Iceland stuck between a rock and hard place

How will Iceland’s art institutions and galleries emerge from the economic crisis?

REYKJAVIK. Without a doubt, Iceland is in a dire situation. Since late last year the country’s economy has turned upside-down, transforming the nation from an almost unrealistically wealthy state to an all but bankrupt one. According to the International Monetary Fund, Iceland’s debt will amount to 108% of GDP for the years 2009 and 2010; according to financial analyst Moody’s, it will be much higher, at 150% of GDP. In October last year, when one apocalyptic news item followed the next, the crisis was still abstract in the minds of Icelanders. But surreality has become reality as thousands of individuals have lost their investments and their security, if not their jobs. Inflation makes all debt grow faster than one’s ability to pay it off while at the same time raising prices. And everyone is aware that this might be only the beginning.

If there is one word to best describe our present circumstances, it is “uncertainty”—and trembling uncertainty weighs heavily upon our psyches and our real lives. Among those who have been struck hardest are Icelanders living abroad—especially artists and students—dependent on their Icelandic income: even if they are able to access their bank accounts, the Icelandic krona has plunged in value. Living abroad, which once placed Icelanders at an advantage given the previously favourable exchange rates, is no longer easily affordable. The most popular destination for Icelandic artists in the past years was Berlin: it was attractive and cheap. But now, for many, it has become unaffordable and they have had to move back to their home country.

While many Icelanders head for home, many artists in Iceland have had to relinquish their studios as they lost their jobs, with the shrinking public financial support for studio spaces resulting in higher rents. As most public funding is up for reassessment, the immediate future of independent arts institutions, organisations and projects is extremely shaky. The annual Sequences Festival was already about to call off its 2009 event but has received a small grant from the City of Reykjavik, high enough to pay at least the manager, and the festival is currently scheduled to go ahead in October. However, the idea of hosting the European Manifesta Biennale 2012 in Iceland was killed off by the previous Minister of Culture by the end of last year. Also unclear at this stage is if Iceland will participate in the Venice Biennale in 2011.

Museums are at an advantage, insofar as they are at least aware that they will have to reduce their budgets by a minimum of 10%. The less predictable issue is what the consequences of this reduction might be. The current state of the economy will heavily affect funding for artists, especially those grants to finance artists in their endeavours abroad. Artists’ grants from the Centre for Icelandic Art (CIA.IS), for example, in support of participation in international exhibitions, will be decreased by up to one third of their former value. Last year we allocated Ikr5.1m ($40,630); this year it will be Ikr3.6m($28,690)—20% of the centre’s budget. This is exactly the amount the centre spent in 2005 in order to support artists exhibiting or studying abroad and international art or publication projects. But the devaluation of the krona has cut this amount in half.

When asking people involved in the arts and culture their opinions on the impact of the crumbling economy, one gets a wide range of answers. Those who are responsible for art institutions—such as museums, project spaces and galleries—are mainly pessimistic. To the contrary, more optimistic voices resonate among the artists who hope that the large-scale problems will actually help improve their own situations. The reason for such differing opinions is paradoxically one and the same: the chronic lack of money caused by an historical undervaluation of the visual arts. As a young phenomenen in Iceland, visual art is still in its development. Iceland has only one international operating gallery (i8) and barely a handful of collectors. Artists who have never known wealth cannot lose it. They are now pinning their hopes on a general cultural shift in attitude and values. On the other hand, art institutions have been operating on minimal budgets but nevertheless with extensive programmes and—at least in recent years—to a high professional standard. Financial cutbacks will endanger the progress, if not the entire existence, of any given institution.

Even in Iceland’s golden years—which are now behind us—neither public and private funding nor sponsorship ever reached a self-sustaining level. Despite the fact that banks sometimes supported single exhibitions locally and abroad, or that they made it possible for museums to offer free admission, long-term collaborations were rare. Quite often, financial support was simply a matter of giving a sum of money in exchange for the display of a logo. The lack of understanding, foresight, long-term planning and sustainability has characterised not only the private but also the public sectors.

A central problem is the taxation of art, which has never been attractive enough for companies to invest significantly in the arts (there is no tax deduction for acquiring art at all. Financial support to registered institutions or associations can reach only 0.5% of a company’s income). The art market in Iceland has only a small handful of galleries that deserve the name, as most of them are, rather, project spaces providing the opportunity to buy art. The problem here lies in the fact that the majority of art deals are under-the-table sales: people are buying art from their artist friends or relatives directly, which means that it has always been difficult to evaluate the turnover of assets. Again, this is a critical argument within the cultural and political debates for more public funding.

Such a description of the reality of the recent past could easily give the impression that the Icelandic art scene was already in a crisis before the economic collapse. But that would only be a partial assessment; the Icelandic art scene is quite unlike any other in the western world, considering on the one hand the fact that an outstanding percentage of the population is active in the arts and culture, and its unique—and short—history on the other. Emerging professionally only at the turn of the 20th century, visual art has not entirely managed to catch up with international standards, be it in terms of education, theory, criticism or market. However, Icelandic visual art still managed to grow and make a distinctive name for itself. For example the Icelandic representatives at the Venice Biennale, such as Rúrí (2003), Gabriela Fridriksdottir (2005), Steingrimur Eyfjörd (2007) or Ragnar Kjartansson who will be the representative this year have gained international reputations. Others, like Katrín Sigurdardottir, Egill Saebjörnsson or the Spanish-Icelandic couple Libia Castro and Ólafur Ólafsson made their names by living and working abroad. Contemporary Icelandic art is very much rooted in conceptual art of the late 1960s and 1970s and connected to names such as Dieter Roth, Hreinn Fridfinnsson, Sigurdur and Kristján Gudmundsson or Magnús Pálsson, who developed early, sustainable international networks.

In the minds of many, the current dramatic national crisis is seen as a clean sweep, evening out the materialistic and ideological conditions within Icelandic society. Change can only be achieved if we are all open to critical and self-critical analysis, and if we make use of this opportunity to rethink and re-evaluate our own aims. Political issues affecting the arts—such as the above-mentioned taxation of visual art, or the adherence to the 1% law on art and architecture—must be re-evaluated in order to prepare a new foundation for visual art in Iceland. This period will hopefully leave time and energy for reconsidering general and personal objectives.

Icelanders have endured numerous difficult phases in their recent and historic past, and there is no doubt that they will cross this valley as quickly as possible. They can rely on their enormous creative energy, on their strong self-confidence and their inspiring environment to guarantee that this island will preserve its exciting, singular art scene—with or without money.

The writer is director of the Centre for Icelandic Art

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