2. Economic And Social Conditions Of Arctic H[] Edi

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The Economy of the North 2008Economic and social conditions of Arctic regions2. Economic and social conditions of Arctich[] ediGérard Duhaime and Andrée CaronIn 2007, Far Eastern Affairs published an article aboutprospective oil and gas development in the RussianNorth, stating that “the new hydrocarbon-producingcomplexes will speed up growth in living standardsand quality of life in East Siberia”.1 On the other hand,it was expected that the huge James Bay hydroelectricproject in Northern Quebec would lead to “a certaindecline in the standard of living of native people relative to that of the country, despite the financial benefitsof industrial development”.2Who are right - those who predict prosperity andwelfare resulting from industrial development orthose who recommend development of small-scalelocal economies giving benefits for the people directlyinvolved? This chapter approaches that question bylooking into the relationships between the economicconditions of the Arctic regions and human development.Table 2.1. Basic economic and social conditions, Arctic regions, 2006TotalAboriginalspopulation1YouthShare ofShare ofchildrenaboriginalShare of aged 0-14peoples in women inyears inthe totalthe totalthe totalpopulation population konFaroe tsSakhaTaimyrYamal-NenetsFemales670 05326 36441 46510 81529 47530 37548 183184 935465 01856 901299 89172 937236 257153 585251 886257 5811 280 20050 50017 000693 1001 488 300974 60022 600168 500857 00042 000950 00038 400532 3.868.9InfantmortalityTertiaryeducationShare oftertiaryeducationPer graduatesthousand in the totallive births nCompositedencyindex1ratioUSD-PPP32 81119 04430 33919 53224 49529 76115 27514 00013 84715 23717 95718 68718 70018 55014 72114 1397 46519 2679 7656 73416 85110 71012 38910 6829 853.10 73311 64120 8778673543643454556This index is based on the 6 indicators: female proportion, life expectancy, infant mortality, tertiary education rate, personal disposable income and dependency rate.11

Economic and social conditions of Arctic regionsThe Economy of the North 2008A Nenets man signs a paper to get a ballot as he votes at a mobile polling station in Tundra, near the river Niarovecha, located in the Yamal peninsula above the polarcircle, northeast of Moscow. REUTERS/Vasily Fedosenko/ScanpixStandard economic theory suggests that economicgrowth trickles down in society, inevitably increasinggeneral well-being and living conditions. Amartya Senargues that, in practice, this is not necessarily the case.He describes development “as a process of expanding the real freedoms that people enjoy. Developmentrequires the removal of major sources of unfreedom:poverty as well as tyranny, poor economic opportunities as well as systematic social deprivation, neglect ofpublic facilities as well as intolerance or overactivity ofrepressive states”3.Denial of liberties may include lack of access to healthservices and education, inadequate housing, and economic poverty. In the Arctic regions, the main questionis to what extent human development has improved inthe wake of large industrial development in resourceextraction and energy production. Human development may be incongruous with economic growthand may even be hindered by growth, when growthcombines with forces seeking to impose their exclusiveinterests.4 However, human development may also befostered by growth. The economy may support material conditions that are favourable to fulfillment andexpression of individual abilities, and to find meaningin one’s existence.The economic situation cannot be understood properlywithout considering its relationships with the societywhich surrounds it.5 In this context it is necessary toaccount for the relationships of power – taking into account the option that the economy ultimately may con12tribute to human development controlled by citizensthemselves, via democratic public authorities.While the present report The Economy of the North 2008puts large emphasis on the role of the oil industry andother extractive sectors, this chapter expands the scopeby depicting the basic social conditions and the socialissues raised by large-scale resource development.Does growth in this area of the economy favour humandevelopment, the capacity of indigenous and otherlocal Arctic residents to control their fate, to allow thedevelopment of their full potential – while huge pipelines span the wilderness where they reside? What arethe undesirable social consequences of petroleum andmining activities?Several socio-economic indicators are now available,making it possible to depict Arctic livelihood with abroader palette. Following the major analyses carriedout within the scope of the Arctic Human DevelopmentReport, the many studies on the social situation andliving conditions of residents of the Arctic and nativepeoples, the launch of the socio-economic database,ArcticStat, and finally, the publication of the first reporton The Economy of the North, it is now possible to examine the Arctic situation from a socio-economic viewpoint. This chapter focuses on fundamental dimensionsof economic and human development, as measured bya set of socio-economic indices. The socio-economicdata are interpreted in terms of social structures andpower relations between business, governments, andArctic citizens, in the various national and regional con-

