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Full Lenght | Abstract





Employing IT to Develop Deliberative Democracy

Sep 2006
















Good day reader!

First, for those who are not familiar with recent events in Iceland, I have quoted newspaper articles and provided a few links with the intention to summarize the situation. The summary of recent events is available at the bottom. The public of Iceland is most concerned with recent 'over heating' of its economy, its lack of political decision-making power, and preserving the environment. Some understanding of the situation is integral as those are the grounds upon which the author reasons what it ought to be.

The purpose of this paper is to eradicate problems that persist solely due to the parliamentary democratic (PmD) organization and its consequences. Author will advocate the transformation to deliberative democracy (DD). This transformation would mark a milestone in the progression of political-democracy toward the social ideal of democracy. John Dewey, one of America's most influential thinkers, believed that "when the machine age has thus perfected its machinery it will be a means of life and not its despotic master. Democracy will come into its own..." He argued that "democracy will have its consummation when free social inquiry is indissolubly wedded to the art of full and moving communication (184)." Provided the lack of recognition in the academic community, the author employs Dewey's logic in "The Public and its Problems" (1927) both to ground it concretely and to take advantage of Dewey's heavy influence to put weight on the argument. Provided Iceland's current conditions and the ability of its public, we are faced with the unique opportunity to develop a solution to Dewey's 'problem of the public' and develop the 'conditions under which the great society may become the great community (147).'

After reasoning the political transformation, the author will expand on the information dissemination system that essentially enables the progression. The system is called 'Substratum' and is designed to serve and protect intellectual property, its function is to disseminate the public's information needs and wants. However, since it's impossible to understand all of the consequences following our initial transformation, Substratum is merely a speculation - the particular means of the system's utilization are up to the public and future limitations.
















THE TRANSFORMATION FROM REPRESENTATIVE DEMOCRACY --> DELIBERATIVE DEMOCRACY

When the great philosophers of our past imagined what would be the ideal national administration, they were faced with a series of conditional constraints or obstructions. Without any constraints they used the language of 'equal rights to all' and 'rule of intellect.' Ideals are often realized in theory, but fail to apply as intended in practice. There's a distinction between democracy as a social idea and political democracy as a form of government. 'The idea has influenced the concrete political movement, but has not caused it (144).'

There were several obstructions on the road of practical realization. First, it would have taken much too long to ask the opinion of all citizens; not to mention how few of those citizens could read and write; very few possessed the ability and knowledge needed to participate in, and/or make, political decisions; on top of all of these obstructions was the cost of such an effort; and last, but not least, if history tells us anything, it's that those who possess power and control are unwilling to give any of it away.

As a solution to these, and many other, obstructions, democracies have developed and adopted representative democracy. Representative democracy is necessary to a certain extent, but as it persists today, it enforces the discrimination of two distinct classes of people under the state - the politicians on one hand and the citizens on the other. Politicians tangle the illusion of freedom in front of us citizens and drag us where ever they please. Also, "in the degree in which they become a specialized class, they are shut off from knowledge of the needs which they are supposed to serve (206)."

On this issue, Dewey adds: "Rarely can a person sink himself in his political function; the best which most men attain to is the domination by the public weal of their other desires. What is meant by 'representative' government is that the public is definitely organized with the intent to secure this dominance (76)." And that "the essential problem of government thus reduces itself to this: what arrangements will prevent rulers from advancing their own interests at the expense of the ruled? Or, in positive terms, by what political means shall the interests of the governors be identified with those of the governed (93)?"

Essentially, the citizen's decision-making power is limited to a choice of two, or more, evils from the class of politicians. The citizens elect decision-makers. 'Just vote for a ticket of men mostly unknown to them (118).' The relationship presupposes that the citizens employ politicians, but then, due to the organization of (PmD), the employee assumes control of the nation - the 'citizens' as a collective. Politicians are able to do this because of their monopolization of decision-making power. Moreover, the relationship between politicians and citizens must be reexamined because this class distinction is vulnerable to corruption and inappropriate relations between financial investors and politicians.

