Business/Economy

U.S. Treasury Secretary talks finance and economic diversity in Alaska

En route to Japan for a meeting of G-7 finance ministers and central bank governors, U.S. Treasury Secretary Jacob Lew made his first official visit to Alaska to discuss the state's economic climate with business and community leaders here.

Lew spent Wednesday morning in Anchorage in meetings with Mayor Ethan Berkowitz, Lt. Gov. Byron Mallott, and representatives from Alaska banks, oil companies, Alaska Native corporations, nonprofits and other organizations. They talked about issues surrounding economic diversification and financial inclusion — that is, making sure Alaskans have access to financial services such as checking or retirement savings accounts, and that people know about opportunities for starting businesses.

"I think that the issues that we discussed at the round table with community organizations made it clear that for many Alaska citizens, they don't feel that financial institutions are a place that they're comfortable going to," said Lew.

He added that because of Alaska's massive geographic size and because of how remote much of the state is, it might be particularly useful to connect people with financial services they can use online.

"For so many people," he said, "just having access to the broadband gives them that capability."

One of the services Lew touted was myRA, a retirement savings program the Treasury Department recently launched, targeting people who might not have access to a workplace retirement fund or don't have enough money to meet the requirements of a private program.

Lew and community and business leaders also discussed diversification of the state's economy, which has become especially important as low oil prices have led to a state budget deficit topping $4 billion. The state has long relied on oil to generate most of its revenue.

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"It's a reminder of the vulnerability that's associated with that," he said. "A lot of discussion about how the downturn in the extractive industries had spillover effects into associated (industries)."

State and private entities in Alaska have been talking about ways to diversify the economy here and rely less on the oil industry, but any efforts that eventually swing into action would take years to make a noticeable shift.

In Anchorage, some efforts to make sure people are financially literate and have access to financial resources — including capital for businesses — are already taking shape.

This summer, Berkowitz said, the city will survey people who are new to Anchorage, particularly in the Mountain View neighborhood, to analyze their skillsets and try to connect them with business opportunities.

"There's a lot of people out there who have a lot of good ideas, who are willing to work hard, grow businesses, take risks," he said. "Those are the people we need to get more engaged in the economy. Connecting budding capitalists with capital is a critical piece of making sure that an economy prospers."

Annie Zak

Annie Zak was a business reporter for the ADN between 2015 and 2019.

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