FAROE ISLANDS
Economy
Economy
Cities in FAROE ISLANDS
| Tórshavn |
Economy
General
The Faroe Islands' economy has been developing very well since 1994, mainly due to a strong increase in fishing and high and stable prices. Unemployment fell sharply and in certain sectors it is becoming increasingly difficult to find personnel. This positive economic growth resulted in a budget surplus that reduced debts to Denmark. The almost total dependence on fishing also makes the economy very vulnerable if, for example, prices fall sharply. Oil discoveries near the Faroe Islands could provide additional income and lay the foundation for a more diversified economy, less dependent on Denmark and Danish economic support. Aided by Denmark's financial support (15% of gross national product), the standard of living of the Faeroese is approaching that of the Danes and other Scandinavians.
Fishery
The main means of subsistence is fishing, especially cod and herring processed into stockfish. Initially, people mainly fished in the vicinity of Greenland, Canada, Svalbard and Iceland. Here they mainly fished for shrimp and cod; in the North Sea they mainly fished for mackerel and whiting. After the territorial waters were extended in 1977, the Faroese fishermen stayed closer to home. Technological tools and ships also continued to improve. Until 1990, 58% of all fish was caught in Faroese waters. Dried, chilled, frozen and salted fish accounted for a large part of exports and 20% of the labour force was employed in the fish sector. A fairly new activity is fish farming (including salmon and trout).
Other economic activities
Only 6% of the land area is cultivated. Arable farming produces potatoes, barley, tubers and vegetables, mainly for domestic consumption. More important, however, is animal husbandry, which consists mainly of sheep farming.
The industry is strongly tied up with fishing (preserving, processing, soap and margarine manufacturing), and there are also some dairy factories and wool spinning mills, which are connected with sheep farming. Ten percent of the labour force works in companies that make supplies for the fishing industry.
Exports, mostly fish and fish products, are mainly directed to Denmark, Great Britain, the United States, Norway and Germany. In 2013, exports amounted to $824 million and the main export partners are Denmark, Great Britain, France, Germany, Iceland, and the United States. In 2013, imports amounted to $776 million and the main import partners are Denmark, Norway, Germany, Great Britain, Sweden, Iceland and the United States.
Domestic traffic relies heavily on shipping. Atlantic Airways and Maersk Air have regular flights from Vagø Airport to Copenhagen, Bergen, Reykjavik and Kirkwall (Orkney Islands). The airport is located on the island of Vágoy. The main port is the capital Tórshavn. Smaller ports are found in Klaksvik, Vestmanna, Skálafjørður, Tvøroyri, Vágur and Fuglafjørður.
Sources
Cornwallis, G. / Iceland, Greenland & the Faroe Islands
Lonely Planet
CIA - World Factbook
BBC - Country Profiles
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