Economic Development in Native America

By Keri Bradford

       The war on Native Americans has raged half a millennium, and the current relationship between tribes and the United States federal government is unstable, at best. Indian Country's recent flush in economic development grew out of gaming and business ventures that tribes established after repeatedly participating in failed government attempts at jobs creation. Natives historically have been disproportionately poorer than other races in the U.S., and tribes still have a huge struggle to mount, but since the introduction of the Indian Self-Determination and Education Assistance Act (PL 638) in 1975, tribes have consistently made maintainable gains in employment, healthcare, education, and independence. But what Natives are fighting is not simply an economic battle, but a political one, and the root of the conflict lies in ensuring tribal sovereignty. As tribes continue to become self-sustaining nations, the focus turns from immediate survival to the protection of cultural heritage and traditional values. Tribes are even able to exert influence in the political arena, now that Natives have the means (capital) to fight the way the federal government fights. This paper addresses the following points: how tribes have gained greater control over activities on their traditional lands; how they ended their dependence on the federal government through developing economic self-sufficiency; how tribes have been able to preserve, strengthen, and use traditional values in their economic development and in business activities; and what improved socioeconomic circumstances for Native individuals, their families, and their communities.

GREATER CONTROL OF ACTIVITIES ON TRADITIONAL LANDS

       Native people have been a "problem" for the federal government for hundreds of years. We've been duped, dumped, and demoralized. We've been shuffled, reshuffled, removed, terminated, and sometimes, sympathized. The government has dealt with Indians in a few ways — notably, through the creation of federal programs that manage tribal resources and economies. The obvious problem is this: when programs fail, we are failed; we (not the government) see damage from the fallout. American Indians consistently experience the highest rates of poverty and unemployment, and the lowest qualities of health and education. But that picture is changing, as Native people begin to exert their sovereign rights and take back control of their stock and culture.

       Consider the following examples: In 1824, the U.S. Department of Interior created the Bureau of Indian Affairs to manage certain tribal programs and developments. Tribes that saw little progress put the agency's effectiveness into question. To address these concerns, Congress, in 1975, passed the Indian Self-Determination and Education Assistance Act (PL 638), allowing tribes to contract with the government to take back operations controlled by the BIA. Tribes that suspected the BIA of conducting bad business now had recourse to make things right for themselves. This was a win-win situation for the government, because it no longer was accountable for funding or managing those operations (Krepps 2), or for doing damage control (Washington's Quinalt tribe accused the BIA of mismanagement because it was selling tribal timber for only $16 per thousand board feet, and identical timber was being exported for $1,000 per thousand board feet) (Krepps 18). Taking out PL 638 contracts gave tribes a way to measure the BIA's efforts and adjust accordingly.

       Another example involves California’s Hoopa Valley Tribe, whose roots to its traditional land go back at least 10,000 years. In a 2003 Indian Country Today article, reporter Jacob Cain writes about how the Hupa made large gains capitalizing on the timber, fishing, and wildlife on their land, after regaining control of natural resources from the BIA. The Hupa, who value more than anything the beauty and peace of their valley, were then able to decide how, when, and where to forest, and opted to turn their timber business into an eco-friendly venture. Financial success from that investment led to other enterprises, and a Nation once struggling with 80 percent unemployment was able to cut that number in half, in only a few years.

       One venture that tribes have had complete control of, and that has largely affected those living on and around traditional lands, is Indian gaming. Tribes that wish to game initiate the operation and decide to what degree they will participate. They put up the capital (money and land) to build a casino, and the payoffs have helped many to provide better opportunities for their members. "For every highly visible, well-run, well-capitalized casino, there are many more tribal operations that are modest enterprises providing employment and income in low-volume, rural markets" (Kalt, 1998 presentation). The right to game reflects tribes' sovereignties and muscle power; the influx of money coming onto traditional lands is wholly invested however tribes best see fit.

