Sovereign wealth fund and a remote island
Little Diomede, a remote U.S. island in the Bering straits only 2.5 miles from Russia, has 129 people living in a traditional Ingalikmiut Eskimo village.
On an island surrounded by rocky slopes and harsh storms with the sea frozen for half a year, employment is limited to the city and school whereas seasonal mining, construction and commercial fishing positions have been on the decline.
At least 25 percent of resource-related revenues are placed in the fund, which invests its assets of over $34 billion in a diversified portfolio of public and private assets. Currently their asset allocation consists of 38 percent in stocks, 22 percent in bonds, 12 percent in real estate, 6 percent in private equity and 2 percent in cash.
Alaskans enjoyed the highest-ever dividend of $3,269 in 2008 when a one-time $1,200 Alaska Resource Rebate was added, at a time global markets were tumbling with the collapse of Lehman Brothers. But in 2009, the dividend fell sharply to $1,305.
For Little Diomede villagers, the fall in dividend must be a blow. The fund may need to make a lot more profit to finance a possible mega-infrastructure plan: according to the village website, some residents are interested in relocating the village, due to the rocky slopes and harsh storms, lack of useable land for housing construction, and inability to construct a water/sewer system, landfill or airport.
(Photo: The island of Big Diomede in the morning mist on the Russian side)