COMMISSIONER THOMPSON: It's 11:34. Is there anybody else to testify? Mr. McDowell?
(Pause.)
MR. MCDOWELL: Is this the preferred microphone?
MR. SHIVELY: Doesn't make any difference.
MR. MCDOWELL: Thank you, ladies and gentlemen. My name is Peter McDowell. I'm the Principal of Strategic Development Services, a management and economic consulting firm based in Juneau.
It's a pleasure to be here and listen to the eloquent testimony of the preceding speakers. I would like to just call your attention to a couple of fundamentals about the Alaskan economy that I believe have more to do with Native economic development than the rest of this state; and these are that several of us, including Commissioner Thompson and I, worked on a commission that started in 1985, and it continues to this day called the Alaska State Chamber of Commerce Commission on Strategic Planning for the 1990s.
In the mid-Eighties, we spent two years studying the Alaskan economy and making recommendations for improving it and expanding it. I believe the recommendations are still valid; and I hope that Commissioner Thompson will supply your entire task force and Commission with copies of our final report.
The essence of our report -- and forgive me if I'm getting too far into Economics 101 -- the essence of our report was that the Alaskan economy is best viewed as an -- through the lens of the export base model. And that literally means -- or figuratively means that you should think of the Alaskan economy as an island with a wall around it. And that the only things that are fundamentally important to the economy are those things that we can send out, or export, for which other people will send in money.
And very simply, today we export a handful of tangible things. We export oil; coal; other minerals; timber; fish; furs, to some extent; and liquid nat -- liquified natural gas.
We also export our geo-political location. The primary customers for that are the United States military; the air transport industry; and, to some extent, the marine transport industry. There's a little bit of breaking bulk going on at Unalaska, I understand, in the marine field. But the fact is that we are well located, and it makes it very efficient for transportation companies to stop in Alaska and switch things around to maximize their profits and minimize their costs.
We also export scenic and recreational resource values to a lot of folks, primarily Americans from the Lower 48, These values are sold under the names of tourism; guiding, as was mentioned by one of the previous speakers; and other recreational activities; or just looking.
In our report, we recommended that all of these basic industries continue to be supported, promoted, and expanded to the extent possible. They are the Alaskan economy. Nothing else is important. All other economic activity, including government, retail, you name it, is secondary. And if there is no basic economic activity, there is no secondary activity; so, without the exports, there's no economy.
We did recommend that some additional exports be looked at. We noted that, in addition to the tangible items I've listed, we already export the intangible export of investment capital. We send out billions of dollars of investment capital to other places, and they send us back interest and dividends. Every -- virtually every corporation in ANCSA has a permanent fund of some kind. That ' s investment capital that you export to the -- primarily the Lower 48 and the world financial markets; and they send back interest and dividends. The Alaska Permanent Fund is an export of financial investment capital; and they send us back dividends.
In addition, the newest area that we barely export today is intellectual capital; and I would commend to each and every one of you; and all of the other people involved in the Alaskan economy, that the most -- the lowest impact export on our environment that we could possibly have is intellectual capital. It's the toughest one to get to, because you must educate your people and all of our fellow Alaskans. We must become better educated and smarter, or nobody's going to buy it. But let me assure you, we talked about, for example, the export of software development; and we said:
"Why can't we have people sitting in their homes,
for that matter. All you need to export computer software is a brain, a telephone,
a modem, a personal computer, and a roof over the other four. And that's
it. No other capital is required."
Intellectual capital is the most efficient way to export; and without -- but without the education required to develop it, we'll never get there. We export a little bit now; but there isn't much; and I would strongly suggest that, in your corporations and foundations, that you please look very carefully, encouraging and facilitating the ability, especially of your younger people, to go straight through elementary school, high school, the university, and graduate school; because without all of that, you can't export an ounce of your brain; but with all of that, you can, in fact sit anywhere you want in the state of Alaska, in the smallest, most remote village is fine, and export your intelligence and your intellect; and people from the rest of the country and the rest of the world will be delighted to send you money for it.
So, let me, again, ask that you review the work of that commission. As I say. Commissioner Thompson is a. member, along with Doctor Soboleff, and Mr. Huhndorf from the ANCSA community; and I commend the report to you and ask that you study it; and, if you agree, please make in available to your entire audience. Thank you very much.
COMMISSIONER THOMPSON: Thank you, Peter. Any question from the Commission members? We will make sure that that report gets over here as well. I'll make sure of that. If not, thank you for your testimony.
MR. MCDOWELL: Thank you.
COMMISSIONER THOMPSON: Is there others wishing to testify?
(Pause.)
A.J., if you can't get a word at home in, this is an opportunity. He has to listen to you here.
(Laughter.)
And it'll be on the record. He does have to listen here.
MR. SHIVELY: Let me assure you, I have to listen at home, too, Morris, as you probably know yourself. I'll bet you do all the listening at home.
(Laughter.)
COMMISSIONER THOMPSON: If there's no further testimony, the -- for those that might be interested, the Governance Task Force will be at 1 o'clock this afternoon. We do thank those that have testified for their testimony and their help with the work that the Commission has to do. We appreciate your interest and being here; and if no one else testifies, we'll close the hearing at 11:42. Thank you.
(Off record at 11:42 a.m.)
***END OF PROCEEDINGS***
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