AN END TO DEPENDENCY THROUGH ECONOMIC SELF-SUFFICIENCY

       Up through the middle of last century, the U.S. federal government pursued a termination policy for Native Americans, even while legally bound to a trust responsibility. The policy was abandoned in 1963, and a new attitude promoted the wellness and independence of tribes, starting with their economies. The government's strategy began with funding development projects and employing Indians to perform the labor. While federal dollars were available to support a particular project, tribes would experience a bloated economy, and when those dollars dried up, tribal economies would turn bankrupt (Harvard Project, 113). It was always the tribes that got hurt when a program failed, and the federal government’s one-size-fits-all plan repeatedly failed because was not tailored to individual tribes (Harvard Project, 126), nor did it match their cultures.

       In 1991, researcher Matthew B. Krepps studied 75 tribes that were participating in the PL 638 program, taking back control of forestry operations from the BIA. Some opted to continue to share responsibilities with the BIA (Title I-level), and some opted to pursue complete self-governance (Title III-level) of their forestry programs. What Krepps found was that federally employed BIA workers were performing with minimal effort. When one BIA worker was replaced with one PL 638 (tribal) low-skilled worker, the PL 638 worker was 75 percent more productive (Krepps 13). Furthermore, he found that if all 75 participating tribes took back 10 percent of the BIA workers' jobs, the total output production would increase by 11 percent (Krepps 15), and if all 75 participating tribes controlled 100 percent of their forestry operations (Title III-level), the tribes would see a combined $18.7 million a year in added revenue (Krepps 22). In short, BIA workers — employed to aid the tribes' economic development — were hugely holding back the tribes' growth. Krepps wrote:

       "... The significantly positive influence of employment in tribally owned businesses provides strong evidence that the productivity of Indian workers increases with the amount of general business expertise possessed by tribes involved in 638 contracting. This finding constitutes a powerful argument in favor of pursuing economic development through tribally-run businesses ... As tribes come to understand what it means to run an enterprise, they will attain a competitive advantage over the BIA." (14)

       In 1991, Canada's First Nations people were suffering with staggering unemployment rates, substandard housing, and 42 percent were receiving welfare (compared to 8 percent of other Canadians) (Anderson 1). The Meadow Lake First Nations tribe knew the solution to their dependency on the government could be found growing on their land. They bought part of a defunct sawmill from the Canadian government and, with the investment of employees from another mill, they created the Forest Management License Agreement and opened Norsask Forest Products Ltd. The two partners then invested in a third group (Millar Western Ltd.) to develop a zero-pollution, chlorine-free mill, which would be more environmentally friendly and economically tenable. The three partners teamed up to create a spin-off company (Mistik Management Ltd.) that would manage all the forestry work. Next, MLTC Logging and Reforestation Ltd. was created to supply Norsask and Millar Western with logs and roads. From the Meadow Lake First Nations' initial investment (the sawmill, in 1986) to 1994, the First Nations' companies created 973 jobs — most going to First Nations people (Anderson 7). In 1996, the anchor business (Norsask) and all its spin-offs brought in a combined  $13.8 million (Anderson 8). The Meadow Lake First Nations' meager investment meant more jobs, more output, and more money for First Nations people.

       In 1969, the Mississippi Choctaw, an extension of my own Choctaw (of Oklahoma) tribe, opened the United States' first tribally owned company (it offered training in construction). The tribe, federally recognized in 1945, was struggling with poverty and unemployment. From its initial venture, an industrial revolution followed (1970s) and so did spin-off companies and new ventures. As of 1991, the tribe was generating $170 million in annual wages, providing employment to more than 12,000 people (Cornell and Kalt 4). The tribe gives hiring preference to Native people but it also employs non-Native locals, and it has become the second largest employer in the state. The tribe’s reinvestments fund education, law enforcement, and health services for those in and around the tribal community.

       Independence from the federal government starts with asserting sovereignty. Then, by recognizing opportunities and making smart investments (and reinvestments), tribes can become stronger.

