Posted December 2011
Icelandic males – Were
the two twenty-something Icelandic investors, who went to Russia
in the early 1990s to found the Bravo beer business, modern-day
gold-diggers? Or were they typical Norseman who had dropped
their battle axes in favour of the latest high tech gadgets and
the most stunning arm candy?
This got me thinking.
If it’s true that you are what
you eat, then Erlendur, the Icelandic detective in Arnaldur
Indridason’s crime novels, is a case in point. Erlendur, a
generally glum and withdrawn character, in the novel
“Hypothermia” (2007) seems to live on a diet of porridge, cold
Lifrarpylsa, a haggis-type of sausage made from lamb’s liver and
preserved in whey, sour-lamb rolls, sheep’s head (plus eyes) in
jelly and microwave dinners.
Mr Indridason did not make any
of these dishes up. Except for the latter, they are the
highlights of traditional Icelandic cuisine. Because of the
harsh climate, Icelandic cooking used to be all about pickling
and preserving. You could keep some of those disgusting-looking
dishes for months behind a radiator or under your bed (this
being autumn, Erlendur stores his sheep’s head in a pickling tub
of whey out on his balcony) and they would still be safe to eat.
Other dishes like the famous Rotted Shark needed to be fermented
first (by burying it in sand for about six months) before they
were ready to be turned into dinner.
As said, if it’s really true
that you are what you eat, middle-aged Icelanders wolfing down
their dreary “husmanskost” (“home-cooking”), must be veritable
sourpusses.
Actually, Erlendur is a jolly
kind of guy, even likeable compared with Indridason’s line-up of
Icelandic baddies, who run the full gamut from taciturn
alcoholics and depressive druggies to monosyllabic wife-beaters,
having been brought up on a diet much like Erlendur’s.
Given Mr Indridason’s
prolificacy – ten Erlendur novels have been published so far –
and Iceland’s tiny population of only 300,000 people, you could
be forgiven for getting the impression that every other
Icelandic male must be a ticking time bomb seething with rage
and resentment – much like the devious and murderous inhabitants
of Ystad, the Swedish town in which ten Wallander thrillers are
set.
Obviously, there is a
narrative strategy behind Mr Indridason’s detailed description
of Erlendur’s culinary hankerings which he treats as a symptom
(rather than the cause) of deeper social upheavals.
Before its recent banking
craze, when Iceland had little to export but fresh fish and
needed to import everything except fish and energy, the country,
which is the size of Kentucky, was one of Europe’s poorest
states, whose inhabitants barely managed to scrape a living from
fishing and farming.
In Mr Indridason’s Nordic Noir
society, Erlendur is a representative of the “old” farming and
fishing Iceland, constantly obsessing about his cultural roots
and dysfunctional family. But on the whole (put it down to his
diet) he seems much more grounded and settled than those whom he
encounters in his line of work: the never-ending stream of
life’s victims and losers who failed to adapt to the ways of the
modern world (e.g. unskilled labourers, illegal immigrants, drug
addicts, single mothers on the dole dumped by their partners).
Surprisingly, for such an
astute social commentator, Mr Indridason does not deal with the
“new Iceland” and the new breed of Icelanders who made the
country notorious this past decade: investment bankers.
It was in the early Noughties,
circa 2003, when Iceland’s fishermen decided to become bankers.
Hundreds of students each year enrolled in Finance 101. Hedging
won over haddock. And guess what. They were very good at it.
Making huge amounts of money, that is. Suddenly filthy-rich,
Icelanders decided that wining and dining now meant whale
carpaccio with ginger- and chili-spiced pear compote at the
“Perlan” restaurant washed down with a crazily expensive wine
rather than having a coke and a hot dog on the hoof.
What led them to turn their
tiny country into one gigantic hedge fund?
Michael Lewis, the financial
disaster travel journalist, for his piece “Wall Street on the
Tundra”, which was published in Vanity Fair in April 2009, had
travelled to Iceland in December 2008 to find an answer. And
saw: “An entire nation without immediate experience or even
distant memory of high finance had gazed upon the example of
Wall Street and said, “We can do that.” For a brief moment it
appeared that they could. In 2003, Iceland’s three biggest banks
had assets of only a few billion dollars, about 100 percent of
its gross domestic product. Over the next three and a half years
they grew to over USD 140 billion and were so much greater than
Iceland’s GDP that it made no sense to calculate the percentage
of it they accounted for.”
As male Icelanders were
fleeing the economics of fishing for the economics of money,
Iceland not only witnessed the most rapid expansion of a banking
system in the history of mankind, it also saw a fundamental
change of its gender relations.
