Diversification important to economic growth: native corporations, like the Permanent Fund Corp., have investments outside that bring dollars back to Alaska.

• Author: Poe, Bob

Alaska has been following the same economic model for more than 250 years.

Since the very first non-indigenous peoples arrived in Alaska in 1741, an economic model was established that is followed to this day. These early visitors quickly recognized that Alaska was rich in natural resources. They also realized--if they could extract these resources and find a way to bring them to market-they could take the profits back home. Furs were first; gold, fish, timber and oil followed over the next 100 years. Yes, many of these industries have made significant capital investments in Alaska, and they have often hired Alaskans to do the resource extracting. But in the end the resources were extracted and the profits left Alaska.

Tourism follows this model, when you consider cruise ships plying Alaska waters are essentially using Alaska's vast natural beauty to sell passenger seats and return the profits to their corporate home offices. And most recently, companies like Federal Express and UPS follow this Alaska economic model by extracting a truly inexhaustible Alaska resource, our strategic geographic location. Certainly the air cargo companies have made huge investments in Alaska and they employ thousands of Alaskans, but still their profits return to Memphis, Tenn., or Louisville, Ky. Don't get me wrong, air cargo is an outstanding industry for Alaska and one that Alaska should continue to strongly support. Personally, I am an avid booster of the air cargo industry. In the late '80s, I had the privilege to lead the state of Alaska's team to lure FedEx and UPS here.

Recently though, an important and growing sector of our economy has been quietly reversing this Alaska economic model. Alaska Native corporations are establishing a completely new economic model that may offer our state great opportunity in the future. In addition to their investments in Alaska, they have been building a wide array of profitable investments Outside and returning those profits back home.

Native corporations weren't the first to adopt this economic model; the Alaska Permanent Fund Corp. led the way. Under the "prudent-investor rule," the Permanent Fund Corp. requires exacting investment criteria be met in order to be an acceptable investment for the Permanent Fund. In fact, and this is sometimes a sore subject, the Permanent Fund has very few investments in Alaska--just three commercial real estate investments. Many have argued that the Permanent Fund should be invested...