. The kids hate it and see no reason for it. Their kids will learn English or Chinese or Spanish as their second language.

The young entrepreneurs in the new industries developing in Iceland are already suffering from the anachronisms left over from history. They are desperate for workers ready for the third millennium. Iceland's intellectual capital is growing faster than the society, the economy can provide for. Yet Iceland restricts foreign investment in its most important fields and even makes it difficult for foreigners to immigrate to Iceland. I doubt aspiring emigrants around the world have Iceland on their lists of potential destinations. Even if they did or even if they discovered the attractions of Iceland, they would be put off once they learned the difficulties of establishing roots.

There are a couple of generations questioning the old. There is now even a highly rated school of management headed by a 40-year-old Ivy League graduate. What is unusual is the school was only founded a decade ago by converting an old collectivist movement secondary school into a training ground for aspiring capitalists in their late 20's.

Some in Iceland worry about losing their traditional culture although I'm not sure this isn't often just a fear of change. The unique language is unlikely to suffer any time soon nor is the centuries old attachment to the Sagas everyone learns at the earliest ages.

The traditions of family and heritage are stronger in Iceland than nearly everywhere in the world. Everyone passionately keeps the family tree going back for centuries while the government has extensive ,decades old records of everyone's genetic background.

It's the perfect laboratory for the study of genetics, environment, and medicine that will insure we all eventually live longer. The local company deCode hopefully will change the world as it harnesses this extraordinary body of knowledge.

Then there are the bonfires and the fireworks. No country in the world celebrates the New Year as does Iceland, nor could any other country. New Year's Eve is marked with huge nationwide bonfires meant to eliminate the problems of the past year. Then, as midnight approaches, the entire sky in every town erupts with all the skyrockets and fireworks known to man. The entire town joins in, every house, every family, every block, all impressing each other. Imagine a city of 150,000 with the entire sky ablaze and you have Reykjavik on New Year's Eve. On clear nights you can even see the skies in towns 20, 30, 40, 50 kilometers away if you tire of Reykjavik's.

I can't leave Iceland without touching the environment, which is where most people begin because it is so extraordinary. We drove the Ring Road 1400 kilometers around the country in a never ending visual feast: volcanoes, lava and sand beaches, glaciers, geysers, streams, valleys, fjords, oceans, mountains, ancient lava flows, boiling sulfuric cauldrons, mysterious steam eruptions, farms, Icelandic horses, waterfalls. Paige kept exclaiming that angels had perfected the landscape. Put the top down or get out the motorcycle or just start driving; it's perfect winter or summer.

(By the way, we became the objects of constant media attention for being Americans doing this drive in January, especially after we were forced to turn back one day by a blizzard on top of a mountain.)

And, of course, the people: mainly of Viking and Irish stock (which means the largest percentage of brunettes of any Scandinavian country) in a rural country, they are terribly hardworking, little complaining, friendly, helpful and honest. All this in a country that is not particularly religious and where it is common and totally accepted for women to have their first child before marriage. No one was murdered in Iceland in 1998 and people leave their doors unlocked. We were startled to find no guards, alarms, attendants or even gates at the President's home. He allowed even us an audience.