Reykjavík Grapevine - 01.02.2013, Blaðsíða 6

Getting The Show Back On The Road
Iceland’s economic wellbeing counted in Range Rover registrations
Is Iceland Still On Sale?
Analysing prices four years post-crash
“Iceland’s de facto bankruptcy—its currency
(the krona) is kaput, its debt is 850 percent of
G.D.P., its people are hoarding food and cash
and blowing up their new Range Rovers for the
insurance—resulted from a stunning collective
madness. What led a tiny fishing nation, popula-
tion 300,000, to decide, around 2003, to re-invent
itself as a global financial power? In Reykjavík,
where men are men, and the women seem to
have completely given up on them, the author
follows the peculiarly Icelandic logic behind the
meltdown.”
So begins “Wall Street on the Tundra,” the
contentious Vanity Fair article written by Mi-
chael Lewis a few months after Iceland’s 2008
crash. Contrary to the picture painted by the
article, people weren’t actually blowing up
their Range Rovers en masse, but they probably
wished there was something they could do to get
rid of their luxury jeep, if it meant that they could
get rid of the attached foreign currency pegged
loan, which near doubled over night.
In the wake of the crash, the Range Rover
stood out as a symbol of the times, a leftover
manifestation of the nation’s collective binge.
Big cars are useful for taking on some of Ice-
land’s more rugged country roads, but they are
difficult to justify in Reykjavík, especially in the
city centre with its narrow streets. Nonetheless,
in 2007, more Range Rovers were being im-
ported to Iceland than to the rest of Scandinavia,
which is a 100 times larger market, according to
a Yale Insights interview with former Minister
of Business Affairs Gylfi Magnússon in 2009.
Range Rovers were a status symbol; people com-
pared their luxury jeeps like traders in American
Psycho compared their business cards.
As you can see in the accompanying graph,
there was a dramatic drop in new Range Rover
registrations from 259 in 2007 to 94 in 2008. The
number continued to drop with 10, three and
four registrations in the three following years.
The trend reversed last year, however, with reg-
istrations jumping to 24, which is more than five
times the number of registrations in 2011. This
leads us to conclude, if our newly invented RRR
Index is any kind of sign of the times, that Ice-
land may be getting the show back on the road.
By Anna Andersen
While Icelanders bemoaned the effects of the fi-
nancial crisis in 2008, dollar- and euro-carrying
tourists rejoiced that the notoriously expensive is-
land had suddenly become more affordable. And
if this wasn’t obvious in November 2008, Iceland’s
international airport greeted tourists with a sign
that read “Welcome to HALFPRICELAND: Are
you here for the nature or the exchange rate?”
Indeed the króna lost half its value against
those currencies, but that’s only half of the post-
crash story. The airport ad overlooked the fact
that goods and services on the import-dependent
island had become 30% more expensive. So it
wasn’t exactly a countrywide 50% off sale, but a
sale is a sale and aren’t we all suckers for a sale?
The ad was taken down a few months later
after a number of Icelanders took issue with its
lack of tact rather than its false marketing. None-
theless, tourists have continued to visit Iceland
in record numbers every year post-crash, almost
outnumbering the nation’s 319,575 inhabitants
two-fold this last year.
If these tourists are still coming to enjoy the
favourable exchange rate, goods and services are
now on average 60% more expensive than they
were before the crash. So Iceland is only 25%
cheaper than it was when it seemed so prohibi-
tively expensive in 2007. But, happy shopping!
Don’t by fruit unless you are in danger of contract-
ing scurvy. Apples, pears, grapes and raisins have
increased in price by more than 130%. They are
not sale items. In fact, they were a better deal for
tourists in 2007.
Don’t buy a pair of jeans. Their price has increased
119%, which makes them 2% more expensive for
tourists today compared to 2007.
Don’t buy a lady’s woollen pullover. It has in-
creased in price by 145%, which is a 14% mark-up
for tourists.
Don’t buy frozen shrimp. Their price has gone up
by 122%. That's a 3% mark-up.
Don’t buy a refrigerator. It has increased in price
by 115%, which means it’s simply not on sale.
This is a bad deal. Don’t be deceived, tourists.
Don’t buy snuff. It is 151% more expensive. That’s
a 17% mark-up. Not to mention, it’s pretty gross.