Here lets interject Rousseau's articulation, "Social Contract" (III, XV): "The cooling off of patriotism, the activity of private interest, the largeness of states, conquests, the abuse of government: these have suggested the route of using deputies or representatives of the people in the nation's assemblies. It is what in certain countries is called the third estate... The English people believes itself to be free. It is greatly mistaken: it is free only during the election of the members of parliament. Once they are elected, the populace is enslaved; it is nothing... As for you modern peoples, you do not have slaves, but you yourselves are slaves."

Dewey said that "the prime difficulty is that of discovering the means by which a scattered, mobile and manifold public may so recognize itself as to define and express its interests." He said that "this discovery is necessarily precedent to any fundamental change in the machinery (146)." Moreover, "the essential need,.., is the improvement of the methods and conditions of debate, discussion and persuasion (208)." All subsequent quotations are credited to Dewey.

I don't mean to attack the performance of the Icelandic government, a recent survey suggested that Iceland, as well as Finland, had 'the least corrupt' governments. However, the public of Iceland have a unique opportunity to develop a participatory form of government that will secures better methods and machinery as means to eradicate the problems due to institutionalized organization. Dewey claims that Rousseau had indicated "the only possible solution: the perfecting of the means and ways of communication of meaning so that genuinely shared interest in the consequences of interdependent activities inform desire of effort and thereby direct action (155)." In a word, the key is communication.

For an example of other democratic forms, consider Switcherland's direct democracy, it has been a stable and progressive democracy for over 100 years. Direct Democracy (DD) comprises of a form of democracy and a theory of civics wherein all citizens can directly participate in the political decision-making process -- both legislative and executive. At any point citizens have the right to pass laws, veto laws, and also withdraw their support of representatives. (DD) is characterized by the three pillars:

Initiative, Referendum and Recall

DD in Switcherland ensures legitimacy of any citizen-made law with a 'double majority' requirement. "This legitimacy-rich approach to national citizen lawmaking has been very successful (Kobach, 1993)." Kobach (1993) argues that Switcherland has been successful both socially and economically, their success can be matched by few other nations. At the end of his book, Kobach states that "too often, observers deem Switzerland an oddity among political systems. It is more appropriate," he says, "to regard it as a pioneer."

In order to balance the argument, there are four objections the author foresees conservatives having to the aforementioned transformation. 1) (DD) might be criticized for being open to demagoguery; 2) people may question whether (DD) is practical and/or efficient enough; 3) most of those who will argue against (DD), will claim that it results in public apathy and voter fatigue - claim voter incompetence; 4) others might be concerned with the possibility of mob rule, or majoritarianism. This makes for four objections that need to be dispelled.

1. Demagoguery: impassioned appeals to the prejudices and emotions of the populace. A multi-party system, which prevails in Iceland, can avoid demagoguery if the process calls for rhetorical approval of all parties before questioning the citizens.

Most people are driven by their passions and not their light of reason. Therefore, in order to tame our passions, let reason structure the framework of rules and laws. Make it so that passion and majoritarianism are unable to carry the nation into a huge deficit or disorder. John Dewey said that "the influence of habit is decisive because all distinctively human action has to be learned, and the very heart, blood and sinews of learning is creation of habitudes... Thinking itself becomes habitual along certain lines a specialized occupation (160)." Habits are not the problem, they are an interdependent factor of society.

In any case, reason would have me believe that parlimentary democracy is just as, if not more, vulnerable to demagoguery because of the number of people needed to be fooled/manipulated/controlled. With the idea of 'equal rights' out the window, you would think that we could at least aim for the 'rule of intellect.' Which suggests that, if we remain supportive of the current form of representative democracy, then we must all hold dear the belief in concentration of smart people, of all the brilliant intellects of our society, in the field of politics - i.e. George Bush. Is this so?

