Mayor Mark Begich comments
2008 AEDC Investor Lunch
Noon; Jan. 30, 2008; Egan Center

Thanks to Bill Popp for your introduction. And thanks to Brian Nerland for chairing AEDC and opening our meeting today.

As you’ll hear from Bill in a few minutes, Anchorage has just completed our 19th consecutive year of job growth. I expect to stand on this stage a year from now and talk about an even 20 years.

That accomplishment belongs to the people in this room, especially those who have led and supported AEDC. We’ve worked together as a community. Teamwork pays off. Thank you for helping bring a generation of prosperity to Anchorage.

Most of us who have been around here a while know that two decades of steady growth is unprecedented in Alaska. In the previous century, our economic history was boom and bust.

Today, we can see the result of economic stability all over Anchorage - in:
• Business confidence;
• Community stability;
• Investment in education and infrastructure;
• And a deeper commitment to our community.

I’d like to think we could keep doing the same things and get another 20 years of steady growth. Imagine coming to the AEDC investor lunch in 2028 and hearing it all over again.

But we know that’s not how the world works, in business or in life.

In 2008, we’re in a time of dramatic and fundamental change in our state, our nation and the world.

Change is happening on every level:
• In technology;
• In the field of environment and resources;
• In economics;
• In the way people live and work, as our speaker Rich Karlgaard has written in his fascinating book.

And, as has been clear for more than a year, we’re in a period of dramatic change in politics as well.

We can keep doing things the same way, but that won’t stop change from coming. To continue to excel as a community, we need to anticipate change and use it to our advantage.

The pivot point is right now. This year – 2008 - we need to think about where we want to be in 10 years and 20 years, and how we want to get there.

In 10 years, today’s real estate and stock market volatility hopefully will be a distant memory.

Any 300-dollar rebate for economic stimulus will be long forgotten.

In 10 years, Anchorage still will be Alaska’s center for trade, the military and medical services.

Alaska’s resources will still drive big projects that supply the world.

The rise of China and India will mean Alaska energy and mineral reserves will be worth much more in 10 years than they are now.

The CEO of Royal Dutch Shell predicted last week that world oil demand will exceed supply in just seven years.

Ten years ago this month - in January 1998 - oil was under $15 a barrel. We’re six times higher now. Ten years from now, I’m sure oil will cost much more than it does now.

As we continue to develop oil and gas and energy prices rise, the state government has every opportunity for ample revenues 10 years from now.

Global demand for resources such as lead, zinc, copper and other minerals that Alaska has in abundance continues to rise.  Ten years from now, Alaska’s minerals will have a much larger role in the world economy.

The Permanent Fund is projected to be $68 billion in 2018.

In 10 years, we’ll be using more alternative energy and we’ll be using it much more efficiently in Anchorage. The price and environmental concerns will make that happen.

But we’re also going to see stress from the rising cost of energy. Our economy relies more than most on energy use, including international air freight, tourism, the military and regional trade.

Even our role as Alaska’s medical center depends on affordable travel. In addition, 10 years from now we’ll have a new system of paying for health care, and that may reduce growth.

And it’s already clear our relationship with Uncle Sam will change. I’m just back from the U.S. Conference of Mayors conference in Washington, D.C. And it’s clear that we as a state need to work on improving our image because I heard some say we’re both spoiled and corrupt.

In 10 years, we’ll need a more mature relationship to the federal government—which means justifying spending and participating in the nation with solutions, not just wants.

So, as we look 10 years out, we’re not in trouble yet. But at that point the future is bleak if we haven’t prepared for the following 10 years.

We’ll need to be ready with new industries and opportunities. And we’ll need new ways of doing business politically. Twenty years out, a lot can happen.

Twenty years ago, you may not have had a computer on your desk. You’d never heard of email. At City Hall, we were trying to get the Municipal Clerk to start using a fax machine.

Twenty years from now, Anchorage still has a role as a geographic center, but what that means may have changed entirely due to technology.

People may travel less. Communications may make a lot of travel unnecessary.

The alternative fuel that comes after oil may be very expensive. Converting to a new infrastructure may cost even more.

In 20 years, our state government may have a huge Permanent Fund and hopefully, a gas pipeline producing windfall revenues.

In other words, we may be living on a rich past. But when our grandchildren look for jobs, what will they do? Collecting a Permanent Fund check isn’t a career.

That’s a lot of consider, and probably a lot of it won’t come true. But here’s one thing I think we should be able to agree on:

If the industries for growth are not in place in 10 years, our economy will be declining in 20.

As you all know, I’m an optimist, and I think this is a challenge we can meet and use to our advantage. We have the resources, we have the economic foundations, and we have the spirit of Alaskan enterprise.

Looking to the future is what Alaska is all about.

Thanks to the people in this room, Anchorage got on the ground floor of the air freight and the health care industries before those sectors went through dramatic international growth.

So what’s could be the vision? I only have time for some quick bullets, so let me plant some ideas.

On energy - we have renewable energy resources second to none. Imagine a geothermal power plant next to the volcanoes of Cook Inlet producing energy-intensive products or hydrogen fuel for export.

Imagine growing our gas reserves and the industrial base that relies on them. Let’s commit to a robust Cook Inlet exploration program and developing the jobs-rich uses for the gas we’ll find.

On technology - Alaska has immense resources for sequestering carbon dioxide. When a carbon-trading scheme starts in the United States, we can create a huge and lucrative new industry.

The knowledge economy. The most valuable workers in the future will create intellectual property and it won’t matter where they live. If we build the infrastructure in our educational institutions and quality of life, they’ll come here.

The federal relationship. The biggest employer in Anchorage is the active duty military, more than 11,000 strong. The second biggest employer is the civilian federal payroll, another 10,000. Adding National Guard and Reserves adds thousands more. We need these jobs.

We must create a new relationship. One of equality and fair share. We need to begin to earn the support that our state deserves.

Here’s an example. We’ve created a model in Anchorage for welcoming our military.

Our efforts at City Hall would take a separate speech to describe, ranging from the First Lady’s Military and Family Support Initiative, to the Warrior Transition Unit. We even sell the military their electricity.

The bottom line is: we’re making this the best community for servicemen and women to be stationed in, and the best place for commanders to run a base.

As another way of giving back in the federal relationship, I created a task force within the U.S. Conference of Mayors to export these ideas to the communities. I just returned from that work in Washington, D.C.

Senator Stevens’ Denali Commission is another example of something we’re doing right that can be exported.

In the future, other states may question why we have a Denali Commission and they don’t. Before those questions get too loud, I want to export that idea to underserved rural areas all over the United States. It works and it would work anywhere rural poverty is holding back Americans.

Alaska has so much to give the rest of the country. When we stand up and begin to spread those ideas and best practices, our relationship with the federal government will become stronger and more mutual.

Two decades have of steady growth have passed. We’re in a good place economically. As leaders, let’s begin to look over the horizon to where we want to go next. Thank you.


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