PRESERVATION AND STRENGTHENING OF TRADITIONAL VALUES AND THEIR APPLICATION IN ECONOMIC DEVELOPMENT AND BUSINESS ACTIVITIES

       Native economic development did not grow until tribes dismissed the federal government's failed strategies for jobs creation. The main reason the government's attempts floundered is because tribes' cultures were not taken into consideration. Instead, the government tried applying a generic, one-size-fits-all work model to all tribes. But culture is crucial — a "cultural match" is a match “between the structure of a society’s formal institutions of governance and economic development and its underlying norms of political power and authority (culture)” (Harvard Project, 125). When backed with the foundation of their cultures, tribes finally saw real success.

       In Sovereignty is an Asset, Sherry Salway Black writes about the Arizona Tohono O’odham tribe, who upon asserting its independence and securing funding from the not-for-profit First Nations Development Institute, was able to purchase back its traditional land for farming (Harvard Project, 136). Not only did the tribe make an investment toward preservation and sustainable agriculture, but it also regained its Native food system, which led to another benefit — after 40 years, the tribe was again able to perform a traditional ceremony centered around farming. In time, had the Tohono O’odham tribe not established strong leadership and a strategy to make said investment, the ceremony might have died out with the passing of tribal elders.

       The application of traditional values is demonstrated by the way the Meadow Lake First Nations and Tribal Council choose to govern themselves. Researcher Robert Anderson wrote in 2002 in the Journal of Developmental Entrepreneurship that tribes, as "collective societies," tend to be non-hierarchical and assign labor based on "expertise and responsibility." Their leaders are "informally chosen or recognized by the community" for their skills and examples they set in life and values; decisions are reached consensually (4). When the Meadow Lake First Nations applied this style of governance to their goals, they were successful in creating their anchor business and subsequent, smaller enterprises. When a group of First Nations people (the Canoe Lake) protested the effect clear cut logging had on their portion of the land and the benefits they were receiving, the forestry company (a First Nations enterprise) successfully negotiated an agreement with them. By putting the focus back on "respecting traditional values about the land and its use in foresting activities," (Anderson 8) the First Nations' 20-year Resource Management Plan was developed, and the Canoe Lake peoples' newfound rights were extended to all First Nations affected by foresting (Anderson 7). Anderson wrote: "The principals of respect for and application of traditional values in all development activities and the use of a consensual approach in decision-making have both been entrenched in the Tribal Council's 20-year development plan, and were used in its development. If these principles are not respected in the future, one can expect the people of the communities to react once again" (8). In a different study about forestry tribes, researcher Matthew B. Krepps writes that "many tribes already display strong cultural unity" (10), and besides, if a harvest fails, tribal members know they will be the first to be hurt (job loss) (11). Another cultural understanding tribal members share is that they all stand to gain from well-managed tribal programs, because payment comes in the form of "better tribally-provided public goods (ie: schools) and/or per capita income" (Krepps 10). Lastly, Krepps' study shows that tribal foresters who are afraid of losing their jobs stay motivated to work hard (21, 22).

       Preservation and practice of cultural identity even has an unintended (most likely) influence on tribes' business activities. Just by living traditionally — growing and eating traditional foods, participating in traditional customs/ceremonies, communicating in traditional ways — has curious outsiders (travelers) wanting to observe tribes, educate themselves, celebrate and/or participate in Native culture, and in turn, they bring commerce to tribes. Perhaps non-Natives’ interest in cultural immersion is a sign of their understanding for our legitimate and constant fight for sovereignty. Their dollars are an added revenue stream, at least.

       Finally, Indian gaming, the industry that has had the greatest impact on tribal economic development in the past 30 years and which stemmed completely from tribal initiative and investment, has been called “the most successful nation- and economy-building strategy in American history" (Spilde testimony). There is rich irony in that, at a time when the federal government is seeing unprecedented levels of joblessness, economic decline, and topsy-turvy politicking, self-governing tribes experience continued growth.

