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.