It is neither an Arab oil nation nor a Latin American debtor. It is the state of Alaska, a forgotten victim of America's slide toward cheaper oil.
With so much attention focused on the Southwestern "oil patch," which includes Texas and Oklahoma, the effects of cheap oil on Alaska "have been largely overlooked," said William C. Clarkson, an analyst at the New York securities firm of McCarthy, Crisanti and Maffei.
However, those who have looked see a stark and worrisome picture.
According to Don Walls, chief economist in the regional group at Data Resources Inc. (DRI), the economic forecasting firm, cheaper oil through 1990 will hurt Alaska much more than it will hurt Texas, Louisiana or Oklahoma.
"The magnitude of dollars is greater in those states, of course," Walls said. "But when you look at the concentration of the impact, you see that Alaska has a small base, a small population, and it is getting hit real hard."
Unemployment in Alaska was already at 10.5 percent by the end of 1985, compared with a national rate of just over 7 percent.
As part of a national survey to be released in New York tomorrow, DRI calculated that an oil price of $10 a barrel through 1990 would push Alaska's unemployment rate as high as 11.5 percent before a damaging exodus of workers stalled its climb.
That oil-price level would push per-capital income in the rest of the nation up 2 to 3 percent by 1990, and would leave per-capital income in Texas roughly unchanged.
But with movements of one or two percentage points considered dramatic in the calculations of per-capital income, DRI estimates that $10 oil would cut per-capita income in Alaska by 7.5 percent - a decline that would be "the worst in the nation," Walls said.
The immediate effect of cheaper oil on Alaska's state revenues is equally dramatic - and, given the state's underwriting of major construction projects, potentially damaging to the overall economy.
In a report to Alaska Gov. Bill Sheffield last month, revenue commissioner Mary A. Nordale warned that "the oil revenue outlook for Alaska . . . is potentially devastating."
Fed by its oil income, Alaska's state revenues grew sharply from $1.1 billion in the 1979 fiscal year to $4.1 billion in 1982. Then revenues tapered off slightly to almost $3.3 billion in the 1985 fiscal year, which ended in June.
As recently as January, the state had expected to collect revenues of about $3.1 billion by the time the 1986 fiscal year ended in June. But in mid-March, Nordale's staff cut that 1986 estimate by more than $403 million, to $2.7 billion.
Even sharper cuts - more than $640 million a year - were made in the revenue estimates for the next two years, based on the state's "worst case" assumption of average well-head oil prices of between $11 and $12 a barrel.
At those levels, revenues will shrink to $2.07 billion in the next fiscal year and to $1.6 billion the year after that.
"If there is a chance for error in this forecast, it is on the optimistic side - that is, the downside risk is much greater than any perceived upside potential," Nordale warned the governor.
This pessimism has already worried some New York credit analysts. Arthur J. Hausker of Fitch Investors Service confirmed last week that Fitch has Alaska's credit rating under review "with negative indications."
Fitch is also taking a second look at Alaska's leading municipal debtor, North Slope Borough. The community, with a population of 10,000, has sold $1.2 billion worth of municipal bonds in the last four years, Hausker said.
North Slope Borough's most recent bonds, sold Jan. 6, got only a medium- grade rating from Moody's Investors Service - which means Moody's analysts think the bonds "lack outstanding investment characteristics and, in fact, have speculative characteristics as well."
What worries many of the analysts and underwriters in the municipal bond market is the sheer volume of the small Prudhoe Bay's community's debt, according to Moody's. Debt service consumed nearly half of the borough's
revenues of $379 million in 1985.
Oil refineries - including a giant Atlantic Richfield facility - are its largest taxpayers, and no one expects that the oil companies will walk away
from the property taxes levied by the borough. But some analysts wonder if a continued oil slump would trigger demands for reduced tax assessments.
State officials are considering laws that would curtail the volume of municipal bond sales and change the way that the borough levies taxes for debt service to push some of the tax burden toward non-oil properties.
Further clouding the picture for the municipal market here was the disclosure in the borough's recent bond documents of a FBI investigation into possible fraud in connection with past contract awards and grants. "Borough officials believe that indictments may be handed down in the near future," Moody's warned.
Those credit analysts who are not overly alarmed about Alaska's bond-debt point to its huge "permanent fund," the oil-fed nest egg that the state formed by a constitutional amendment in 1977.
State law now requires that half of all the state's annual mineral-linked income - such as mineral-lease rentals and oil royalties - be paid into the fund, which had a balance of more than $6.5 billion in 1985.
By law, however, the fund's principal can be used only for "income- producing investments." It cannot be used for operating expenses or for debt service.
A portion of the interest income from the fund does go into the state's general fund. But economist A. Gary Schilling pointed out that lower interest rates will reduce the earning power of the fund just when Alaska needs it most.
Some fund income has been used in the last three years to make direct cash payments to Alaska's citizens. There is considerable controversy over continuing those payments now, Schilling added.
There is even some discussion of reviving an income tax, dropped along with most of the other state taxes when oil revenues began to soar in the late 1970s, according to Hausker.
Clarkson agreed with analysts at Moody's and Standard & Poor's that Alaska's permanent fund may give the state a cushion against the early jolts of cheaper oil. "But given their heavy reliance on the energy industry, the long-term outlook certainly has to be more guarded," he said.
And looking beyond the state's balance sheets at the economic life of the state as a whole, Walls of DRI sees little ground for optimism - or for indifference.
"There are those who seem to say, 'Well, they had it real good before so let them just draw on their reserves.' But it's not that simple. The state is going to have to do something. It is a very serious problem."
