Small, Rural, and Isolated

Fokus North: Tackling Integration in Iceland. By Hjördís Rut.

Image: of picture alliance/dpa | Bojanovska Jitka 21.08.2018, Island, Reykjavik: Solfar (Sun Voyager), iconic stainless-steel modern sculpture representing a Viking longboat by Jon Gunnar Arnason, in Iceland's capital Reykjavik photo, August 21, 2018

As in many other countries, the issue of integrating immigrants has been receiving more attention in Iceland. Unskilled labour migrants make up an extensive part of the country’s work force and Iceland has also received an increasing number of refugees in the last few years. In 2020, the Icelandic government launched a new four-year Integration Action Plan, taking a first step away from municipal responsibility for the integration of migrants by setting up new immigration consultancy centres.

Iceland is a small, rural, and geographically isolated country which has experienced mixed patterns of immigration and emigration since 1960. Historically, Iceland had a very homogenous population. Even as recently as 1998, immigrants made up only 2.5 percent of the total population, or just under 7,000 people. Beginning in 1998, and continuing until the financial crisis in 2008, this changed quite dramatically. There was a vast influx of people, with the number of immigrants surpassing 20,000. That trend reversed in the wake of the economic crisis, with a net outflow of 8,700 people between 2009 and 2012. Net migration became positive again in 2013 and, in 2016, the number of new arrivals surpassed 10,000 annually, approaching pre-crisis levels. The tourism and construction industries were booming, creating a high demand for labour. In early 2020, 15.2 percent of Iceland’s 364,000 inhabitants were immigrants.

Immigrants Make up One-fifth of the Icelandic Work Force

The effects of the COVID-19 pandemic notwithstanding, Iceland generally has low unemployment. In 2018, the overall employment rate was 87 percent, the highest in the OECD. Job vacancies and a generally strong labour market attracted foreign workers to Iceland. At the beginning of 2020, immigrants made up one-fifth of the Icelandic labour market and those workers have played a vital role in the recent economic upswing.

The majority of Iceland's immigrant population is unskilled labour. A large proportion of those come from Poland (37 percent). Lithuanians are the second-largest group, almost six percent. The large number of labour migrants from those countries can be attributed mainly to the expansion of the European Union (EU). Although Iceland is not a member of the EU, it belongs to the European Economic Area, which allows free cross-border labour movement between EU Member States. As a well-represented group in the country’s labour market, immigrants have contributed significantly to the Icelandic economy in recent years. But it is a two-tiered labour market.

Despite that strong economic situation, the Icelandic Confederation of Labour (ASI) and other trade unions have consistently highlighted the issue of the exploitation of foreign workers in the Icelandic labour market. Although breaches of wage agreements are extremely rare for the majority of workers, foreign workers and young people in the lowest income groups are more likely to have their rights violated or their wages stolen. Despite making up only one-fifth of the Icelandic workforce, foreign-born workers accounted for more than half of all complaints made by ASI member unions in 2018.

Increased Grants of Asylum

In 2016, just 11 percent of asylum applications were accepted. That year, the majority of the applicants were from Macedonia and Albania, countries deemed safe enough that asylum seekers could be deported back to them. Iceland has also made active use of the EU Dublin Regulation, which allows a country to send refugees back to the first EU member state they entered without considering their status. But 2018 was a record year for approved asylum applications in Iceland. Of the 867 applicants, 531 received international protection, supplementary protection, or residence permits for humanitarian reasons. The majority of those applications were from Venezuela, which may explain why so many more were approved than in previous years. Refugees from Venezuela are less likely to arrive in Iceland via another European country, meaning that the Dublin Regulation cannot be applied.

The Icelandic media regularly covers cases where asylum seekers are expelled after living in Iceland for long periods of time. The application process has taken so long that by the time a decision is made, they are already settled and, in some cases, have children born in Iceland. In some of these cases, the general public, human rights activists, and some opposition MPs have protested loudly, sometimes triggering a different outcome. However, in cases that do not receive media and public attention, people are often deported away from the public spotlight. Those cases have even caused conflicts within the government, with one MP resigning from the Left-Green Movement this autumn.

Greater Focus on the Integration of Immigrants

In recent years, integration in Iceland has been managed based on the government's Integration Action Plan, 2016-2019. The next four-year plan for 2020-2024 has been reviewed by different societal factions and is about to be submitted to parliament. The new action plan is based on the same five pillars as the one it is replacing: society, the family, education, employment, and refugees. Each post includes specific measures to ensure equal opportunities for everyone, regardless of individual circumstances.

Parliament has also debated other initiatives for immigrants  and various measures are in the pipeline. First, authorities have introduced a number of improvements in response to the criticism that asylum seekers are not treated as well as quota refugees. This has been supported by, for example, the National Audit Office. Thus far, only quota refugees have had access to a special integration program that includes settlement assistance and language courses. The newly-introduced advancements are aimed at making integration assistance and services available to all refugees. For example, an immigration consultancy centre will provide all immigrants with advice and information on services, rights, guidance, and obligations. This designated “first-stop-shop” represents a significant policy shift, since integration issues were previously solely a municipal responsibility. The consultancy centres are a collaborative venture between the federal government, municipalities, and institutions. Implementation of this measure is planned for January 2021.

A second step was taken in the summer of 2020 when a parliamentary resolution proposed by the Social Democrats was adopted unchanged. The resolution formulates a policy to make better use of the experience and skills of immigrants by empowering people of foreign origin to participate in society. It highlights Iceland's weak position on integration and recommends learning from the experience of the fellow Nordic countries to build on its core values of justice and equality.

An Urban and Rural Integration Divide

As with the rest of the population, the majority of immigrants (64%) in Iceland live in the capital area.  For those that live outside of the capital, it is often up to local communities to facilitate the integration process. Towns and municipalities across the country have much smaller populations than the capital region, and therefore fewer resources to facilitate immigrant integration. The integration of unskilled migrants into rural communities is sometimes hindered by the absence of a jurisdictional agency. Additionally, since most immigrants in Iceland are unskilled labour, a challenge exists in providing help or guidance to people who feel fully capable of finding their way without assistance or interference. Less populated municipalities also have fewer resources than the capital region. However, in the case of quota refugees, it has sometimes been deemed beneficial to settle them in smaller communities where it is easier to retain the overview than in a large urban area. But they have the advantage of  Icelandic Red Cross preparations for their arrival and  local volunteers to support the new immigrants. How well integration works for other refugees or migrant labour in rural areas often depends on the individual and the receiving community.

Despite being geographically isolated, Iceland has been a destination for migrant workers for the last two decades. The number of refugees seeking asylum in Iceland has also been increasing, and the Icelandic system for dealing with new arrivals has developed alongside the influx, especially in recent years. We will follow with interest in the years to come how successful the latest measures and decisions will be in practice.



Hjördís RutSigurjónsdóttir, Research Fellow at Nordregio, Stockholm.

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