It was a problem in the 1920's and it is a problem today - it's a problem with the system. If, however, we progress to deliberative democracy, then we will certainly be able to tap into the collective intellect of the 'great community,' including education - the instructors of society.

Gutman once said that: "Deliberative decision making and accountability presuppose a citizenry whose education prepares them to deliberate, and to evaluate the results of the deliberations of their representatives. A primary aim of publicly mandated schooling is therefore to cultivate the skills and virtues of deliberation (Gutman 1999, p xiii).
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2. (DD) is practical and efficient enough. Not all nations are able to make this transformation just yet. However, there are a few nations that possess the necessary ability and conditions. The implementation refers to Iceland. Iceland's situation, technical ability and family-like association in a homogeneous country, serves as a favorable landscape to develop a form of participatory democracy.

Iceland had the highest percentage of broadband users in 2005. In 2007 99.9% of the citizens will be able to link up to a broadband connection, including a few of the most advanced fiber optic networks in the world. 99.9% can read and write, and a large percentage of people shows interest in politics. More than 90% of Icelanders own a cellphone and do their taxes online (digital). Icelanders have more cars per/cap than any other nation. In a word, the public of Iceland leads the world in communication.

Iceland must develop some sort of system that mediates and disseminates information. By utilizing the broadband and fiber optic networks, available to all citizens 2007, Icelanders can make (PpD) practical and efficient in use. An information network of this sort seems inevitable. Therefore, it's no longer a question of whether (PpD) in Iceland would be practical and efficient enough, but rather a question of how to develop it to be the most practical and efficient. For example, later in this paper, the author defines an information system called "Substratum."
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3. Public apathy and voter fatigue, in short, a question of voters competence to assume the extra responsibility of political decision-making. It's the favored response from politicians - claiming, that the citizens are incompetent. I'm not! Are you going to succumb to this ridicule?? In (PmD), the citizen's access to political decisions is not denied on the grounds of her individual lack of political competence, but because she belongs to that class of people who can be labeled as mere 'citizen,' thus dismissed. Politicians are in a place of institutionalized categorical inequality.

Dewey says that "political parties may rule, but they do not govern (121)." Furthermore, "the significant thing is that familiarity has bred indifference if not content. Indifference is the evidence of current apathy, and apathy is testimony to the fact that the public is so bewildered that it cannot find itself (122)."

For example, in January 2005, a survey reveled that 84% of Icelanders never wanted to support the war in Iraq and demanded to be withdrawn from the coalition. The public was never asked for an opinion, the prime minister at the time, David Oddsson, spoke down to the people and said that we were incompetent to make that decision. (PmD) supports this class distinction and monopolization of decision-making power, but let's not forget who's supposed to be the employee in this relationship.

If politicians question the public's ability to vote on particular political decisions, then how can those politicians justify the public's ability to vote on a ticket of people to make those very same political decision?? So, under what circumstances are politicians able to, or required to, represent and treat citizens as incompetent outsiders?? Do YOU agree to that, unlike all politicians, you, and/or the majority of 'citizens' don't possess these qualities??:

-Sense of Responsibility
-Knowledge of Laws
-Knowledge of Justice and Equality
-Far-sightedness
-Sense for Common Good
-Education
-Culture
-Sound Judgement
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4. One of the means employed to prevent our administration from plummeting into majoritarianism, or mob rule, is the 'double majority' requirement -- it ensures the legitimacy of any citizen-made law. A double majority is the name given to a vote which requires a majority of votes according to two separate criteria. The mechanism is usually used to require strong support for any measure considered to be of great importance.

Also, through an information system such as "Substratum," we are able to establish a direct connection between politicians and citizens. Today, much of the necessary information dissemination is through the media and we all understand that any communication is more at risk to be distorted or abused when mediated through more entities. This problem, like the others, must be solved with the organization of information.

