IN Newfoundland, where only 20 of the province's 800 villages are located inland, transforming the economy from one traditionally based on fishing and natural-resources is proving difficult.
In 1990, Newfoundlanders' earned income was only 60 percent that of other Canadians. Unemployment was twice the rate of the rest of the country.
Newfoundland's plight worsened last year when Canada imposed a moratorium on fishing northern cod. Fish stocks were depleted by overfishing, and, possibly, a drop in water temperature and an abundance of predator seals.
``All these communities [in Newfoundland] ... came into existence and have continued to exist over 400 years solely for the purpose of fishing,'' says Newfoundland Premier Clyde Wells, who visited Boston recently.
Mr. Wells says he hopes to find advocacy ``within the United States for Canada's position - that it will have to take action to protect the fish stocks off the coast of Newfoundland ... and to put in place a system of custodial management for the stocks being fished by other nations just beyond the 200-mile limit.''
While Newfoundland is restricted, European vessels continue to fish just outside Canadian waters. ``There are the same fish stocks that occur within the Canadian zone on the Canadian continental shelf,'' Wells says. ``It's irresponsible.''
Newfoundland is looking in other directions to boost its economy while the fish stocks replenish - a process that could take a decade. ``Their need is economic opportunity,'' Wells says. ``And this is where the responsibility of the government of the province and the government of the nation comes in - to try and generate or provide alternative employment.''
The Hibernia oil field off Newfoundland's east coast, for example, is expected to contain as much as 1 billion barrels of oil. Wells sees the field as one source of jobs for ``Newfies.'' So far, construction on the oil field has provided 3,000 jobs, Wells says, as well as other indirect employment.
Oil production is expected to begin in 1997. But the costly project has been racked by controversy, losing some of its original investors, who were later replaced. The recent drop in oil prices, if it is sustained to 1997, would make the project less economic. There is also exploration for oil on the west coast of Newfoundland, both on and offshore.
Tourism will help pick up some of the economic slack, Wells says. The government is promoting Newfoundland's ``pristine'' environment, salmon fishing, hunting, hiking, and skiing.
``There's so few of us, even we couldn't spoil the environment,'' Wells says. With a population of 580,000 (smaller than the City of Boston), Newfoundland occupies an area larger than New England.
THE Newfoundland government has proposed dividing the province into 17 ``economic planning zones'' to facilitate development. New economic activity, such as manufacturing, mineral exploration, and information technology, probably cannot be carried on in every one of the fishing villages, Wells says. But these opportunities will eventually be available in more centralized locations, he adds.
``It's not a rational objective for government to seek to generate greater economic activity in every single one of 800 communities,'' Wells says.
Another proposal for ``foreign trade zones'' is also in the planning stages. These customs- and tax-free zones would create more jobs, Wells says. Goods could be imported and exported freely and would promote the manufacture of more diversified products.