Louisiana officials tout economic 'renaissance'

DATELINE: WASHINGTON, Jan 24 2008

Just over two years after their state was battered by one of America's worst natural disasters, Louisiana officials said Thursday that the region's economy is recovering dramatically.

Rocketing crude oil prices have helped fuel a rapid rebound in Louisiana's fortunes and state officials have launched an ambitious drive to make the Gulf of Mexico coast state an economic powerhouse.

"We're in the early days of what I believe will probably be characterized as the Louisiana renaissance," Stephen Moret, the newly-appointed secretary of Louisiana Economic Development, told AFP in an interview.

Moret, a former McKinsey management consultant, is impatient to boost a regional economy that was derailed by Hurricane Katrina in August 2005. Another hurricane, Rita, battered the state a month later.

Katrina, which devastated the famed city of New Orleans and other areas, caused tens of billions of dollars in damages, wrecked offshore oil and gas platforms, flooded businesses, and dented local tourism.

Recovery efforts have been boosted by the Gulf Opportunity Zone Act passed by Congress in 2005, which offers tax incentives to businesses, but Moret is vying to woo US and foreign companies to invest in Louisiana.

"There are significant projects, discussions are happening with international companies right now, in the automotive sector, in the petro-chemical sector, in the ship-building area," Moret said, while constantly monitoring his Blackberry.

Moret declined to name the companies, but said the state has purchased around 1,500 acres (607 hectares) of land in northwest Louisiana which it hopes could become the site for a major new automotive plant.

He said the weak US dollar had also raised investment opportunities for foreign companies.

Despite mounting economic uncertainty nationally, triggered by a lingering housing market slump, officials say Louisiana is well positioned to weather what many economists fear is a looming national recession.

"I think we're a little bit more recession proof," said Donald Pierson, the state's assistant secretary for economic development.

Pierson stressed that Louisiana was "the number one crude-oil-producing state in the nation" and that state coffers have been swelled in the last year by surging oil prices.

Louisiana is home to 19 crude oil refineries and the oil and gas industry provides tens of thousands of jobs in the state.

A vast construction effort to rebuild hurricane damaged buildings and facilities has also helped bolster state finances.

Moret, appointed by Louisiana's new Republican governor Bobby Jindal, and Pierson were in the US capital attending what they referred to as the annual "Washington Mardi Gras", a get-together of the state's top political leadership and captains of industry.

They said efforts are also being made to encourage more biotechnology, life science and media firms to invest in the state.

The officials claimed Louisiana is one of the few US states that has an incentive solely targeting the digital media industry. The Digital Media Tax Credit offers interactive digital media firms, such as videogame developers, up to a 20 percent tax credit against their expenditures.

Pierson said tourist numbers have not quite rebounded to pre-Katrina levels, partly due to fewer convention bookings, but he said visitor numbers are ticking back up.

"We're in full fledged recovery mode," Moret said. "We feel very optimistic."