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Need for foreign investment in Iceland

Icelandic State Radio, RÚV, reports that Icelandic investment abroad is headed for a world record on GDP (gross domestic product) adjusted basis while the ratio of foreign investment in Iceland is one of the lowest known.

Provincial thinking is part of the reason why foreigners invest little in Iceland, says Thór Sigufússon, managing director of the Iceland Chamber of Commerce. He calls for foreign investment in Iceland while endorsing Icelandic expansion abroad.

According to the Iceland Chamber of Commerce, this year alone Icelanders have invested over 300 billion ISK abroad. At this rate, Icelandic investment abroad is headed for a world record on GDP (gross domestic product) adjusted basis with half of the GDP being invested abroad. Preliminary figures from the Icelandic Central Bank show that in 2004 investments Icelanders made abroad were over 190 billion ISK, a 600% increase from 2003.

In contrast, last year foreign investment in Iceland amounted to 27 billion ISK . Morgunbladid writes in its business edition today that a substantial part of these funds can quite probably be traced to Icelandic owned companies registered offshore, most commonly in Luxembourg and Cyprus.

Iceland Chamber of Commerce says that Icelanders need to study the obstacles in the road of foreign investments in Iceland and how to stimulate such investment. Obstacles in the fishing industry as well in the energy sector need to be removed. Foreign investments in private companies also need to be made possible.

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