The Economy of the North 2008Economic and social conditions of Arctic regionsBox 2.1: ArcticStatCircumpolar DatabaseAs a result of multiple sources with different definitions,methods and access, finding the relevant socioeconomicdata for the Arctic regions has long been a highly timeconsuming procedure.ArcticStat was created in order to overcome these difficulties and to increase the research capacity by taking advantage of already existing data. ArcticStat aims to facilitateresearch by organizing socioeconomic data covering 30Arctic regions belonging to 8 countries: Alaska, NorthernCanada, Greenland and Faroe Islands, Iceland, NorthernNorway, Northern Sweden, Northern Finland and theNorthern Russian Federation.The data made available by ArcticStat cover population,language, health, education, migration, economy, employment and other social issues. The computer database isa free-access web-based databank unique as a socioeconomic datasource devoted to the Arctic circumpolarregions.A user-friendly portal links users directly with the relevanttables on web sites where they originate. When suchprocedure is not possible, users have access to tables compiled and stored in the ArcticStat-database itself.ArcticStat www.arcticstat.org., was on line on October 1st2007. It gives access to more than 5 300 tables through 9indicators and some 75 sub-indicators.ArcticStat was created by the Canada Research Chair onComparative Aboriginal Condition of Université Laval,Canada, as a major Canadian contribution to the International Polar Year.texts of the Arctic, with particular emphasis on socialpolicies and political development in regions with amajority of indigenous people.Economic and human development:Method of analysisOur analysis is based on selected indicators of theeconomic, demographic, social, educational and healthsituation. The data were selected for their capacity todepict human development under the social conditions of Arctic citizens. Data for household disposableincome are used in our analysis. For the purpose ofmeasuring consumption possibilities, household disposable income is generally a more relevant indicator thanthe gross domestic product (GDP).The analysis covers the circumpolar Arctic, that is,Alaska (US), Yukon, the Northwest Territories, Nunavut, Nunavik and Labrador (Canada), the regions ofLapland and Oulu (Finland), Greenland and the FaroeIslands, Iceland, the regions of Finnmark, Troms andNordland (Norway), the regions of Norrbotten andVästerbotten (Sweden), and the regions of Arkhangelsk, Chukchi, Evenk, Karelia, Khanty-Mansii, Komi,Koryak, Magadan, Murmansk, Nenets, Sakha, Taimyr,Yamal-Nenets (Russian Federation). Data for 2006from ArcticStat (see Box 2.1) were produced by thenational statistical agencies of the countries concerned.Greenland/ColorboxThese data were complemented by an inventory ofhealth indicators and a preliminary version of Chapter3 of this report.6The most recent year available was used when 2006data were not available. Some data series were notcovered by all regions, and some data sources hadcertain major conceptual divergences. When data werenot available on a national scale, they were estimated.Missing data for certain regions were estimated by thecorresponding value for the closest comparable region.These few estimations require that the results are interpreted with some caution.The main focus is on six socio-economic indicators: (1)Female proportion, (2) Life expectancy, (3) Infant mortality, (4) Tertiary education, (5) Disposable income,and (6) Dependency ratio. The dependency ratio is defined as the proportion of the population unemployedor outside the labour force. Our set of indicators islarger than those included in the Human DevelopmentIndex (HDI) used by the United Nations.These six indicators are presented in six-pointed radarshaped diagrams for the Arctic regions in figures 2.1to 2.8. In these graphs, the more of the total area thatis covered, the more favourable are the indicators interms of human development. The six indicators weretransformed to indices on a scale from 1 to 10, where1 represents the least favourable and 10 represents themost favourable condition for human development. Forexample, the highest disposable income was attributedthe relative value of 10, and the lowest was attributedthe relative value of 1. In the case of the female proportion, the value closest to the universal value wasattributed the relative value of 10.Economic and human development:Main resultsTable 2.1 gives an overview of the absolute valuesof the set of socio-economic indicators for the Arcticregions, presented in geographical-alphabetical order.It also gives a composite index, which is the average of13

