Economist predicts Iceland shipping boom

robert-wade-littleThe London School of Economics professor Robert Wade believes Iceland has an important part to play in the future of trans-Arctic shipping.

Wade, a long-time voice in favour of Iceland, said in the Financial Times that as Arctic ice melts, shipping in the region is already becoming easier.

China, he says, is looking to build giant reinforced icebreaking container ships to cross the Arctic and significantly shorten the distance from China to Europe and the east of North America.

As the massive new ships will need to dock and transfer their cargo to smaller ships for the journey to their final destinations, Wade believes Iceland will become a major freight centre.

Wade believes this is the main reason China maintains such a close relationship with Iceland, why its Reykjavik embassy is bigger than any other in the city and why Iceland’s president was greeted in China with such pomp and ceremony. He noted too, that China was a key lobbyist for Iceland when it attempted to gain a seat on the UN Security Council.

“British and Dutch negotiators currently trying to drive a hard deal on Icesave should bear in mind Iceland’s growing strategic significance as the Arctic ice melts. Icelanders have long memories, and draw encouragement from Kissinger’s phrase, ‘the tyranny of the tiny,’” Wade concludes.

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