Problem

Unstable economic base

Other Names:
Dissipating economic base
Archaic economic base
Incidence:

The economy of some small communities may be based on one industry or activity, for example, mining. If in this case the mines are closed, the majority of the people may leave within months. If a number of residents, rather than deserting the town entirely, are determined to rebuild the community around new industries and business, then they face a number of difficulties. Agriculture and forestry may be looked at anew as basic industries. Profitable farming is difficult, because the products pass through many hands between the farmer and the consumer, and new techniques are only slowly obtainable. The closing of the mines means that local markets are even smaller than they once were; and external markets are competitive and over-powering. Government-organized forestry and reforestation may be a possible resource for the future, but few townspeople have skills in this field.

The unclear economic future discourages the use of what savings may have been accumulated by individual families before the mines closed. Many may feel the only solution is to seek employment and business development elsewhere. The task of renovating basic facilities to attract outside investments seems enormous. Services decrease and public buildings, such as schools, remain underheated. Development momentum virtually comes to a standstill and town income declines.

Problem Type:
D: Detailed problems
Related UN Sustainable Development Goals:
GOAL 8: Decent Work and Economic Growth
Date of last update
03.06.2019 – 22:06 CEST