Contrary to Mr Indridason’s
stereotypical female victims, Icelandic women are not exactly
oppressed, generally speaking. “On paper”, argues Mr Lewis “they
have it about as good as women anywhere: good public health
care, high participation in the workforce, equal rights. What
Icelandic women appear to lack is a genuine connection to
Icelandic men. … Everyone knows everyone else, but when I ask
Icelanders for leads, the men always refer me to other men, and
the women to other women.”
Iceland may take pride in
being an egalitarian society, but when it came to money and
banking, women had little to do with it. “Women worked in the
banks”, Mr Lewis points out, “but not in the risk-taking jobs.”
Those who took the risks were incredibly young, tall, blond,
Icelandic males whom you would unexpectedly bump into all over
the place in Europe and the United States during Iceland’s boom
years.
Like the young Russian
oligarchs (think of Roman Abramovich, the 53rd richest person in
the world, who is only 45 years old) several of them had become
billionaires overnight. But, unlike the Russians, they were much
better looking and their work-out regimes produced better
results.
What got me interested in
Icelandic males is the story of Thor
Bjorgolfsson and Magnus Thorsteinsson, who were among the first
to invest in the Russian beverage industry in the early 1990s
when the two were barely of legal drinking age (see my report
“From Russia with love”, November 2011).
They decided to take a dis-used
soft drinks plant from Iceland to St Petersburg, the city
regarded as the Russian mafia capital (says the Guardian
newspaper). There in 1993 they formed the Baltic Bottling Plant,
which in 1995 started to produce alcopops, i.e. flavoured
alcoholic beverages, with great success. Think "bang for your
buck" and you will immediately understand why.
Ownership of that company
would later be challenged in the courts. But away from the legal
battles and recriminations (spirits production in Russia then,
as today, is largely controlled by the mafia), the Icelanders
sold the plant to Pepsi and used the money to build another
plant in St Petersburg with second-hand equipment which also
produced alcopops before they moved into beer, with the launch
of Bravo International in 1998.
Bravo's owners, two self-confessed naives - who
weren't quite as naive as not to change the security system at
their plant three times in about as many years - suddenly found
themselves among Russia's leading brewers. Between 1998 and 2001
Bravo reportedly became the fastest-growing brewery in the
country. Competitors today credit these Icelandic guys with the
Midas touch. Investing as little as necessary and leaving the
running of the brewery to mostly Russian staff, Bravo
nevertheless secured a 17 percent market share in the St
Petersburg region and 7 percent in the Moscow area because the
Icelanders took control of marketing, where they did an
excellent job. The Bravo brands sold 2.5 million hl in 2001
after which Heineken stepped in to buy the beer business (but
not the alcopops business - for the above reasons) for USD 400
million in 2002.
The Icelanders' story is a
classic exit-story, although it took them longer to get out than
planned. At first they had intended to stay in Russia for only
three to four years but in the end they spent almost a decade
there. With cash in their pockets, it was time for the two men
to return home and make their most daring bid: a 42 percent
acquisition of Landsbanki, Iceland's second-largest commercial
bank. Well, we all know how that story ended. Landsbanki is
bust. Mr Thorsteinsson, according to media reports, has been
declared legally bankrupt while Mr Bjorgolfsson, still only 45,
appears to enjoy the high life in London, the Guardian newspaper
reported in August 2011.
Their rags-to-riches story
does not get written up in Mr Lewis’ article although he
mentions Thor Bjorgolfsson in an aside.
Occasionally, Mr Lewis’ news
article reads like fiction. He is certainly not averse to taking
some artistic licence to portray Icelandic society post-boom. As
he curls up in his solitary hotel bed one night to read an
academic book on Icelandic economy, a couple next door engages
in noisy sex while two expensive cars get blown up outside for
their insurance. Coincidence or carefully made up? It does not
matter.
Stuffed with facts and figures
his piece remains the best analysis of the Icelandic financial
bubble to date. Not least because he strives to uncover the
psychological forces that drove it: namely men wanting to be
real men. Cherishing conflict and heroism, the modern-day
Icelanders resemble their Norsemen ancestors, those fearless
sailors, merciless raiders and hardy settlers, who rowed to the
heart of Russia and challenged the unknown Atlantic to sail to
America over a thousand years ago.
True, there were plenty of
women in Iceland’s recent and ancient histories. But as Mr Lewis
concludes: they are both chiefly histories of men ... who left a
trail of victims in their wake (my addition).
Detective Erlendur would
probably agree.
Here’s the link to Michael
Lewis’ article “Wall Street on the Tundra”:
http://www.vanityfair.com/politics/features/2009/04/iceland200904
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