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Prime Minister's opening address at the Well-being Economic Governments workshop in Edinburgh


Dear guests,

I am delighted to join you here today, along with First Minister Nicola Sturgeon. The Scottish Government has been a leading force in the Well-being Economy Governments project and on behalf of the Icelandic Government I would like to thank Sturgeon for the leadership and all of you for the work you are putting into this important project.

Fifty years have elapsed since Robert Kennedy rightly said that GDP measures everything except that which makes life worthwhile. Economics is nonetheless still centered on the measurable. We have built an economic model under which constant growth is not only essential, but also considered positive no matter how it is achieved and at what costs. This has led to increased social and economic inequality and an ever-escalating climate crisis. It has left us in a cycle of wasteful consumption where we need to produce in order to get by and we need to consume so that we can produce more.

The Well-being Economy Governments project differs from this thinking. It entails not only an analysis of the drawbacks of our current economic model, but also a commitment to building an alternative future, focusing on the wellbeing of current and future generations. Sustainability is at the heart of the wellbeing economy.

Recent works by scholars, academics and the OECD have been influential in reshaping the way we think about going beyond the GDP; we have seen diversity enter economic thought and increasing numbers of economists point out that economics aren’t a value free zone and economic decisions affect our society and our environment.

Iceland is doing well considering classical measurements for economic and social performance. With an annual average growth of more than 4%, unemployment is under 3%. Iceland also has the highest male employment rate in the world and in fact the female employment rate is higher than the employment rate of men in other European countries. Recent data from the OECD wellbeing database shows that Iceland’s wellbeing indicators point at a country that fares well overall, with many indicators above the average of the upper half of OECD countries, such as jobs and earnings, community, environment, life satisfaction and safety.

Yet, the global challenges of climate change and inequality are local in nature. Iceland is still a contributor to global warming, a course we intend to reverse by becoming carbon neutral by 2040. While income inequality is lower in Iceland than in any other OECD country, we have yet not managed to eliminate poverty. The 2008 banking collapse strained our welfare system and the surge in house prices has brought difficulties to many families, especially of lower incomes. There are challenges to be met in the Icelandic education system which holds the key to the well-being of future generations.

We are currently working on numerous projects that in the long term will ensure greater wellbeing in Iceland. My government is investing significantly in the social infrastructure – health care, welfare and education – ensuring our welfare system is prepared for both current and future challenges. Gender equality remains high on the political agenda in Iceland and was recently added to my portfolio as Prime Minister.

My government has put forward a new social housing plan in co-operation with the social partners to ensure housing for everybody. We have increased child benefits significantly, first and foremost for those parents with the lowest incomes, and we have announced our plans to extend shared parental leave from a total of nine months to twelve which will help fully bridge the gap between parental leave and universal childcare. All these factors will help families with children and contribute to the elimination of child poverty, which should not exist in our so-called developed countries.

We are currently executing an ambitious action plan to halt climate change, heading for carbon-neutrality at latest in 2040. The strategy consists of 34 initiatives, ranging from a carbon tax food security, to recovering wetlands to setting up a fund to support climate-friendly technologies and innovation. While Iceland has adopted renewable energy for electricity and heating, we still lag on clean energy for transport. Thus, we are starting our third renewable revolution in Iceland and we intend to ban the registrations of new vehicles that are driven by non-renewables by 2030. Carbon neutrality can actually bring us opportunities for increased well-being. Less consumption and a slower pace of life will help halt climate change while also increasing general well-being.

One of our big tasks is to work towards sustainable tourism. We need to find the balance between growth and protection, welcoming guests, while protecting nature to conserve the wellbeing of people. This is an area of important collaboration between Scotland and Iceland. In 2016, a memorandum of understanding was signed between VisitScotland and the Icelandic Tourist Board, leading to collaboration on areas such as quality development, tourist information provision, digitalisation and sustainability. I fully support a renewed agreement which is underway to continue sharing information and best practice in areas that can benefit both countries. Iceland is currently finalising a Tourism Impact Assessment, aiming to establish Iceland’s overall tourism carrying capacity. In future, the focus will narrow down to the regional level as well.

I also wanted to mention the importance of trust and confidence in government institutions. I have put forward proposals to the Icelandic Government to increase transparency and the right to information. Gradually this will hopefully increase confidence and trust which suffered badly since the 2008 crisis and has been affected by political scandals ever since.

Dear guests,
This September, the Icelandic government will host a symposium which is intended to serve as a platform for leaders of the Well-being Economy Governments (WEGo), to come together with leading international experts and academics to share experiences and policy proposals to foster inclusive growth. I very much hope first minister Sturgeon will be able to join us.

At this symposium, I hope to be able to share with you more about the work we are undertaking in Iceland to move towards wellbeing and sustainability. This will include the results of a government appointed working group, consisting of experts and members of parliament, that is tasked with creating indicators descriptive for prosperity and quality of life in Iceland. The indicators need to be multi-faceted and include economic, environmental and social factors. The criteria must be based on accepted methods and be comparable to other countries.

I would like to conclude by reiterating the Icelandic government’s, and my personal, commitment to the Wellbeing Economy Government project. I am deeply grateful for the efforts the Scottish Government has put into building up this project. The urgency of our current global challenges does not allow more time for the narrow, self-serving national interests that have been too dominant in this debate on the international level. I believe small governments can and have to lead the way. It is our duty to the planet, as well as to future generations.

Thank you

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