Alaska Dispatch

Alaska's economic future is in trouble.

The state's economy is stagnating as the national economy grows, and it's expected to remain stalled through the next decade if no one takes action, Michael Catsi, president of the Alaska Partnership for Economic Development, told legislators at a hearing Friday in Anchorage.

Alaska's per capita income is expected to fall compared to the national average, with 10 years of decline anticipated under current conditions.

The state's main economic driver, the oil industry, isn't looking so shiny without major new developments on the immediate horizon. Output from producing fields may drop by as much as two-thirds by 2030.

And while jobs are increasing in number, they're decreasing in quality, netting a decline in income that, if allowed to continue unchecked, will mean a hit to Alaskans' quality of life.

"There's been talk for many years that the state needs a comprehensive economic development strategy," Catsi told the House Committee on Community and Regional Affairs.

Frustrated by the state's fractured efforts at boosting individual sectors, like Alaska-made products, film production and seafood, Rep. Alan Austerman, R-Kodiak, called the meeting to present his staff's research and steer colleagues toward solutions that could come in the form of legislation during the next session, which begins in January.

"You've got a fairly well-balanced amount of wealth being generated on our natural resources, but it all funnels out the door," Austerman said. "It funnels down south ... If we're nothing but a resource export state, then that's all we're ever going to be."

Alaska isn't short on economic development efforts, Austerman noted, but within state government, the efforts and funding fall short of a coordinated effort with input from the private sector. He added that state efforts often blur community development -- a true government function -- with economic development, something that should be driven by the private sector. Yet private sector representation in state economic development is lacking, Austerman said. Of the stage agencies that deal with economic development, only the Alaska Industrial Export Development Authority has two board members from the private sector.

"Economic development is creating wealth," Austerman said. He added that he's not talking about assistance programs like low-interest loans for the fishing industry and a state office geared toward attracting film production. "They don't bring new wealth into the state of Alaska. It's hard for me to determine exactly what type of economic development is going on."

Support can't come too soon, according to the early findings presented by Catsi.

Catsi's organization, the Alaska Partnership for Economic Development, is a coalition of regional economic development groups that secured a $500,000 grant from the Denali Commission to study the issue and craft a comprehensive strategy.

While each region has its own strengths and challenges, most share some qualities that can be addressed at a broad level, Catsi said. Economic development must focus on strengthening the industries that have the potential to bring new money into Alaska. The new money is then circulated through other sectors, which further strengthens the economy.

The Alaska Partnership for Economic Development's plan is expected to guide lawmakers, state government and local and regional economic development entities. The group's first phase of work is a situational analysis, expected by the end of January, that takes stock of Alaska's economic situation as a baseline for future efforts.

Feedback from 75 stakeholders involved in industry and economic development offered what Catsi called a surprising degree of consensus: Alaska lacks strong statewide leadership and coordination of resources, tending to focus on natural resource development as the sole opportunity for building the economy. Barriers are plentiful, and include the high costs of energy and transportation, as well as stiff federal regulations.

Yet Alaska has promise in research and development, cold climate-related technology, a well-educated workforce and low taxes.

Gov. Sean Parnell is committed to building the economy, and has a subcabinet group working on the Legacy Plan announced by former Gov. Sarah Palin earlier this year, said Susan Bell, who represented the governor's office at the hearing.

"We're really well poised to move forward with the discussion you're starting today," Bell told legislators. "(Parnell's) main goal is to preserve the private sector input, elevate it, and be very nimble in how we move forward."

Contact Rena Delbridge at This e-mail address is being protected from spambots. You need JavaScript enabled to view it .

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