Foreign direct investment in Alaska: without question, FDI plays a critical role in the state's economy. In addition to their direct capital investments, these companies also contribute significantly to the communities where they operate through payrolls, taxes, procurement of supplies and services, and civic contributions.

• Author: Wolf, Greg
• Position: Company overview

International trade is big business for Alaska. In 2005, the state's worldwide exports reached $3.6 billion, a solid 14 percent increase from the previous year, and marking the third consecutive year of double-digit growth. The continuing global boom in commodities, driven by the economic advances of developing countries like China and India, as well as the growing appreciation and demand for the state's wild caught seafood products, promises to keep Alaska's export engine in high gear.

Exports and other international business are relatively more important to Alaska than to other states. While Alaska ranks 40th overall in export volume compared with the other states, on a per capita basis Alaska ranks fourth and when measured as percentage of the Gross State Product (the sum of all goods and services produced in a state in a given year), Alaska ranks eighth. At current levels, exports of goods and services account for approximately 10 percent of the state's economic activity.

Clearly, exports play an important role in the Alaska economy. Export industries in the state are also responsible for thousands of direct and indirect jobs, often relatively higher paying ones than those tied solely to the domestic economy.

INVEST HERE

But exports tell only a part of Alaska's international story. Investment by the U.S. affiliates of foreign companies in the state's major industries is significant and growing. According to the U.S. Department of Commerce, cumulative Foreign Direct Investment (FDI) in Alaska totaled $30 billion in 2002, the latest year that statistics are available. This ranks Alaska 12th among the states as a recipient of FDI. The Commerce Department also reported that employment by foreign companies (U.S. affiliates) operating in Alaska accounted for some 13,000 jobs.

Foreign companies have funded many of the state's largest development projects completely, or in part, via partnerships or joint ventures. These investments are important not only because they generate tax revenues and create jobs for Alaskans, but also because they are a tangible vote of confidence in Alaska as an attractive place to do business. In many cases, companies have a choice of where to direct their investment dollars. When they invest them in Alaska, they are expressing confidence in our stable business environment, the opportunity for profitable operations, and in the quality of the state's work force.

BP LEADS WAY

The largest contributor of FDI in Alaska is...