Forthcoming economic strategy takes a look at plan for Alaska

A coalition of state and business leaders is working on a five-year economic strategy for Alaska.

The strategy is not the first — individual regional economic development organizations around the state have developed local ones, including a Kenai Peninsula Comprehensive Economic Development Strategy released in 2016. However the scope this time around broadens to the entire state and will include quantifiable benchmarks, said Ethan Tyler, development manager with the Alaska Department of Commerce, Community and Economic Development.

The effort leverages a $100,000 planning grant from the federal Economic Development Administration and was officially launched during the Alaska State Chamber meeting in Kenai last October.

“What our hope is, at the (Alaska) Department of Commerce, is to build a roadmap,” Tyler said during a presentation to the Kenai Chamber of Commerce on Wednesday. “The roadmap identifies where we’ve been, it identifies where we are and it identifies our best path moving forward.”

The point of the strategy is to give the state actionable goals to strengthen its economy, drawing on input from the public gathered in meetings conducted in communities around Alaska and from industry leaders who sat on a strategy board of about 35 members. Planners have drawn significantly from work done during a 2010 economic strategy effort called Alaska Forward that aggregated significant research but ran out of funding before goals were developed, Tyler said. This plan will set goals and have metrics to measure success in those goals, he said.

In addition, the strategy has to include the concept of resilience, or the ability to avoid, withstand and recover from negative impacts to the economy. In Alaska, major vulnerabilities include the state’s nearly total dependence on oil for its budget and potential impacts of climate change, for example.

Part of the process also included a survey of current economic conditions. Although the state is still in the midst of an economic recession due in large part to lower oil prices, it’s a different ballgame today than it was during the last large recession in 1988, Tyler said. The survey results the researchers gathered support this.

For one, when researchers asked why people live in Alaska, nature and environment topped the list of responses, followed by family and people.

“To me … and other economists, that’s one reason this is not an ’80s-style recession,” Tyler said. “What we’re seeing is people have a lot more roots here. People were born and raised here. They have family here. There’s more reason for them to be here than in the past.”

Around the time of the 1980s recession, the population was also more concentrated in the middle of the age range; today, it is more distributed across the age ranges. People mostly came up for jobs in the 1970s and ’80s, while now more people have been born and raised in Alaska and many have family who live in the state for non-economic reasons, Tyler said. The economy is also more diversified than it was in the 1980s, though the state government’s budget and much of its infrastructure still depends disproportionately on oil wealth.

Another misconception about the current recession is that it started abruptly in 2014, when oil prices plunged. That’s not the full picture, Tyler said — it actually started declining around 2012, when the gross state product began to decline, due in part to falling oil production and drops in other commodity prices.

What respondents to the survey primarily wanted to see was economic development, as well as a cheaper cost of living and travel. Within economic development were needs like infrastructure and energy, Tyler said, which will be included in the goals the strategy will set out.

With all the information gathered, project managers hope to have a strategy draft completed by mid-April, he said. Right now, it’s fairly inward-looking — seeing what can be improved about Alaska — rather than examining how to bring more industry and development to the state, though that is certainly an issue that has come up during the discussions at the strategy board, Tyler said.

Every year after the strategy is finalized, the state will review it and reconsider the goals and actions as necessary, he said. If the state is failing to meet the benchmarks, it could mean an adjustment to either the actions the state is taking or to the goals themselves, Tyler said.

“Our hope is that the strategy that’s created includes a lot of private-sector folks,” he said. “…We’re working on public-private partnerships that as a part of this strategy, we can identify partners and actually assign tasks to people to help us with that.”

Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com.

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Michael Bishop 3 months ago
It started when the brain trust in the legislature thought deficit spending at $140 per barrel was sound fiscal policy. Throw in SB 21 and a downturn in oil prices  and wham, you have a perfect storm the likes of which we are just beginning to feel, similar to the outer bands of a catastrophic hurricane. Baton down the hatches and get your survival suit ready! They have blown thru $17 BILLION since then and now are raiding the Permanent fund after not inflation proofing it for the last two years. This hullabaloo now is subterfuge as they try to run out the clock and devastate the economic future of this state after their gone. 
Earl Richards 3 months ago
Alaska does not need a five year economic strategy. This will give the GOP and their oil cronies another five years to plunder the PF and the budget reserve. Alaska needs to replace SB 21 with ACES.

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