The formal economy is characterized by the dominance of the primary sector in the industrial economy, with significant large-scale natural resource exploitation activities. In some cases the transfer sector is sizeable, some northern local governments are highly dependent on the annual transfers from central governments. Most northern residents also rely on the traditional or subsistence-based sector to provide for some of their material well-being. The exclusion of the informal economy is a major weakness considering the importance of informal activities in many parts of the Arctic.