This suggests that (DD) would be less vulnerable to majoritarianism than (PmD). "Substratum" mediates and disseminates the information directly from politicians to citizens by means of journals, essays, question ares, and digital video. When the public is presented with a question, it should have access to a video and an essay from each, and every, political party. This information should reveal the stand taken by that particular party on that particular matter. The party's overall stand on previous elections can easily be computed and used to advance political science. The media can report the news based on these political reports. This method of information dissemination will make it much easier for the citizen to approach the necessary information, it also enables her to make a deliberated and a responsible decision on that particular matter.
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At this point, I hope to have dispelled these foreseen objections. However, I fear that the reader may misunderstand my definition of (DD) and take it to be nothing but an unrealistic dream wherein citizens would make all the decisions. But, note that we need to keep some form of representative democracy, I just want to secure some decision-making power for the citizen. Without it, the citizens have very limited, if any, control over their collective image, stance, and identity. They are eclipsed.

It would be in order to define which matters 'concern' the public and are therefore subject to its voting system. The definition must be worked out in detail, but this is not my intention here - the extensive details should be framed by the relative intellectuals. Let me paint a picture with broad brush strokes: the matters which 'concern' Icelanders as a whole; preservation of their unique environment; the choice of which energy source to harness; stance on international wars and non-barbaric diplomatic matters; means of contributing, supporting and assisting other nations; their representatives and administrators; distribution of natural resources; distribution of social wealth; etc.

'Everything for, Everything through the people.' In 1851, Johann J. Treichler, a Zürich radical, presented in his newspaper a critique of liberal 'representative democracy' and in a 19-point pro gramme demanded a transition to 'pure democracy'. He wanted for the greatest possible good to accrue to the people, through the people themselves, the full and entire rule ship of the people.

Johann truly was one of those who desired 'ideal democracy,' to be what he called 'pure.' But, in order for the administration to be efficient and practical, democracy requires some form of representation. Although this is necessary, no serious democracy should give politicians 'the full and entire rule ship of the people'! We must reexamine the relationship between citizens and politicians. We must bring power to the people!
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The importance of education, its reformation and adaptation, to this aforementioned transformation seems self-evident. One could write a whole book on the importance alone. As our society changes, so must the education that prepares the young for that particular society. Some sort of student participation in school administration is essential. Also, through Substratum, the schools would be empowered with the relevance of current events. With digital information resources, it should be easy to share quality educational material and applications. This was the original purpose of the internet...

"Every care would be taken to surround the young with the physical and social conditions which best conduce, as far as freed knowledge extends, to release of personal potentialities. The habits thus formed would have entrusted to them the meeting of future social requirements and the development of the future state of society. Then and then only would all social agencies that are available operate as resources in behalf of a better community life (200-1)."

The author works as a consultant for upublic. upublic is a broad-based consulting firm organized around a single passion: better education for all children through a comprehensive re-understanding of school design. For information on upublic visit:

www.upublic.net

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SUBSTRATUM

Iceland must develop some sort of system that mediates and disseminates information. By utilizing the broadband and fiber optic networks, available to all citizens 2007, Icelanders can make (DD) practical and efficient in use. Other possible developments include: elimination of paper bills and receipts all together; make all transactions digital; the filing of forms and general improvement to all communication technology would be tremendous.

Dewey said that "systemic and continuous inquiry into all the conditions which affect association and their dissemination in print is a precondition of the creation of a true public (218)." That "there is no limit to the liberal expansion and confirmation of limited personal intellectual endowment which may proceed from the flow of social intelligence when that circulates by word of mouth from one to another in the communications of the local community. That and that only gives reality to public opinion (219)." The leading nation in communication can do better than that, we can spell it out for you and each other by various means.

I mentioned briefly the importance of education in this process, it must be one of the initial phases of the societal integration. As for those who are not a part of the educational community, instruction should be provided indirectly via media and directly via conferences and broadband connections. The purpose of Substratum is to serve the public's information needs. Considering the imminent changes of the means by which we conduct transactions, the ATM's could be upgraded to support Substratum. Whereas the public may access Substratum from home, one can only cast a vote at one of these ATM's. The ATM's would also serve as a public upload station - to upload the information that has been stored on the phone. Substratum will organize the information in accordance with personal choice.

