Arctic Yearbook 2014 - Page 361

361 Arctic Yearbook 2014   institutions which could encourage innovation and diversification hinders a more diversified economic development. Moreover, the dominant industry has defined the skills that are required in local employment markets. Thus, the mono-industrial local economic profile leads to a lack of a diverse set of human skills, which could have been used to serve economic diversification into other industries in the community (Carson & Carson 2011: 375). Furthermore, the traditional existence of certain professions in resource communities also presents obstacles to the diversification of the economy (Carson & Carson 2011: 375). Moreover, a local culture that is based on resources can also support the emergence of ‘resource fatalism’, where the area’s natural resources are viewed as the only viable source of livelihood for such resource communities (Suutarinen 2013: 339). This resembles a psychological difficulty to overcome Soviet legacies, which is typical in post-Soviet industrial communities (Mah 2012: 117). The Resource Curse The resource curse has been mainly studied at the state and regional level (e.g. Bradshaw 2006; Travin & Marganiya 2010). According to the main argument of the resource curse thesis, volatility in the price of natural resources ultimately leads to unsustainable development, a feature characteristic of resource regions and communities (Bradshaw 2006: 725; Schmallegger & Carson 2010: 204). Moreover, at a local level, the resource curse also results in the creation of a local mindset, which sees the resource development path as the only possible way forward in terms of local development (Tynkkynen 2005; Tynkkynen 2007). At the local level, the ‘resource curse’ can be understood as an obstacle to sustainable local development and as a hindrance to the promotion of alternative paths of development. On the one hand, it is explained by the fact that the development and well-being of the community is dependent on the global volatilities of resource prices. On the other hand, resource-based development has consequences to the overall mindset of the community, where alternative development paths are underrated because the utilization of local resources is seen as constant basis of the local development. The Path of Paternalistic Expectations The local development path has formed expectations of paternalism in resource communities where the town-constituting enterprises have maintained the social sphere and its residents. In the Soviet era, resource enterprises played a central role as providers of several paternalistic social services for their communities (Kortelainen & Nystén-Haarala 2009: 151–152). At present, the incompetence of local administrations and the absence of other providers of such services forces town-constituting enterprises to maintain several communal services in single-industry towns in Russia (Kortelainen & Nystén-Haarala 2009: 151–152). In the Soviet era, the state’s paternalism was implemented through state-owned enterprises, which in turn led to these communities to develop expectations of paternalistic provision by the state and the resource firms. Currently, the historical legacy of these paternalistic expectations acts as a hindrance to the residents adopting an active role in local development. The paternalistic policies of the Russian state and of regional authorities towards the resource firms of the Russian North have continued, in some cases, in the form of subsidies to the main Resource-Based Development & the Challenge of Economic Diversification