Good news on economic front

Development's purpose not to fund government, but a better quality of life

Posted: Sunday, January 04, 2004

One-third of Alaskans are under the age of 20. They are 210,000 members of the next generation for whose future we must prepare. We have an obligation to provide our young people with options in life and productive outlets for their energy and talents.

Economic development of Alaska's plentiful natural resources has been and will continue to be the driving force of our economy. My administration is working hard to assure there will be new, high-paying jobs and opportunities available for the next generation.

The financial benefits to Alaska's economy are enormous. Our $27 billion permanent fund is a direct result of building infrastructure to access the valuable resources on Alaska's North Slope.

Another example is the state-funded access to the Red Dog mine, the largest zinc mine the world. It is the economic engine of the North-west Arctic Borough and provides one out of every seven jobs in the region.

Economic development in these rural areas of Alaska has allowed borough governments to form and generate local revenues. This reduces the burden on state and federal governments to provide local social services and elevates a region's level of self-sufficiency.

I am encouraged by the strong Native and community leadership in the Bristol Bay region. After being hit hard by a decline in the fishing industry, local leaders are taking responsibility for their future and are re-evaluating the benefits of oil and gas development in their region. They recognize that successful production will diversify the region's economy, lower the high cost of energy, improve the quality of life and provide jobs for local residents.

Recent news articles suggest upcoming development projects, such as the Pogo mine near Delta Junction, will not provide economic benefits to state or local governments. This suggestion is inaccurate and shortsighted.

Canadian and Japanese companies are partnering to invest $250 million in capital to open Pogo. To date, they have invested nearly $100 million in Alaska. This new money from foreign sources enters Alaska, then circulates and multiplies throughout our economy.

The Alaska Department of Natural Resources estimates the direct economic benefits to the state from developing Pogo to be nearly $10 million. Additionally, if the mine is profitable, the companies will be paying tens of millions more in corporate income taxes, mining taxes and royalties.

The Pogo mine is expected to create nearly 700 jobs during construction and 360 full-time jobs during production. It's annual payroll of $25.4 million will support average salaries of $66,000. Workers for these projects will buy homes and contribute to their communities through local sales and property taxes.

An additional 600 indirect jobs are expected to be created in Delta and Fairbanks to support mine activities.

New jobs also result in cost savings to government, if those jobs are filled by Alaskans who were previously unemployed and were receiving benefits from government programs. To achieve this result, in mid-November, I announced a new initiative to encourage local companies to set a goal of 90 percent Alaska hire.

Social problems diminish as people get good-paying jobs. Social problems with extremely high government costs, such as substance abuse,

domestic violence and other crimes are often directly related to unemployment and to people losing hope. Courts, public defenders, jails and treatment centers are all expensive costs to government to combat these social ills.

That's why the best social program is a good job.

Our pursuit of economic development is not to fund government, but rather to ensure Alas-kans and our children have jobs and a quality standard of living. Government revenues are a result of a successful economy, not its purpose.

We already are starting to see the beginnings of positive changes taking place in our economy. The Department of Labor reports 3,400 new jobs were created in the first nine months of 2003. This is an excellent start and we expect job expansion to continue.

My commitment to Alaskans is to work hard to facilitate career opportunities for Alaskans and hope for our youth, so their future will be productive and prosperous, and they can choose to remain here and raise the next generation of Alaskans.

Frank Murkowski, a Republican, was elected governor in 2002.



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