Thinking About Alaska’s Remote Economies Prepared for Village Management Institute June 2003 Steve Colt Institute of Social and Economic Research University of Alaska Anchorage

Our Fragile Alaska Economy: Real Income Growth Since 1990

Changes in “Basic” Jobs during 90s

Key Features of the Economy of “Rural-Bush Alaska” (Marshall / Rogers 1999) Alaska Natives in the majority Lack of Agriculture Mixed cash /non-cash economy For these reasons, models from Lower 48 may not work….

Other Key Elements of Alaska’s Remote Economies Off the highway network Off the utility grid Difficult environmental conditions (For some --) Far from ocean transport (For some --) Not well connected to Internet

Example: Fuel Cost per kWh: Anchorage vs. Remote Alaska

Still Other Key Elements of Alaska’s Remote Economies Part of the United States economy Part of the global economy Part of the United States

Alaska looks more like US over time

But, Remote Alaska does not look more and more like Urban Alaska

Change in W&S Employment during 1990s

Remote Alaska vs. Entire Alaska Alaska Economic Trends October 2000

Remote Alaska vs. Average Alaska Alaska Economic Trends October 2000

Remote Alaska is Different

There are Many remote economies! Maritime Alaska Interior Alaska Southeast Alaska North Slope Borough

Wage and Salary Employment

Maritime Alaska – A Fading Star? (Closed Ward Cove Cannery, Craig)

Our Fragile Economy: Farmed salmon dominates world markets

Value of Alaska salmon is down

Shifting Exports in Southeast

OK, So What? How can village leadership respond to these challenges? Will the future be like the past?

Capitalizing on What’s Different Local knowledge of wild places Capitalizing on government Matching people to jobs –Utility operators Capitalizing on Infrastructure Needs (?) Exporting human resources

Why do People Visit Alaska Why do People Live in Alaska?

Bristol Bay Wildlife Refuges: 20,453 visits (1996)

Bristol Bay Wildlife Refuges: $2.4 million visitor expenditure (1997)

Visits Expenditures Bristol Bay NWRs

Capturing the Value from Tourists The Potential: –Average AK $ per person per trip? –$1,258 in 2001 –Of which, how much on gifts/souvenirs? –$119 –how much on Alaska Native arts/crafts? –$92 –How much on clothing? –$58

Capitalizing on What’s Different Stewards of wild places Capitalizing on government Matching people to jobs –Utility operators Capitalizing on Infrastrcture Needs (?) Exporting human resources

Three Kinds of Infrastructure: Physical – generators, wind turbines, roads, schools Human Capital – people with the right skills in the right place at the right time Social Capital – communities and utilities that work together to sustain the electric system All three are worth investing in!

A Critical Point about Physical Infrastructure: Capital cost usually paid by others, – but, O&M cost usually paid by local people –So, Key question: Does this new infrastructure decrease or increase the O&M cost and/or general cost of living?

Two Types of Infrastructure: Example New Swimming Pool –Could cost $30,000 per yr to heat New Wind Generators –Could reduce the cost of diesel fuel

Rural Projects and Jobs Much or most rural project money flows immediately to urban areas Example (weatherization): About 75% of weatherization project dollars flow to urban areas. (weatherization)

Capitalizing on What’s Different Local knowledge of wild places Capitalizing on government Matching people to jobs Utility operators Capitalizing on Infrastrcture Needs (?) Exporting human resources

Are you willing to export people? This is a social question –However, There is a tradeoff – projects that support a place may be different from investments that develop human skills and potential….. This is a very tough question facing remote places today

We’re all in this together.