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
email steve_colt@uaa.alaska.edu
Our Fragile Alaska Economy:
Real Income Growth Since 1990
$78
LABOR
INCOME
INVESTMENT
INCOME
$251
GOVT
TRANSFERS
(INC PFD)
-$500
$813
$0
$500 $1,000$1,500$2,000$2,500$3,000
Millions of 1998 $
Changes in “Basic” Jobs during 90s
-6,000
-4,000
-2,000
0
2,000
2,340
1,390
5,080
890
SEAFOOD
420
MINING
380
1,810 OIL AND GAS
TIMBER
FED CIVILIAN
MILITARY
6,000
4,600
TOURISM
AIR CARGO
4,000
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
10
9
cents per kWh
8
6
4
2
0
2
Anchorage
high-wind communities
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
Employment Mix by
Census Class of Worker
100%
80%
60%
40%
Self
20%
Govt
Private Wage
0%
AK 1990
AK 2000
ANCMatSu
US 2000
• But,
• Remote Alaska does not look more
and more like Urban Alaska
Change in W&S Employment during
1990s
35,000
30,000
25,000
20,000
15,000
10,000
5,000
0
-5,000
Urban
Maritime-non- Maritime-mixed
native
Maritime-
Interior-
Native
Native
Wage and Salary Employment
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
100%
90%
80%
70%
60%
other
50%
trade svcs
40%
govt
30%
20%
10%
0%
Anch
Alaska
POW
Wade-Hamp
Maritime Alaska – A Fading Star?
(Closed Ward Cove Cannery, Craig)
Our Fragile Economy:
Farmed salmon dominates world
markets
World Salmon Supply
2,000
1,800
1,400
1,200
Other Wild
Alaska
Farmed
1,000
800
600
400
200
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
0
1980
thousands of metric tons
1,600
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)
fishing
hunting
vis. Ctrs
other
Bristol Bay Wildlife Refuges:
$2.4 million visitor expenditure
sportfish
sport hunting
incidental
nonconsumptive
(1997)
Visits
Bristol Bay
NWRs
fishing
hunting
vis. Ctrs
other
Expenditures
sportfish
sport hunting
incidental
nonconsumptive
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.
www.iser.uaa.alaska.edu