Group seeks commitment to economic progress

Posted: Friday, June 14, 2002

In a state where the economy is dependent upon a slowly declining natural resource, where else can Alaskans look to find economic sustainability?

Jaimie Kenworthy, executive director of the Alaska Science and Technology Foundation, asked the audience at the Soldotna Chamber of Commerce noon meeting Tuesday to consider this and other similar questions. Kenworthy was on the Kenai Peninsula representing the Alaska 20/20 program.

Funded by grants and donations and sponsored by the Alaska Humanities Forum, the 20/20 program is a coalition of organizations and individuals that have come together in the past few years to analyze Alaska's economic future.

Since its public launch in November 2001, Alaska 20/20 has created five broad vision statements that speak to varying elements of the state's future viability. For example, not only is economic sustainability addressed, but so are natural resources, safe communities, quality education and public services.

Kenworthy acknowledged that the vision statements are written in a "high-level of abstraction," but Alaska 20/20 is now in the process of engaging groups around the state so people can on a more regional level, identify what the vision and goals are for that area, he said.

Alaska 20/20 is not in the business of trying to solve problems in individual communities, it is instead trying to act as a catalyst for regional leaders to combat problems and issues in their own areas, said Kenworthy in an interview after his presentation.

Alaska 20/20 is actually not in business at all. The program is made up of 60 partner organizations from which individuals volunteer their efforts and expertise in an attempt to identify what Alaskans need to do in order to make Alaska economically sustainable in the future.

While the program has only been officially organized for seven months, various economists had been meeting regularly to discuss the economy of Alaska for at least two years previous, according to Kenworthy.

At this point in the process, representatives, like Kenworthy, are traveling around the state as part of an outreach to communities, which will soon need to take an active role in the program for it to become a viable solution, he said.

"We are reaching an increasing consensus. The next step is to engage communities in the problem."

The problem, as Alaska 20/20 identifies it, is multi-faceted. One aspect lies in the fact that Alaska now depends upon the oil industry for 43 percent of its economic base, including revenues and the Alaska Permanent Fund.

That means Alaska is more dependent upon natural resources than any other state, Kenworthy said.

"What can we do to bring more money into the state?" he asked the audience. "Economic development is really about bringing new money into the state of Alaska."

Even if oil prices and production hit the same boom they did in the 1980s and early '90s, the money would still just be circulating through the state in different ways, no new money would enter Alaska's economy, Kenworthy said.

"In a world of declining oil that is not what we call market sustainable," he said. "That is the challenge we are trying to address."

Not only is Alaska 20/20 trying to highlight the problems, but it also is attempting to create benchmarks with which communities and the government can analyze progress toward the visions and goals outlined in a final form at another conference scheduled for April 2003.

Kenworthy outlined several potential goals the Kenai Peninsula Borough could aim for. He mentioned shellfish, forest products, tourism, seafood and drilling all as examples of industries that could be looked at and streamlined or built upon to create a more sustainable economy.

"We are never going to be low-cost manufacturers," he said in response to a question from the audience. "I am not disagreeing with that. This is a challenge, but some people are succeeding in the manufacturing market because of a strong commitment to quality."

He also spoke to the "brain drain" issue that has become a catch phrase in the gubernatorial races of U.S. Sen. Frank Murkowski and Lt. Gov. Fran Ulmer. Kenworthy used the example of University of Alaska Fairbanks, which has a nationally recognized computer science program but has until the last few years lost every one of its graduates to IBM and the Silicon Valley.

"We are fighting a two-front war in a sense. While we upgrade the quality of what our educational facilities produce, we don't capitalize on the talent we've invested in," he said.

Graduates may leave the state because while Alaska is growing in the field of technology at a faster rate than some other states, it started off from a much smaller and later base than other states, Kenworthy said.

This is in part due to the extent to which Alaska depends on its natural resources. It isn't as much having the natural resources, said Kenworthy, it is more how they are used. Nationally, states like California with little or no natural resources have a much higher gross state product than states like Alaska that pride themselves on their abundance of natural resources.

In addition, jobs that are disappearing with the decline of the oil industry are being replaced with service industry jobs that generally go hand in hand with lower wages, Kenworthy said.

"The health of those sectors," he said referring to service industries like tourism, "depends on bringing more money into the state."

"We have to come to terms with the decline of Prudhoe Bay ... and engage Alaskans in what goals we want for the future."

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