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The Faroese status and political system
The Faroe Islands are a self-governing community within the Kingdom of Denmark. Matters relating to the Faroe Islands are divided into:
- Special matters, in which the Løgting (the Parliament) has legislative authority and the Landsstýri (the Local Government) has executive power.
- Joint matters, which are administered by the Danish Government according to the laws of the Kingdom of Denmark. Due to their special status, the Faroe Islands receive State grants to cover joint matters. The Home Rule Act of 1948 acknowledges the Faroese language and the Faroese flag.
Faroese industry
The Faroese economy can be characterised as a mono-economy totally dependent on the fishing industry. About a quarter of the GDP at factor cost comes from the fishing and fish-processing industries. The fishing industry is also the basis for other sectors such as shipbuilding and other industries that supply the fishing industry. Until the mid-seventies, Faroese fisheries were mainly based on fishing in foreign waters, but the extension of national fishing limits necessitated a reorganisation of the Faroese fishing industries, exploiting the resources in Faroese waters to a much higher degree. After a period of 10-15 years of adjustment, the catch structure has reached a new balance with mutual agreements with the neighbouring countries concerning the exploitation of fish resources.
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Another industry in the Faroes is fish farming, with an annual production of about 12,000 t. Around 1% of the GDP in factor price comes from farming. In order to diversify the Faroese economy during the last couple of years, efforts have been made to establish a tourist industry.Work on preparing an oil industry has started, and is continuing.
The Faroese economy
Since 1989, the Faroese economy has been characterised by a recession. The recession will effect the economy for some years to come, partly as a matter of circumstances, for instance, the poor state of the fish resources in Faroese waters, and partly caused by political efforts to reshape the economy. However, even though activity is still low, it looks, from the development in the renumberation to employees, as if the economy has reached the bottom.
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