There are new generations of charging-methods and systems emerging all over the world. Too many hackers are able to make ill-use of the numbers punched on the cards. The next generation will 'communicate' with the register. In most cases, it will be integrated with our cellphone, it will allow us to receive digital receipts and keep all transaction information organized. The ability to store data opens another door of possibilities, such as: electronic prescriptions, emergency information, etc. The link below will show you the importance Microsoft places on the phone as a tool in the future.

Bill Gates's keynote speech Jan 2006 International Consumer Electronics Show.

The possibility which I found most intellectually challenging, was the elimination of loose currency - bills and coins. Icelanders could, and in this writers opinion should, develop an economy/society that doesn't use bills and coins -- make it all digital. Making all financial transactions digital would effect all facets of society in ways that are unprecedented in history, thus a pleasure to contemplate.

To others, perhaps, the interesting feature of this development is that it would eliminate the incentive responsible for almost all armed robberies. In most cases, the robber's incentive is to steal the cash. In recent years, robberies have been a growing problem in Iceland. This growth correlates with that of the 'black market.' I understand that the 'black market' is a broad definition, but much of it is influenced by the supply and demand of illegal substances.

To successfully break down this black market and reduce the violence, developing a cash-less economy can merely be the first step of three. The development will make drug dealer's trade off much worse, the 'pushers' must resort to new methods. In this case, that would involve bartering goods or digital transactions - which would leave a trace. The development would produce a unique opportunity that must be taken advantage of. The public has the opportunity to learn from previous mistakes and adopt conditions that will reduce both supply and demand of 'illegal drugs.' Once we adopt to new needs, the public must increase the support, in the short-run, provided to those who are compelled to use illegal substances. If we are to shut off supply, we must attend to those who demand.

As for the third and final step, we must de-criminalize cannabis. Cannabis, according to WHO Drug Report 2005, comprises about 80% of all illegal substances demanded. This step is essential, because, it would reduce the number of people who seek/demand, as well as the suppliers income, by 80% Keep in mind that the objective is to eradicate the 'black market.' The consequences of cannabis prohibition are much worse than the action that is prohibited.

It is rather easy to justify the de-criminalization. If, the incentive and justification for the prohibition, 'the war on drugs' at large, is that of protecting the ignorant individual, then, there must, necessarily, be a correlation between the damaging effects of the substances and their status held in laws. Moreover, if cannabis is 'less intoxic' than tobacco and/or alcohol (studies indicate so) then the discrimination within law violates several articles prescribed in the UNIVERSAL DECLARATION OF HUMAN RIGHTS - the 7th in particular.

Not only is the prohibition illegal itself, but its consequences on society are more severe than the prohibited drug could ever be. Author has argued how de-criminalization of cannabis would effect the supply of 'illegal drugs,' but not how it effects the demand. Today, the education offered to the young, as well as the laws which prescribe society's 'rules,' is not in correlation with scientific understanding. Once the young are exposed to the scientific information, they realize that it is not parallel to their educated understanding of these substances. This contradiction shatters any values of educated understanding, the young seek answers from peers (who wish to impress) and personal experimentation. Once cannabis has been de-criminalized, there will exist a clear distinction between legal and illegal drugs that will improve the education of their harmfulness.

Substratum will minimize the relevant cost for companies and individuals in Iceland. There's no cost of sustaining cash flow or security to protect it. Also, if the occasion arises, it would be easier for Iceland to adopt any other currency - i.e. Euro. Substratum has unlimited possibilities of connecting community and nation. "The Great Community, in the sense of free and full intercommunication, is conceivable." Dewey argued that this intercommunication was essential, because "family and neighborhood, with all their deficiencies, have always been the chief agencies of nurture, the means by which dispositions are stably formed and ideas acquired which laid hold on the roots of character (211)."

