Economic development

Indigenous populations in the Arctic

Map shows location of main indigenous peoples in the Arctic and the percentage of indigenous peoples in the Arctic areas of Arctic states

Source: CAFF 2001

Fishing, tourism, the fur trade, arts and crafts are traditionally important commercial activities in the Arctic, and an estimated 26 per cent of the jobs in Alaska depend on a healthy environment (Colt 2001). The economies of Greenland, the Faeroe Islands, and Iceland are dependent on fishing and fish exports (AMAP 1997) which account for 75 per cent of Iceland's exports (CIA 1998b). The fur industry crashed in the 1970s due to animal rights protests, and European and US bans on marine mammal products (Lynge 1992).

Tourism is increasingly important to Arctic economies. Summer tourist visits to Alaska doubled in the 1990s, reaching almost 1.2 million in 1999 (ADT 2000) and accounted for 3 per cent of Alaska's gross state product in 1998 (Goldsmith 1999). By 1999, tourism brought annual revenues of US$30 million to Nunavut and almost US$1 000 million to Alaska (State of Alaska 2001).

Exploitation of petroleum resources has fuelled economic growth in the Arctic nations. Nearly 85 per cent of Alaska's budget comes from oil revenues (State of Alaska 2001), and further developments are planned. Oil development has expanded to offshore Alaska, and exploration is occurring on the shelf of the Faeroes as well as in the Norwegian sector (Bjorsvik 2000). Oil and gas resources are developed in several regions of the Russian North, of which West Siberia has been assessed as the world's largest petroleum province (Klett and others 1997). Exploration in Northern Canada, the site of half of the country's estimated petroleum potential, has been revitalized in recent years (DIAND 2001).

Mining is another important economic activity for some countries. Alaska's mining industry was valued at more than US$1 000 million/year during 1995-2000 (Knowles 2001a). Gold, lead, zinc and diamond production continue to be important to the Canadian Arctic (BHP Billioton 2002). Lead and zinc mining has ceased in Greenland (Taagholt and Hansen 2001) but a new gold mine has started test production. Russia's Norilsk mining complex was the world's largest nickel producer in 1997 (Norilsk 2002).