Kaj Leo Johannesen: The Faroe Islands’ challenge is to keep hold of its youths

Kaj Leo Johannesen compares EU and Norway’s boycott with the one imposed on Cuba — yet he wishes to quickly negotiate a free market agreement with the EU as soon as the conflict is over.

“The fisheries conflict with the EU and Norway is not about herring and mackerel, it’s about which principles should cover the North Atlantic. How do we divide up our resources when climate change changes the way the fish moves?” says Kaj Leo Johannesen when we meet him during an Oslo visit.

Former goal keeper

The comparison with Cuba feels a bit far fetched. The man sitting in the sofa at Grand Hotel is no bearded revolutionary, but an intense man who like a football goal keeper leans forward to face the next question. He answers in a  Scandinavian peppered with some English. Kaj Leo Johannesen has been Prime Minister since 26 September 2008. He is also the first Prime Minister to get the voters’ renewed trust and will remain in his position until 29 October 2015. Being interested in history, and with a varied professional background including being a fisherman, skipper, marketing manager and national football player, he delivers all his dates in an exact manner — like the historical date of 12 September 1990, when the Faroe Islands beat Austria 1-0 at football in their first ever UEFA match.

“I also had the pleasure of playing Norway at Ullevål [in Oslo]. We sadly lost 1-0. Rune Bratseth scored the goal,” he says.

Perhaps football is the reason Kaj Leo Johannesen wonders how civilised nations in negotiation can begin boycotting a small fishing nation with 49,500 people while at the same time talk enthusiastically about new trade agreements and good relationships with the EU.

Football players — at least the ones showing sportsmanship — can play a tough match and still swap shirts afterwards. 

“I compare it to a marriage. You can disagree on who should do the dishes one day without seeking a divorce,” he jokes.

The boycott hits the EU hardest

Another point is that the boycott has hit the Faroe Islands less than the EU and Norway would have wanted it to.

“It means we need to fill more working hours in the Faroe Islands and more jobs at the large, modern fishing processing plants we have constructed. It impacts on Danish workplaces — which are forced to show solidarity with the EU. But of course it also means a loss of revenue when you exclude 620 million  of the citizens with the best purchasing power.”

Unemployment has been relatively low in the Faroe Islands for some time. 

“In general we have always had very low unemployment. When the crisis hit in 2008 and 2009 it reached 8.7 percent. But now it is 4.6 percent. We have managed relatively well through the economic crisis. We still work to stabilise society through other reforms in various areas, of course, like health care and pensions. The retirement age will be increased to 70 from 67 today. The Faroe Islands are known for having a high pension age combined with a high employment rate. I think we have always been good at working.”

“Not just to be nice"

The Faroe Islands are part of the Danish Realm which comprises Denmark, Greenland and the Faroe Islands. The two autonomous areas remain outside of the EU and share many challenges, but there are also major differences. The number of inhabitants is approximately the same — Greenland has just over 10,000 more citizens, but the Faroe Islands don’t have two languages and receives far less economic support from Denmark. The so-called ‘bloktilskud’ subsidy for the Faroe Islands is 630 million Danish kroner (€84.4m) while Greenland gets 3.6 billion kroner (€482.5m).

“But Denmark doesn’t give us 630 million kroner just to be nice. This is an agreement which strengthens both parties. Small is beautiful and big is powerful, as I like to say. But we have never been scared of taking on the responsibility for more areas. The next on the list is air traffic control,” says Kaj Leo Johannesen.

Compared to Greenland, where there is intense debate about independence from Denmark, in the Faroe Islands that issue has fallen by the wayside, says Kaj Leo Johannesen.

“In 1998 people really wanted it, after the banking crisis. At that time some parities in the Faroe Islands felt tricked by Denmark. Since then cooperation has been very constructive,” he says.

Young people study in Denmark

Most of the young people still go to Denmark to get an education. This is also a period in life when they often meet a partner and start a family. The greatest challenge for the Faroe Islands is to make them return after having lived for six years in Denmark.

“The Faroese population isn’t shrinking a lot. Since 2008 60 people have left. But the population is getting older and there are fewer youths. In order to tempt them back we need to be able to offer them jobs, first and foremost in the fishing industry.”

But do young people want to work there? Is that not a very male dominated industry?

“The time when 100 women stood side by side cleaning fish is over. Today the fishing industry is becoming more technological. We need people with technical training who can operate the machinery. Women can also work with sales and marketing and we need many bioengineers to develop new products.”

Fish is the backbone 

With 500,000 fish in the sea and what Kaj Leo Johannesen calls the best conditions for salmon farming anywhere in the world, fish will always be the backbone of the Faroe Islands’ economy.

“But today we only manage half of the fish. There are many by-products which we do not explore and we need to be more creative. In ten years time the value of by-products might match or be greater than the value of the filleted fish.”

Then there is the large unknown: oil exploration.

“So far we’ve drilled seven wells, all of them dry. But the wells which Statoil, Exxon Mobil, Dong and Atlantic Petroleum — the Faroese oil company — are going to drill this year will be very exciting. For the first time we will be drilling under the basalt layer found deep under the seabed. I believe the experts when they say any find could be major.”

As rich as Qatar

“With our population of around 49,500 people this means we could become as rich as Qatar overnight. We have looked at other countries, Norway and Alaska, and taken the best from their oil legislation. This has worked well so far. We are competitive and already have 1,500 Faroese working in the oil industry despite the fact we have yet to find one drop of oil.

“We will also make sure future generations will get part of the income and will see to it that oil revenues are phased in to avoid them impacting on other parts of the economy.”

This, along with a growing tourism industry — especially from cruise ships headed for the Arctic — means the need for foreign labour is increasing. 

“We can offer something different. People I have spoken to say that the feeling you get when you step off the plane is unique. It is a feeling of being ‘relaxed and unstressed’, you lower your shoulders after having been here for a couple of days.

“This is what we have to offer: Nature, strong colours, four seasons in a day. You can walk in the mountains and eat good food. We are really into gastronomy.” 

60 cruise ships visited the Faroe Islands this year, the runway at the airport has been expanded by 1,800 metres and three large airliners including a brand new Airbus now fly to Torshavn.

“So far we have had a rule saying foreign labour can only be used if unemployment is below 3.5 percent. Immigration is one area of responsibility which we will take over from Denmark. We will increase that limit to 6—7 percent,” says Kaj Leo Johannesen.

Major investments

Several major investments in infrastructure, healthcare and education will be made in the coming years.

“If we offer more further education here in the Faroe Islands, our youths don't have to spend more than three years studying in Denmark. That improves the chances that more of them will return. We are spending 500 million kroner on building a new university.

“We are also building new tunnels under the sea to link the capital area with Eysteroy and Sudroy. Already 85 percent of the population are linked via tunnels. These are far cheaper than ferries, which have become very expensive to run because of high oil prices, maintenance and the costs of new vessels. Young people don’t want ferries. My generation might be the last to accept them. Young people want to get to and from Torshamn quickly.”

Kaj Leo Johannesen is convinced the conflict with the EU will be solved — perhaps even before Christmas, and it almost seems like the conflict has enlivened the Faroese.

Not the first time 

“‘Necessity is the mother of invention’, you know. The same thing happened in 1964. The Faroe Islands was the only Nordic country to deliver fish to the UK during the second world war and in the years after it remained our most important export market. But in 1964 British fishermen could no longer accept that we landed so much fish and we were locked out. But there was no crisis. Quite the opposite. We soon found new markets.

“It’s the same today. We sell our herring and mackerel to the Far East, Russia and Africa. There are more African countries with greater purchasing power than what countries in southern Europe have today.”