SitNews - Stories in the News - Ketchikan, Alaska


Native seed money produces growth in Alaska
Anchorage Daily News


June 25, 2007

Six years ago, John Oscar created dance fans and driftwood masks in the only space he could find -- an arctic entryway in Mekoryuk, Alaska -- bundled against the cold in snow pants, insulated boots and a thick jacket.

Now he's created a virtual micro-industry in the Western Alaska village, with seven artists working for him in a heated studio. Mekoryuk's unemployment rate is 20 percent -- more than four times the national average. The $10-$15 an hour many employees earn goes a long way, he said.

"Even $100 is a lot," he said. "They pay account bills in stores, maybe buy fuel for heating and maybe give $20 for Mom or Dad. It just spreads around, and that's what's desperately needed in rural Alaska."

Key to his business success, Oscar says, is an Alaska Federation of Natives contest designed to improve the economy in rural Alaska, where lack of roads to urban areas, high prices and few customers push poverty and unemployment rates among the nation's highest.

The Alaska Marketplace competition, modeled after a World Bank program, sprinkled $500,000 across the state in its first year last spring. The money went to would-be entrepreneurs who wanted to create jobs while preserving cultural traditions.

Twenty-two Alaskans -- out of 156 applicants -- each pocketed $50,000 or less to launch ventures such as caribou migration tours, a sport sled manufacturing operation, and skin-care businesses using glacial silt or tundra berries.

The Marketplace is more than just an effort to get cash and ideas to villages, said Julie Kitka, AFN president.

"We're trying to change mind-sets so that anyone in the state will know that starting a business can be within their reach," she said.

The prize money last year, a mix of government grants and private donations from oil firms and other companies, went to the winners with no strings attached.

That's changing this year, organizers said. The money -- as much as nearly $1 million to be handed out in October -- will come with mandatory reporting and other requirements, such as using Marketplace consultants. The deadline to submit a basic idea is Thursday.

According to a voluntary survey completed by 16 winners last fall, it's clear there's been a range of success. Two-thirds of the respondents said they were experiencing challenges. But nearly half had opened for business and hired employees.

Parts of rural Alaska are among the nation's poorest areas, with most cash and jobs coming from welfare assistance or other government support, said Neal Fried, a state economist.

The Wade Hampton census area in Southwest Alaska, including Chevak and 12 villages along the lower Yukon River and delta, had the nation's highest unemployment rate in 2006, at 20.7 percent, Fried said. The national unemployment rate is 4.6 percent, he said.

A small customer pool, gasoline prices exceeding $5 a gallon and remote locations that make goods and services costly mean that startup businesses in rural Alaska are especially risky ventures, said Lee Huskey, University of Alaska Anchorage economics professor.

The competition helps reduce that risk, but its greatest value is providing examples for future entrepreneurs of what worked, he said.

Oscar, the Mekoryuk artist, said he matched the $21,000 he won with money from art sales. He built a studio from a little-used community meeting hall, using lumber and windows recycled from other buildings to save money.

He hired five part-time adults to help craft his designs. They earn between $10 and $15 an hour. Two high school students make $7.50 an hour.

The employees carve driftwood into small masks and other symbols, paint, assemble frames and etch walrus ivory or reindeer antlers.

The most profitable pieces, he said, are mixed-media paintings, many featuring traditional dancers waving three-dimensional feather fans or wearing spirit masks. He's sold about 300 pieces of art in the last year, including some over his Web site,, he said.

If he makes enough money, one day he hopes to create similar studios in other villages.

"God gave us a talent, and when we die we won't take our riches with us," he said. "If I didn't use my talent to help others, I wouldn't have gained anything."

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Stories In The News
Ketchikan, Alaska