Gov. Mike Dunleavy and many in the House majority continue to bring up Scandinavian countries as models to emulate in terms of resource development — Swedish timber, Norwegian oil and gas, etc. And yes, there are many parallels between Alaska and Scandinavia in terms of our geographic locations, sovereign wealth funds and resource-based economies.
What these politicians do not mention is that in these democratic socialist countries, the distribution of resource wealth is fundamentally different. Whereas Alaska has no statewide taxes, the tax-to-GDP ratio of Scandinavian states is nearly 50%. Additionally, while Alaska throws billions in tax incentives to Texan and Australian corporations, Norway is a majority shareholder in Equinor (formerly Statoil), their state-owned oil company.
The profits from Scandinavian resource development therefore largely go to their citizens via a massive welfare state; Sweden’s public- sector spending is approximately three-fifths of its GDP. There are also other differences between the Scandinavian countries and Alaska. The vast majority of employees in Scandinavia are unionized. Seventy percent of Swedish workers are unionized, and 90% of workers’ wages are determined via collective bargaining agreements.
These fundamental differences — high taxation, aggressive public-sector spending, powerful unions, and state ownership of resources — are why these countries have some of the highest standards of living in the world.
All of this is to say, turbocharging resource development in and of itself is not going to make Alaska prosperous, especially if the only people profiting from this resource development are Outside corporations. If our leaders do not insist that the state of Alaska receive a major share of its resource wealth, we will only continue to enrich Texans while bearing the financial and environmental costs.
If you’re going to invoke Scandinavia, you also have to understand fully why these countries succeed.
— Steve Robertson
Anchorage
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