Problems of a failing economy?

Question

I'm writing fan-fiction for the superhero serial novel Worm. The main setting in Worm is Brockton Bay, a failing city of about 300,000 people. The economy has been in decline since the decline of shipping through Brockton Bay. I assume manufacturing has also fallen as well. The people of Brockton Bay are largely poor, and superpowered gangs are in control of large sections of the city. (A side note for manufacturing: Japan in this story has been destroyed by a kaijuu, and China is a closed economy.)

The economy of Brockton Bay is not all bad, however. There is a section of the city that is fairly rich due to tourism. The city has the most superhumans per capital, and attracts people on that basis.

What economic problems are likely plaguing this fictional city? How would you solve them?

Edit: A bit more detail on economic problems:

The justice system is corrupt. The two major gangs are White and Asian. The White gang is well-organised, the Asian gang not so. I imagine the White gang holding on to wealthy suburbs and charging protection fees.

The education system is likely failing, so a good segment of the population is illiterate.

Unemployment is high, which feeds into the gangs. Probably 20%? I'm basing this off of Detroit unemployment rates.

Due to Japan being devastated, and China becoming a closed economy, there are a lot Asian immigrants. Some are rich, some are poor. The poor Asians are used illegal as cheap labour to support unproductive manufacturers.

That's all I can think of right now. As for more specific questions, I'd ask: How would you develop infrastructure, when the city is broke? Which infrastructure do you prioritise? How would you fix the justice system? The education system? On which do you prioritise your energies?

How do you create more jobs? Do you use macro policies? Or targeted policies? Do you implicitly encourage illegal immigrant labour? Or regulate working conditions? How do you improve productivity?

Edit: Property rights, tourism and superhumans as human resources

The police don't want to involve themselves in superhuman gangs. They're corrupt anyway. The superheroes are severely outnumbered, and probably don't want to pick a fight unless they have to. How do you enforce property rights then?

There is an implicit agreement not to use too much force against each other, otherwise the superheroes will hammer down on them full force. So tourism isn't too much affected. There is also implicit agreement not to touch the tourism areas.

Superpowers are generally small scale. Potentially useful powers such as creating technology are limited by lack of replicability.

Answer 1

One important source of income for both gangs would be drugs, as the market for all kinds of drugs would proliferate very easily in a settings where a small niche of richer people would access the "good stuff", while the poorer would be enslaved by opiates, and as well provide cheap and unscrupulous manpower, and additionally with the aid of a corrupt system.

In a place like that, even a good part of tourism would probably be the sex&drugs type, with the gangs providing both (I see the asian having predominance in the former).

But even in a place where the justice system is corrupt, money coming from sex and drug markets has to be laundered. What better business to easily lander money than infrastructure and building? The white mafia would own construction businesses, winning all local government tenders for infrastructure, with the help of bribes and just because it could work just for any price (and yet, the cheap desperate manpower would provide profits actually); and, too, building skyscrapers and lodging for the tourists, generating an induced economy of small-business from which collect more protection fees; and why not casinos?

On the other side of city, where the poor people lives, is a sparse proliferation of favelas/slums, where the micromarket of drugs is handled by pawns, and police itself will collect protection bribes. In the asian slums, people would play lotteries where you can eventually win a job position as waiter, or get a body part ripped away.