ISER’s Mouhcine Guettabi  told attendees at  the Alaska State Chamber of Commerce’s Fall Forum in Fairbanks, “The future of Alaska economic development will rest on the success of the traditional basic sectors and the pursuit of new opportunities. Most importantly, it will depend on whether the state can address its leaky bucket by ensuring that more of the value generated in Alaska stays in state.” This, Guettabi said, will require “ensuring there is a qualified workforce that can take advantage of employment opportunities.”

line graph showing unrestricted general fund petroleum revenues from 1975 to 2018 with adjusted and not adjusted for inflation linesGuettabi compared Alaska with other oil-dependent states, most of which have recovered from the drop in oil prices.  “It is important to separate revenue diversification from economic diversification,” he said, adding, “The recent decision to use the earnings reserve to fund a portion of government should make the state revenues more resilient to future oil price declines. The Alaska disconnect will eventually need to be addressed.”