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To the proposed development of a cash-less economy, the author foresees four main objections. First of all, it's the cost and effort of the development. However, one must remember, there's price to all progression. It is better to control the transformation, as opposed to, being influenced by outsiders. Better to ride the avalanche, than to be unaware of its imminent influential force.

There's some number of people who depend on the income they receive 'under the table' - unregistered and void of taxes. Even though Substratum will benefit the public, these people will suffer some setback. Substratum, supposed to help eradicate the 'black market,' would make it a lot harder to pay employees under the table. These people would suffer less if we adopted the flat-tax system. Despite Substratum, the conditions of flat-tax system would suggest that fewer people depend on, and seek out, these illegal jobs.

Not all will support these various developments suggested. But most, if not all, of the aforementioned developments are inevitable. It's just a matter of being in control, or being controlled through the decisions of others. The definition of innovation is the departure from the customary. A new idea is unsettling and a departure from the temporal norm, but, don't you want to participate in, and be a part of, this revolution?

As for outsiders who wish to visit Iceland, there are only two ways to enter the country. These places could offer outsiders a 'tourist card.' This tourist card would function similar to how a debit card does today. Outsiders will be able to place their cash and checks on these cards - which will also enable greater security and monitoring. In any case, the outsiders should be able to use their own credit and/or debit card. Just no cash!
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John Dewey expanded upon the democratic educational philosophy of Plato and Rousseau. "It seemed almost self-evident to Plato - as to Rousseau later - that a genuine state could hardly be larger than the number of persons capable of personal acquaintance with one another (114)." It has been held that Plato overemphasized the importance of the state, whereas, to Rousseau, the state was never the master. Dewey, however, understood the importance of their association and interdependence, he said that "in fact, both words, individual and social, are hopelessly ambiguous, and the ambiguity will never cease as long as we think in terms of an antithesis (186)."

From this, Dewey placed primary importance on the community and 'face-to-face' communication. He said that democracy was 'the idea of community life itself (148).' Interestingly enough, it was Dewey's belief that technology would eventually provide 'free and full intercommunication' and, at that time, we'd be 'absorbed in a human age.' Hopefully, I've argued sufficiently the unique opportunity Icelanders have to develop 'The Great Community.'

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Links and Articles that summerize the 'situation' in Iceland

The Icelandic Parliament

The CIA factbook on Iceland...

"Iceland cools, raising worry of wider chill" By Heather Timmons International Herald Tribune (4.15.06)

"This tiny windswept island nation of 300,000 people has undergone one of the fastest, fizziest economic transformations in the world in recent years - one that is on par with the expansion enjoyed by many of the world's fastest-growing emerging markets."

"The local stock market, created in 1985, has been the best- performing Western market for four years in a row."

"But Iceland's ascent has hit a speed bump in the past several months. Concerned that the economy has overheated, or reacting to macroeconomic changes in other countries, some global investors, including hedge funds, have withdrawn money from Icelandic markets. This pullback has caused the main stock index, the ICEX15, to fall 18 percent, and the currency, the krona, to weaken."

"With a population on a par with a midsize city and a gross domestic product of around $10.3 billion, or just below that of Rwanda, Iceland would not seem to be on the radar screen of many financial experts. But analysts from Merrill Lynch, Danske Bank, Fitch, Standard & Poor's and Moody's Investors Service and economists around the world have weighed in, some expressing concern, others saying fears of an Icelandic meltdown are overblown."

"Like Wagner's music, the state of Iceland's economy is 'better than it sounds,' quipped Thordur Fridjonsson, chief executive of Iceland's stock exchange."

"None of Iceland's financial experts denies that the economy is headed for a slowdown, but they bristle at the notion that it could reach crisis level. They point to factors that make the country much less likely to succumb to a meltdown than others: The average age in Iceland is one of the lowest in the developed nations, but its massive pension funds are 120 percent of its gross domestic product, a higher ratio than in Norway, which built up one of the world's largest pension funds from its oil wealth."