The Economy of the North 2008Economic and social conditions of Arctic regionsTable 2.2. Arctic regions, by socio-economic patterns. 2006ModelTypical patternsAlaska“North American model”Northwest TerritoriesFigure 2.1Yukon“Scandinavian model”Figure 2.2“Russian model”Figure oe sYamal-NenetsDependency ratioFemale proportion109876543210Life expectancyNortwestTerritoriesInfant mortalityDisposable incomethe six main indicators.7 At first glance, it appears thatthe optimal conditions are found in North America, andthen in the Scandinavian countries, while the minimalconditions are in the Arctic region of the Russian Federation. However, in order to interpret major regionaldifferences, it is useful to consider the six main indicesin a graphic analysis, as explained in the followingfigures.The graphic analysis of the main indices leads to theobservation that there are three typical models of socioeconomic patterns, suggesting three main groups ofArctic regions. These general patterns correspond moreor less to the social and political divisions of the Arcticregions: “The North American model”, “The Scandinavian model”, and “The Russian model”. Table 2.2shows how the Arctic regions are distributed betweenthe three typical models, and indicates some variationswithin the main models.“The North American model” represents a patternwhere generally all the socio-economic indices havehigh values. Figure 2.1 shows the results for two suchregions: Alaska and the Northwest Territories. Disposable income is at its highest circumpolar level, while thefemale proportion is somewhat lower.“The Scandinavian model” represents a pattern wherethe female proportion, life expectancy, infant mortality and tertiary education are near their highest values,while disposable income and dependency ratio are nearthe average values. Figure 2.2 shows the results forthree of these regions: Troms, Västerbotten and Lapland.“The Russian model” represents a pattern where generally all the socio-economic indices have the lowest values for the socio-economic variables. Figure 2.3 showsthe results for three of these regions: the Arkhangelskand Murmansk Oblasts, and the Republic of Komi.14Figure 2.1. Main indices of economic and social conditions,Alaska and Northwest Territories, 2006AlaskaTertiary educationFigure 2.2. Main indices of economic and social conditions,Troms, Västerbotten, Lapland, 2006Dependency ratioFemale proportion109876543Vaster- 2botten10LaplandDisposable incomeLife expectancyInfant mortalityTromsTertiary educationThe regions that represent these three general modelscover two thirds of the Arctic territory and have 77 percent of the population.There are, in addition to these three typical models, acertain number of variations.The regions Nunavut and Labrador (Figure 2.4) as wellas Nunavik represent a variation of the general NorthAmerican model: a dependency ratio and educationlevel well below average, and somewhat lower disposable income than in Alaska and the Northwest Territories in Canada.The Faroe Islands and Greenland (Figure 2.5) representa variation of the general Scandinavian model: lowervalues for the female share of the population and fordisposable income. In Greenland, there are also lowervalues for the other socio-economic indices, except forthe tertiary education, where the level is closer to theNorth American and Scandinavian regions.

The Economy of the North 2008Economic and social conditions of Arctic regionsFigure 2.3. Main indices of economic and social conditions,Murmansk, Komi, Arkhangelsk, 2006Dependency ratioFemale proportion1098765432Komi10Life expectancyFigure 2.6. Main indices of economic and social conditions,Yamal-Nenets, Khanty-Mansii, 2006Dependency ratioYamalNenetsArkhangelskFemale proportion10987654321Khanty0MansiiLife expectancyMurmanskDisposable incomeInfant mortalityDisposable incomeTertiary educationTertiary educationFigure 2.4. Main indices of economic and social conditions,Labrador, Nunavut, 2006Dependency ratioInfant mortalityFemale proportion109876Labrador543210NunavutLife expectancyFigure 2.7. Main indices of economic and social conditions,Chukchi, Nenets, 2006Dependency ratioFemale proportion1098765Nenets 43210Life expectancyChukchiDisposable incomeInfant mortalityDisposable incomeTertiary educationTertiary educationFigure 2.5. Main indices of economic and social conditions,Faroe Islands, Greenland, 2006Dependency ratioFemale proportion109876543210Infant mortalityLife expectancyFigure 2.8. Main indices of economic and social conditions,Evenk, Koryak, 2006Dependency ratioFaroeIslandsFemale proportion10987654Koryak 3210-1Life expectancyEvenkGreenlandDisposable incomeInfant mortalityTertiary educationDisposable incomeInfant mortalityTertiary education15

