Southeast Alaska economics: A resource-abundant region competing in a global marketplace

Questions related to economics figured prominently in the priority information needs identified in the 1997 Tongass Land Management Plan. Follow-on studies in economics were designed to improve understanding of aspects of the competitiveness of the Alaska forest sector, links between Alaska timber markets and other markets as evident in prices, and the relationship between resource allocation decisions and economic conditions in communities and the region. Analysis of the role of recreation and tourism in the regional economy was added to the topics addressed, based on early results of work to describe economic dynamics. Comparisons are undertaken to evaluate the economic changes taking place in southeast Alaska, to analyze the sources of these changes, and to determine if and why they differ from the changes taking place at larger scales and those occurring in a similar rural and resource-abundant region. Divergent views regarding the current role of the Tongass in the regional economy are summarized and assessed by using contemporary evidence. A variety of factors contribute to comparative and competitive disadvantages for the forest products sector in southeast Alaska. Alaska product and log markets are effectively integrated with other markets supplied by producers in British Columbia and the Pacific Northwest. Empirical evidence suggests the need to re-examine assumptions regarding the relation between changes in “basic” sector activities and employment (such as timber harvesting and wood products manufacturing) and “nonbasic” (or support sector) employment in the rural communities of southeast Alaska. Many of the changes occurring in the economy of rural southeast Alaska are driven by changes in the international markets in which Alaskan products compete, and are largely independent of Tongass forest management. Unearned income and tourism have replaced resource-extractive industries as the principal sources of income growth in the region. The contribution of the Tongass National Forest to the regional economy has become more complex and difficult to quantify. Forest management policies that enhance the comparative advantages the region enjoys in providing both tourism opportunities and quality of life attributes will aid communities in maintaining and expanding their economic opportunities.