"Iceland troubles overblown"

"Iceland tries to cool economy with rate rise"

May 18, 2006 08:11 PM ET

"Iceland's central bank raised its key interest rate sharply on Thursday in its latest bid to cool its overheating economy after a dramatic jump in inflation in the last few weeks.

It raised its policy interest rate by three quarters of a percentage point to 12.25 per cent, the highest level for at least 15 years, and the second consecutive 75 basis points increase since the end of March.

Icelandic inflation has surged from 4.5 per cent to 7.6 per cent since the end of March on the back of a consumption boom, rocketing house prices, wage rises and a sharp weakening of the Icelandic krona amid global foreign exchange turbulence.

"Inflation is now three times the bank's target rate of 2.5 per cent," said Arnór Sighvatsson, central bank chief economist. The bank warned further rate rises – after 14 in two years – would almost certainly be needed to counter inflationary expectations. "Economic developments since the end of March indicate that a considerable increase in the policy rate may be required to maintain sufficiently tight monetary conditions," it said.

Mr Sighvatsson said there were no clear signs of a slowdown in domestic credit or of a cooling in the housing market. House prices have risen by 20 per cent over the past year. He was also worried that a tight labour market might lead to excessive wage growth.

Analysts said the bank's comments were hawkish and suggested it was determined to bring inflation under control. Inflation, at its highest level for four years, has been exacerbated by a near 20 per cent drop in the value of the Icelandic krona this year. It has fallen 13.2 per cent against the dollar and 22.3 per cent against the euro.

The krona was one of the biggest beneficiaries of the global carry trade in which investors borrowed money in low-yielding currencies, such as the Japanese yen, to chase better returns in countries with higher interest rates.

But the carry trade has started to unwind due to rising global interest rates and tightening liquidity, hitting a number of currencies including the New Zealand dollar and Hungarian forint. Iceland, New Zealand and Hungary all have big current account deficits, with Iceland's reaching 16.5 per cent of gross domestic product last year.

The krona hit a low at the end of April and has since recovered some lost ground. Ingólfur Bender, head of research at Glitnir, one of Iceland's biggest banks, said he expected Icelandic interest rates would peak at around 13 per cent in September. Glitnir expects inflation to rise to 9 per cent at the end of the year but believes the economy will cool and the krona rise in 2007. "This should mean that inflation falls near to the bank's target by the end of next year," Mr Bender said. The Icelandic stock market has fallen about 18 per cent from its peak on February 16."

Copyright 2006 Financial Times

"Iceland's woes are about global flows"

"EU enlargement chief looks wistfully to Iceland"

By Daniel Dombey in London
Published: May 20 2006 03:00 | Last updated: May 20 2006 03:00

"Beset with problems over the European Union's planned expansion to the south, Olli Rehn, the man responsible for European Union enlargement, is looking north. Iceland, the country with an overheated economy and a growing interest in EU-style stability, is in his sights.

Iceland has yet to ask to join the EU and Norway has rejected membership in the past. For both countries, the prospect of hard bargaining over fishing rights has to date proved an insuperable obstacle to the arguments of the pro-EU membership camp. But with the Icelandic krona on the slide and inflation rising sharply, politicians and the business community are debating the merits of adopting the euro. This week, Iceland's central bank raised interest rates to the highest level for at least 15 years in a bid to cool down booming consumption."

"Sustainable Iceland: The Preview" by Bill Moore

May 20, 2006

"Did you know they grow bananas in Iceland? Or that they heat their entire capital city of Reykjavik, which means ‘smoky harbor' in ancient Norse, with volcanic steam? Or that all the bauxite used to make aluminum in Iceland's booming smelter industry comes from Australia, half a world a way?