Economic and social conditions of Arctic regionsThe different regions of the Russian North represent several variations of the general Russian model.Yamal-Nenets and Khanty-Mansii have higher valuesfor almost every socio-economic variable (Figure 2.6).Chukchi and Nenets (Figure 2.7) have considerablyhigher disposable income, higher dependency ratio andhigher infant mortality. Evenk and Koryak (Figure 2.8)have slightly higher disposable income, higher dependency ratio and higher infant mortality.The regions that represent these variations from thethree general models cover one third of the Arctic territory and have 23 per cent of the population.These results indicate that there are indeed generalmodels of socio-economic structure, but that there arealso major regional variations. For each of the threegeneral models, we will, in the following discussion, tryto characterize the economic structure and the redistribution mechanism associated with the three modelsand their variations, in order to interpret the observedsocio-economic patterns. The power relationships between the social actors, in particular when they involveethnic or indigenous minorities, will be consideredbefore finally discussing our central question: How doeseconomic development influence human developmentin the circumpolar Arctic regions?Thule, Greenland. Photo: Scanpix16The Economy of the North 2008“The North American model”: The neob X[hWb h[] c[ Wj j [ bWij \hedj [hiHigh revenues, little redistributionA closer look at some characteristics of petroleum andmining activities in Alaska and Canada can help usunderstand the first general model, corresponding towhat has been called the neo-liberal regimes at the lastfrontiers for resources exploitation. 8 In order to removeobstacles to resource exploitation, it was necessaryto reconsider the status of areas earmarked for environmental protection and for subsistence activities ofindigenous and other rural residents. In some casesconflicts were resolved by profit-sharing, ensuring apart of the resource revenues from the petroleum andmining industry to the native peoples.9The first general model presented, “The North American model” comes close to this description. Highdisposable income is secured in particular by the highsalaries of the extraction industry. Income tax paidby individuals is relatively low. However, services forensuring the living conditions of residents (education,health, social services, housing) are largely the responsibility of individuals or local communities. Redistribution of wealth through social policies may be perceivedas weak, in the sense that national redistributionregimes have been modified by a gradual dominance ofthe neo-liberal economic view and a diminishing role

The Economy of the North 2008Economic and social conditions of Arctic regionsArctic Canada, Igloolik. Photos: Mary Stapletonof the State.10 These regions nevertheless enjoy a levelof basic services that has made it possible to greatlyreduce infant mortality and maintain high life expectancy. The provision of widespread educational servicesin these regions is quite recent. There are major variations in the schooling levels actually reached, particularly deficient among young native men.11The share of women in the population is below theoptimal value; it varies between 48.5 per cent in Alaskaand 49.7 per cent in the Yukon (Table 2.1). At the locallevel, this proportion is perhaps even lower.12 It maynot be explained by the desire of young rural womento go to high school, as they may attend high schoolalmost everywhere, also in small villages. The deficitin the proportion of women is rather explained by theoutmigration of young native women, motivated by thedesire to find employment to their liking.13 As a consequence, the dependency ratio is slightly lower, partlyalso explained by the inflow of single workers to theextraction industry of these “last frontiers” regions.14The integration of native peoples and theirc

Economic and social conditions of Arctic regions The Economy of the North 2008 Standard economic theory suggests that economic growth trickles down in society, inevitably increasing general well-being and living conditions. Amartya Sen argues that, in practice, this is not necessarily the case. He describes development “as a process of expand- ing the real freedoms that people enjoy .

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