Post on 31-Dec-2015
description
Thinking About Alaska’sRemote Economies
Prepared for
Village Management InstituteJune 2003
Steve ColtInstitute of Social and Economic Research
University of Alaska Anchorageemail steve_colt@uaa.alaska.edu
Our Fragile Alaska Economy: Real Income Growth Since 1990
$813
$251
$78
- $500 $0 $500 $1,000$1,500$2,000$2,500$3,000
Millions of 1998 $
LABORINCOME
INVESTMENTINCOME
GOVTTRANSFERS
(INC PFD)
Changes in “Basic” Jobs during 90s
1,810
5,080
1,390
2,340
380
4,600
890
420
-6,000 -4,000 -2,000 0 2,000 4,000 6,000
TOURISM
AIR CARGO
SEAFOOD
MINING
OIL AND GAS
TIMBER
FED CIVILIAN
MILITARY
Key Features of the Economy of “Rural-Bush Alaska”
(Marshall / Rogers 1999)
• Alaska Natives in the majority• Lack of Agriculture• Mixed cash /non-cash economy
• For these reasons, models from Lower 48 may not work….
Other Key Elements of Alaska’s Remote Economies
• Off the highway network• Off the utility grid• Difficult environmental conditions• (For some --) Far from ocean
transport• (For some --) Not well connected to
Internet
Example: Fuel Cost per kWh: Anchorage vs. Remote Alaska
2
9
0
2
4
6
8
10
cent
s pe
r kW
h
Anchorage high-wind communities
Still Other Key Elements of Alaska’s Remote Economies
• Part of the United States economy• Part of the global economy• Part of the United States
Alaska looks more like US over time
Employment Mix by Census Class of Worker
0%
20%
40%
60%
80%
100%
AK 1990 AK 2000 ANC-MatSu
US 2000
Self
Govt
Private Wage
Change in W&S Employment during 1990s
-5,000
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Urban Maritime-non-
native
Maritime-mixed Maritime-
Native
I nterior-
Native
Wage and Salary Employment
There are Many remote economies!
• Maritime Alaska• Interior Alaska• Southeast Alaska• North Slope Borough
Wage and Salary Employment
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Anch Alaska POW Wade-Hamp
other
trade svcs
govt
Our Fragile Economy:Farmed salmon dominates world
marketsWorld Salmon Supply
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2,000
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
thou
sand
s of
met
ric
tons
Other Wild
Alaska
Farmed
Value of Alaska salmon is down
Wholesale Value, Ex-Vessel Value, & Processing Margin After Adjusting for Inflation: All Alaska Salmon
0.0
200.0
400.0
600.0
800.0
1000.0
1200.0
1400.0
1600.0
1800.0
Note: "Processing Margin" = First Wholesale Value - Ex Vessel Value
FirstwholesalevalueEx-vesselvalue
Processingmargin
OK, So What?
• How can village leadership respond to these challenges?
• Will the future be like the past?
Capitalizing on What’s Different
• Local knowledge of wild places• Capitalizing on government• Matching people to jobs
– Utility operators
• Capitalizing on Infrastructure Needs
• (?) Exporting human resources
Bristol Bay Wildlife Refuges:$2.4 million visitor expenditure
(1997)
sportfish sport hunting
incidental nonconsumptive
Visits
Expenditures
fishing hunting vis. Ctrs other
sportfish sport hunting
incidental nonconsumptive
Bristol Bay NWRs
Capturing the Value from Tourists
• The Potential:– Average AK $ per person per trip?– $1,258 in 2001– Of which, how much on gifts/souvenirs?– $119– how much on Alaska Native arts/crafts?– $92– How much on clothing?– $58
Capitalizing on What’s Different
• Stewards of wild places• Capitalizing on government• Matching people to jobs
– Utility operators
• Capitalizing on Infrastrcture Needs• (?) Exporting human resources
Three Kinds of Infrastructure:
• Physical – generators, wind turbines, roads, schools
• Human Capital – people with the right skills in the right place at the right time
• Social Capital – communities and utilities that work together to sustain the electric system
• All three are worth investing in!
A Critical Point about Physical Infrastructure:
• Capital cost usually paid by others,– but,
• O&M cost usually paid by local people– So, Key question:
• Does this new infrastructure decrease or increase the O&M cost and/or general cost of living?
Two Types of Infrastructure: Example
• New Swimming Pool– Could cost $30,000 per yr to heat
• New Wind Generators– Could reduce the cost of diesel fuel
Rural Projects and Jobs
• Much or most rural project money flows immediately to urban areas
• Example (weatherization):• About 75% of weatherization
project dollars flow to urban areas. (weatherization)
Capitalizing on What’s Different
• Local knowledge of wild places• Capitalizing on government• Matching people to jobs
• Utility operators
• Capitalizing on Infrastrcture Needs• (?) Exporting human resources
Are you willing to export people?
• This is a social question– However,
• There is a tradeoff – projects that support a place may be different from investments that develop human skills and potential…..
• This is a very tough question facing remote places today
We’re all in this together.
www.iser.uaa.alaska.edu