Out of the articles we read this week, I found Globalization of the Circumpolar North to be most interesting, given the large-scale overview of Northern economies. As someone who has very little background in economy or business, this article was the best for me to get a broad understanding of the situation in the Arctic. The concepts of the large-scale international economy and the small-scale local economy as well as their interplay forming the basis of Northern development, is very important. For one thing, it captures the duality of the Arctic which has historically had some of the biggest resource bonanzas but also has a very prevalent subsistence and local economy. It also encapsulates much of the conflicts of development in the North, as they often have to do with international economy and industry encroaching on small-scale economies such as reindeer herding, subsistence hunting, and fishing.
One thing I found particularly important, that was done well in this article, was the discussion of a geographic dimension that should certainly be covered when discussing Arctic economy. The geographical location of a Northern economy influences important factors such as which resources are present, conflicts that can occur, and government approaches to developing Northern resources. For example, not all places in the Arctic have an equal economic impact, or both a strong international and local economy. Some, such as Northern Russia, account for two-thirds of all circumpolar economic activities, the majority of this being industry such as petroleum extraction and mining. Within Northern Russia, the larger city centers account for most of the international economy, while smaller population centers have a strongly developed local economy with hardly any international impact. This pattern holds true for most other Arctic states as well. Another geographical factor that influences an Arctic region’s economy is the state that it belongs to, in terms of resource management approaches or government subsidies. Differed states have varying degrees of environmental protection and some are much more focused on Northern resource extraction than others. Additionally, governments in some Arctic states offer subsidies which help offset high costs of resource production in the Arctic, allowing the region to more competitively participate in the global economy. This way, the country that an Arctic region belongs to plays a large role in the nature of its economy.
The division of the Arctic economy into large and small scale sectors goes a long way to understanding the development of the region as a whole and is an important concept in Arctic economics. Additionally, the geographic context of a particular Arctic location plays a large role in its economy and results in variance across states and communities. These two concepts seemed to be the most important to me in this reading.