June 16, 2001 The Anchorage Daily News on the state's economy

Posted: Tuesday, July 17, 2001

Alaska's business and political leaders got some sound advice from an unusual source last week. Lt. Gen. Norton Schwartz, the highest-ranking military officer in Alaska, hasn't been here long, but his speech to the World Trade Center Alaska showed he's already an astute observer of the Alaska scene.

Gen. Schwartz's fundamental point was dead on: Alaskans need to rethink prevailing attitudes and conventional wisdom about the state's economic fortunes.

It seems that Alaskans think ''someone else is responsible for making it all happen,'' he said, ''whether it be the congressional delegation or big oil. There's a widely held conviction that someone else is taking care of it.''

The long-term keys to growth -- the kind that will build a better future for our children and grandchildren -- are competitiveness in a global economy, entrepreneurial ingenuity, careful planning and long-term investment. The big question is how public- and private-sector initiative can be combined to reach these development goals. If we do not succeed, the next decades will look too much like the 1990s, when more than 90 percent of Alaska's growth arose from Permanent Fund dividends and federal spending.

The general was too kind to say that Alaskans have a colonial mentality, but that's what it amounts to. There's a lot of complaining about obstacles imposed by distant forces when instead Alaskans should seize realistic initiatives where we have greater influence over outcomes.

One example the general mentioned is education. He urged Alaskans to ''make school systems, at every level, so attractive they encourage families to come here and stay.''

Quality of life is another asset Lt. Gen. Schwartz discussed. Investing in neighborhoods and promoting affordable, conveniently located housing are indeed important strategies. Alaska's unmatched environmental appeal and quality of life, coupled with a top-notch educational system, could make the state a magnet for high-skilled workers and intellectual value-added activity.

The general questioned how long Alaska can continue to depend on its two biggest economic engines, federal spending and oil extraction. He noted that Alaska is a state that ''resists taxation but expects a slice of the federal pie year in and year out.'' The general was too polite to say this too, but here's another key fact: U.S. Sen. Ted Stevens' powerful voice for federal spending in Alaska is a tremendous asset today, but he won't be there forever.

As for oil, Alaska doesn't bag as much easy money as it once did, but the culture of dependence lingers. The general felt compelled to warn the business audience that ''oil community dollars should not be viewed as a birthright or a safety net.''

The point is not to repudiate our current economic foundations but to build upon them. The federal government and the oil industry have dominated Alaska's economy for decades. They remain our economic mainstays and the launching pads for future growth. But often those two sectors are buffeted by forces that Alaskans can do little about. If we are smart, we will follow the general's advice and leverage our current, relatively privileged position in those sectors into new achievement and competitive success in others.



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