2003
26
2004
31
2005
108
2006
163
2007
259
2008
94
2009
10
2010
3
2011
4
2012
24
Goods 2007
(ISK)
2012
(ISK)
Percent
change
The sale
for tourists
Flour, kg 89 140 57.30% -26.67%
Rice, kg 224 453 102.23% -5.72%
Whole-wheat bread, kg 296 439 48.31% -30.86%
Lamb, leg, kg 1253 1461 16.60% -45.64%
Forcemeat, kg 534 534 0.00% -53.38%
Haddock fresh, fillets, kg 1079 1557 44.30% -32.73%
Shrimp, frozen, kg 637 1412 121.66% 3.34%
Salmon, kg 1049 1853 76.64% -17.65%
Milk, l 76 122 60.53% -25.17%
Skyr (curds), kg 238 399 67.65% -21.85%
Dairy cheese, 26% fat, kg 932 1394 49.57% -30.27%
Eggs, kg 417 649 55.64% -27.45%
Margarine, kg 260 520 100.00% -6.76%
Tomatoes, kg 222 346 55.86% -27.34%
Cucumbers, kg 222 415 86.94% -12.85%
Apples, kg 120 281 134.17% 9.16%
Oranges, kg 103 245 137.86% 10.89%
Bananas, kg 152 259 70.39% -20.57%
Grapes, kg 355 910 156.34% 19.50%
Raisins, kg 323 786 143.34% 13.44%
Sugar cubes, kg 259 539 108.11% -2.98%
Coffee, domestic, kg 906 1859 105.19% -4.35%
Dark chocolate, 200 g 255 323 26.67% -40.95%
Light chocolate, 100 g 194 169 -12.89% -59.39%
Coca Cola, 2 l, bottle 167 294 76.05% -17.93%
Diet orangeade, 50 cl, bottle 113 146 29.20% -39.77%
Pilsner, 50 cl (2,25%), can 82 88 7.32% -49.97%
Vodka, Smirnoff, 750 ml, bottle 3140 4999 59.20% -25.78%
White wine, 750 ml, bottle 990 1950 96.97% -8.18%
Red wine, 750 ml, bottle 1190 1999 67.98% -21.69%
Beer, Víking, 50 cl, can 229 379 65.50% -22.85%
Cigarettes, pack of 20, pack 601 980 63.06% -23.98%
Tobacco, 43 g , pack 759 1359 79.05% -16.53%
Snuff, 50 g, can 405 1020 151.85% 17.41%
Men's shirt, pc. 4757 9472 99.12% -7.18%
Jeans, pair 8191 17963 119.30% 2.23%
Men's socks, pair 1140 1324 16.14% -45.86%
Ladies pullover, pc. 2951 7233 145.10% 14.26%
Oil for space heating, 100 l 6738 16350 142.65% 13.12%
Petrol, 95 oct. full service, 100 l 13470 25652 90.44% -11.22%
Refrigerator 55039 118406 115.13% 0.29%
Airline fare, Reykjavík-Akureyri 10120 15860 56.72% -26.94%
Bus fare for adults, in Reykjavík 280 350 25.00% -41.73%
Cinema ticket, ticket 900 1250 38.89% -35.25%
Lottery ticket, ticket 1000 1100 10.00% -48.72%
Swimmingpool ticket 220 375 70.45% -20.54%
NAVIGATING THE POST-CRASH “SALE”
OH YEAH, WHAT A STEAL! WATCH OUT, RIP-OFF!
The following post-crash sale* recommendations are based the price of goods and
services listed by Statistics Iceland (www.statice.is) one year pre-crash, in November
2007, and four years post-crash, in November 2012.
*The “sale” has been calculated based on the exchange rates listed by Iceland’s Cen-
tral Bank on November 1, 2007 (1 USD to 58,79 ISK) and again on November 1, 2012
(1 USD to 126,11 ISK).
Do buy men’s socks. They are only 16% more ex-
pensive than they were in 2007. That makes them
46% off for tourists.
Do buy a can of Pilsner. It has decreased in price
by 2%. That makes it 50% off for tourists. But do
note that this is light beer. Real alcohol can only be
purchased at state-run liquor stores called Vínbúð.
Do buy light chocolate (but not dark chocolate). It
has decreased by a whopping 13%. That’s 59% off
for tourists.
Do buy forcemeat, if you dare. It has not increased
in price, which means it’s 53% off.
Do buy diet Orangeade. It has increased in price
by 29%, which makes it 40% off. You can find ob-
scure sodas like Orangeade at Drekinn on Frak-
kastígur.
Do buy a lottery ticket. It has only increased 10%
and you could win LOADS of money.
Iceland | Economics
The prices of goods and services have gone up by an average 60% since Iceland’s
heyday in 2007. Too bad for Icelanders, wages haven’t gone up 60% :(
By Anna Andersen
6The Reykjavík Grapevine Issue 2 — 2013