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avoiding the need for continuous subsidies for the tourism industry after an initial investment in
tourist infrastructure has been provided.
This paper shows that economic diversification is not only restricted by obvious issues, such as the
lack of prospects for diversified local economic development, but also by deeper structural
hindrances to using the potential of local human capital in industries other than mining. The
findings of the paper show how the local resource path supports resource fatalism and expectations
of paternalism. In places like Revda the human capital is used insufficiently. Therefore, the
prevailing ‘resource fatalism’ in the community fails to support alternative skills and development in
the community, which leads to the out-migration of those who cannot find themselves a place in the
mining industry.
The abolishment of Minregion is unlikely to have any significant negative consequences to economic
diversification of these single-industry towns because Minregion had no finances to support their
programs. The initiative for self-evaluation of the economic diversification potential of singleindustry towns was the main positive result of the program. Therefore, different stakeholders in
single-industry towns need to take for themselves the main responsibility of diversifying the
economies of their towns with better understanding of their comprehensive economic potential. The
task is not impossible as the international experience shows that there are often at least small
prospects for economic diversification in peripheral resource communities in the Arctic.
Acknowledgements
The author would like thank Dr. Vladimir Didyk and Dr. Larissa Riabova (Kola Science Centre,
Apatity) and Dr. Vesa Rautio (University of Turku) for their comments related to the paper.
Moreover, the author wishes to thank the two anonymous reviewers for valuable comments for
improvements of the paper. The author is also grateful for the Academy of Finland for financial
support for the research and fieldworks of the study. The author takes full responsibility of all
errors.
Notes
1. Minregion was abolished by proposal of Prime Minister Dmitry Medvedev to President
Vladimir Putin at September 8, 2014 (“Rabochaya vstrecha s…”, 2014). The Ministry will
cease to exist until 1 December 2014 and it will shift its functions to other ministries, such as
the Ministry of Economic Development (Staalesen 2014b).
2. Revda (munitsipal’noe obrazovanie gorodskoe poselenie Revda) is part of the Lovozerskii district. It
is officially classified as an urban-type settlement (poselok gorodskogo tipa).
3. Staples are basic commodities, such as raw materials, which are the backbone of the
economic culture of resource regions and communities (Innis 1933).
Resource-Based Development & the Challenge of Economic Diversification