Iceland Warms Up to Filmmaking : Movies: Its ‘Children of Nature’ is vying for Oscar’s foreign-language film, and its budding industry is even making inroads in Hollywood.

The president of Iceland is on the telephone, eager to talk up moviemaking.

It’s that way up near the Arctic Circle. Ask and the president, a three-term president at that, returns the call:

“Maybe it is not well known,” says President Vigdis Finnbogadottir, “but we have what we call the Iceland Film Fund, which provides up to $1 million for our filmmakers. But you know, that is not enough, so our filmmakers have to find partners overseas, in Germany, in the Scandinavian countries, in the United States. The arts have a strong tradition and value in Iceland, and filmmaking, which is new to us, is fitting into that tradition.”

So if it’s OK for George Bush to make commercials for British television pushing tourism to the colonies, why not President Finnbogadottir using her trans-Atlantic telephone to talk about co-production, government programs, movie houses and seven-figure financing in her country?

And for good, patriotic reason.

Iceland, not exactly a cinematic superpower . . . yet . . . is beginning to make some inroads in Hollywood.

* For the first time in the 13-year history of that country’s clearly budding film industry, it has an Academy Award nominee for foreign-language films, Fridrik Thor Fridriksson’s “Children of Nature,” which is going up against such experienced competitors as Italy, Sweden, Czechoslovakia and Hong Kong. Next to Iceland, everybody looks big. There are more moviegoers in any of those above countries than there are Icelanders in Iceland.

* The nation of 250,000 people has a beachhead in Hollywood and that’s Icelandic native Joni Sighvatsson, who with Steve Golin is co-founder and co-chairman of energetic Propaganda Films, one of Hollywood’s most active independent feature film, television and commercial production companies, which has been involved with the upcoming “Ruby,” last year’s “Truth or Dare” and David Lynch’s “Wild at Heart.”

What Iceland is doing on a limited scale has become a way of economic reality in a number of countries. At last count, 32 nations could claim ongoing film activity. You can find adequate film facilities in Calcutta, Cairo and Dakar.

Most feature films shot for cable television in this country have partners overseas. That was a clear, forceful message delivered by executives from HBO, Turner, Viacom, MCA and Citadel Pictures last week at a meeting of the Independent Feature Project/West in Santa Monica: Most cable movies would not be made without certain foreign involvement, either an overseas distributor helping to finance the project or a story with international appeal or an actor known outside the United States.

Cable movies in this country largely are loss leaders for the film companies. Profits, when they come, come from being shown in theaters overseas or through home-video sales.

There’s another reason for thinking international: Costs.

With the universe of filmmakers expanding globally, some dollars might be saved by, say, shooting in Reykjavik rather than in Reseda.

Which gets us back to President Finnbogadottir. “We’ve had more good films made here in the last five years than ever,” she said. “Many documentary makers are coming here to shoot. We have one thing that is hard to match and that is our spectacular landscapes.

“We have many programs to teach the young about making movies and then we encourage them to go to the Continent or the United States to study more. When they are ready to make a film here they apply to the Film Fund. They send in a script. It’s evaluated and if it is accepted they receive a grant. It rarely is enough financially. So they have to find backing somewhere else. Many of our film partners are in Germany. Almost every company that makes films here or is involved with Iceland is an international partnership, usually with the money coming from the partner and the work from the Icelanders.”

Propaganda’s Sighvatsson, a graduate of Icelandic schools as well as the cinema department at USC and the American Film Institute, has another idea about expanding the Icelandic film presence. He’s talking off-shore company registration, possibly following what is done in Holland, the Delaware of European filmmakers. Sighvatsson says he has been talking with Hollywood and overseas executives about providing tax relief for filmmakers if they set up offices in Iceland, providing certain tax shelters and through fees some necessary funds to expand Icelandic moviemaking.

“ ‘Children of Nature’ with its academy nomination,” he says, “has increased the awareness on the part of many in the film business of Iceland’s ability to produce quality films.

“But there is something else about filmmaking in Iceland. It is so different from Hollywood. Here when we make a film so many people are involved, so many different things are done. We got through script development. We test and test. Many people are involved. In Iceland you do everything yourself. There is no corporate involvement. It is a purer form of filmmaking. No one interferes with you. There is artistic freedom without compromise. The atmosphere is ideal. Certainly the market for Icelandic film is limited, but there are trade-offs and the trade-off there is that you can work in a system free of interference.”

And don’t forget President Finnbogadottir’s unmatched, awesome, camera eye-friendly landscape. Plus the country’s strong urge to develop arts programs of all sorts. Before she became president 12 years ago, Finnbogadottir was artistic director of Reykjavik’s Municipal Theater, operating year-round.

“The arts are a tradition in Iceland,” she says. “And we have great ambitions to develop them more. The visual arts, the literary arts, the cinematic arts.”

The idea may be taking hold. Last year only one film was completed in Iceland. This year, encouraged by the success of “Children of Nature” in a number of festivals and with last month’s Academy Award nomination, five features are now before cameras.