In the coming days and weeks, we'll be writing about this remarkable nation and its determined drive to become the world's first "hydrogen economy" by 2020 using its abundant hydroelectric and geothermal energy resources. But to help set the stage -- much like a movie trailer -- and to give me time to organize my impressions, we offer our readers a short photographic diary of the General Motor's-sponsored trip that began when we landed at Keflavik airport early Tuesday morning, May 16th and ended with our departure on the 18th."

"Visa to launch new credit card payment system in Malaysia"

=>This is an example of the cellphone-charge revolution...

KUALA LUMPUR, Malaysia--Visa International said Monday it has chosen Malaysia as the first country to launch its new "Mobile Visa Wave Payment Pilot" credit card payment system.

The program, which uses Visa Wave smart card technology, will be officially launched in Kuala Lumpur on Thursday, the company said in a press release.

The Visa Wave program uses radio frequencies to eliminate the need to swipe credit card into a reader. Customers wave cards in front of the reader to make payments, similar to "touch and go" cards used in transport systems.

According to Visa, the program "allows consumers a fast, convenient and secure way to make payments within seconds and does not require a cardholder signature ... at the point-of-sale."

"All the cardholder has to do is simply wave, pay and go," the statement added.

"Iceland tops global broadband league"

Iceland had the highest percentage of broadband users in 2005, a new survey has revealed.

"Iceland debates joining eurozone" By Päivi Munter in London (4.18.2006)

"The Icelandic krona's sharp fall, which put it at a 4˝-year low against the euro on Tuesday, has provoked debate between political and business leaders about the country's possible membership in the eurozone.

In the past few weeks, both Halldor Asgrimsson, prime minister, and Sigurdur Einarsson, chairman of Kaupthing Bank, have raised the possibility of abandoning the volatile krona, which has come under pressure from concerns that acquisition-hungry Icelandic companies have overstretched themselves and the wider economy by taking on too much foreign debt."

U.S. Military Pulling Out of Iceland U.S. Military Blog

"The U.S. government has announced plans to remove its forces from Naval Air Station Keflavik, in Iceland, this fall, but reaffirmed its ongoing commitment to the island nation's security.

The decision is part of an ongoing Defense Department plan to restructure the military footprint overseas, which officials said no longer reflects current and emerging threats. The decision is expected to take effect within the next few months, with no significant military presence in Iceland after September. About 1,200 U.S. servicemembers, 100 DoD civilians and about 600 Icelandic civilians are based in Iceland in support of the Iceland Defense Force."

"Who will defend Iceland after US pulls out?"

By Thomas Borchert May 21, 2006, 2:27 GMT

"Reykjavik - Iceland's Foreign Minister Geir Haarde, a staunch supporter of the United States, has had a rough time after Washington recently announced it would close its remaining military facilities in the North Atlantic country.

'We were really surprised and disappointed about the abruptness of the decision,' he said in an interview with Deutsche Presse-Agentur dpa. Since Iceland does not have an army or defence ministry, Haarde also handles security issues.

Haarde's strong support for the US-led invasion of Iraq made him unpopular among some of Iceland's 300,000 inhabitants...

Although the days of confrontation between military alliances are over, the US remains the only power that could protect his tiny nation 'against the unknown,' Haarde said.

'I can't see any European country that would be able to take on that role,' he said.

Haarde thereby appeared to distance himself from Prime Minister Halldor Asgrimsson, of the liberal Progressive Party, who has signalled closer ties with the European Union. If the US does not want to guarantee the security of its NATO allies, other options have to be considered, the 58-year-old premier has said."

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To say the least, Iceland has been presented with a few unique problems. But unique problems must result in unique possibilities and solutions. Hopefully, the first event, the snowball that causes an avalanche, will be the departure of a foreign army. Claim back the land and make good use of it on our own. Provided the limited ways to enter the country, Iceland can concentrate their defense and minimize the number of arms. We must study the landscape as well as the avalanche, then ride the force out from under the eclipse. Icelanders must conjoin and develop a better democracy. This is the solution to its problems.

Thorsteinn Gestsson
thor@upublic.net
www.upublic.net