RDC says federal, oil money won't last

Posted: Thursday, February 14, 2002

Making Alaska less dependent on government and oil spending is important to maintaining the state's economic stability in the long run.

This is the message Alaska Resource Development Council Executive Director Tadd Owens has been delivering around the state.

"Selling goods and services into the market is the only way to provide long-term economic security," Owens said in a presentation made to the Kenai Chamber of Commerce earlier this month.

"Alaska faces a closing window of opportunity to broaden its economic base beyond oil and federal spending."

He pointed to a list of factors that could lead the state to economic peril in the not-so-distant future.

"There are a lot of things going on right now in Alaska that have the potential to negatively impact economic growth of the future," Owens said. "Whether that's the fiscal gap, lower oil prices, or lower federal spending if and when we finally lose congressional seniority."

In particular, he said ever-waning oil resources and the eventual end of Sen. Ted Stevens' term in Washington could drastically affect the money coming into the state. He said more than 70 percent of the state's economic base is generated from these two sources.

Owens said alternatives from private sector businesses could be found within the state and cultivated to increase the money flowing into Alaska from selling services and goods throughout the world.

The only paths to grow state wealth, he said, were to expand exports and replace imports. He identified mining as one resource that had experienced significant growth and is viable on the world market.

An Alaska State Department of Labor report showed that between 1990 and 2000, mining dollars coming into the state had more than doubled, growing from $59.7 million to more than $122.8 million.

Only oil processing experienced a similar growth.

Replacing imports, Owens said, means keeping Alaska money inside the state to purchase available resources like graded Alaska lumber and shell fish.

Owens said a secondary goal is to foster coordination of the various governmental and community-driven economic development plans around the state.

"The Kenai region is a great example of the need for coordination," he said. "There are large communities on the peninsula, each with different economic strengths and weaknesses. There are a host of different parties interested in economic development."

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