IMPROVED SOCIOECONOMIC CIRCUMSTANCES FOR INDIVIDUALS, FAMILIES, AND COMMUNITIES

       Since the 1980s, tribes have made strides focusing on good self-governance, investments and savings, and wealth creation — a multifaceted approach called Nation building (Harvard Project 114). The crux of this concept is sovereignty, and while damage from hundreds of years of assimilation cannot easily be undone, sovereignty has created a way for tribes to cull the roots of their identities (Harvard Project, 126) and make maintainable gains in economic development. Advances in employment, healthcare, education, renewed culture, and independence are demonstrated in aforementioned cases with various gaming tribes, the Hoopa Valley Tribe, the Mississippi Choctaw, the Tohono O'odham, the Canoe Lake First Nations people, and the Meadow Lake First Nations people.

       The Meadow Lake Tribal Council made full-circle improvements; the First Nations people enjoyed much success with their anchor business (in forestry) and subsequent, spin-off enterprises (in transport, supplying, etc.). They funneled profits from those ventures into post-secondary training in business management for their tribal workers. The Council then created a Business Resource/Development Centre, so workers could put into practice their new skills (marketing research, business plan development, determining financial requirements). Finally, the Council created the Equity Contribution Program, giving newly skilled workers access to capital so they could establish their own start-ups, which also became successful (ventures included log haul trucking, wild rice harvesting, running small convenience stores, school busing and taxi operations, and handicraft) (Anderson 5). In the 10 years since the Meadow Lake First Nations' initial investment in forestry (1986), the median First Nation family income rose 59 percent, and the rate of First Nation employment rose 70 percent (Anderson 9).

       Political weight is perhaps an unforeseen benefit that came from gaming. Indian Country Today reporter Tom Wanamaker wrote in 2003: “Gaming tribes with deepening pockets have indeed joined the ranks of special interest groups, lobbying politicians and making contributions to candidates they support." Indian gaming has given voice to a severely underrepresented population — votes sanctioned by gaming tribes even help non-gaming tribes get recognition they might not otherwise have had. Tribes' recognition and sovereignty are still under constant threat; if our deepening pockets keep politicians' interests, so be it.

       In conclusion, Native people have worked incessantly to create economies and industries free from the reckless hands of the federal government, thus ensuring the stability of Indian Country and, more importantly, the sovereignty of its people. Perhaps the greatest threat to progress is for those living comfortably to become complacent and forget the struggles that made their way of living possible. Benefactors of the fight must be good leaders for the next generations, as tribes still have a long way to go to become political equals with the federal government.

Works Cited

Anderson, Robert B. “Entrpreneurship and Aboriginal Canadians: A Case Study in Economic Development.” Journal of Development Entrepreneurship. April 2002.

Cain, Jacob. “Nation Building Lessons in the Hoopa Valley.” Indian Country Today.
9 Sep. 2003.

Cornell, Stephen, and Joseph P. Kalt. “Where’s the Glue? Institutional Bases of American Indian Economic Development.” Harvard Project on American Indian Economic Development. John F. Kennedy School of Government. Harvard University. Februrary 1991.

The Harvard Project on American Indian Economic Development. The State of the Native Nations: Conditions Under U.S. Policies of Self-Determination. Oxford Press. 2008.

Kalt, Joseph P. Statement Before the National Gambling Impact Study Commission.

16 Mar. 1998.

Krepps, Matthew B. “Can Tribes Manage Their Own Resources? A Study of American Indian Forestry and the 638 Program.” Harvard Project on American Indian Economic Development. John F. Kennedy School of Government. Harvard University. November 1991

Salway Black, Sherry. “Sovereignty is an Asset.” The State of the Native Nations: Conditions Under U.S. Policies of Self-Determination. The Harvard Project on American Indian Economic Development. Oxford Press. 2008.

Spilde, Katherine A. Hearing on S. 519, the Native American Capital Formation and
Economic Development Act of 2003. Testimony before the Select Committee on
Indian Affairs, United States Senate. 21 Jul. 2004.

Wanamaker, Tom. “Economics Special: Indian Gaming is Healthy and Growing.”

Indian Country Today. 5 Sept. 2003.