Overcoming Challenges to Business and Economic Development in Indian Country. Impact of Historical Events on Tribal BD/ED

08/01/2004

Current BD/ED activity in Indian country cannot be fully understood without reference to historical events that continue to reverberate in reservation economies. European colonization of the Americas, wars, and subsequent policies of the United States resulted in loss of tribal land and population, disruption of tribal economies, and increased tribal dependency on the federal government. The legacy for BD/ED includes economic costs associated with the loss of land and natural resources, complicated patterns of land ownership, and a distrust of outsiders with respect to tribal commerce.

Conflict with the American colonies and subsequently with the United States had many negative consequences for Indian tribes and Native villages. Population loss due to war, starvation, and disease caused more than 100 tribes to cease to exist. Many surviving tribes (there are currently over 550 federally recognized tribes, including Alaska Native villages) were forced to leave their homelands and were restricted to reservations. These losses made many tribes dependent on the federal government for food, shelter, health services, education, and welfare (Sturtevant, 1907).

Federal "assimilation" policy, which attempted to terminate reservations and induce Indians to abandon their languages, religions, and cultures and adopt the ways of European Americans, dealt another blow to tribes in the last part of the 19th century. The effects of the General Allotment Act of 1887, also known as the Dawes Act, are still apparent on reservations today. The Dawes Act authorized the BIA to allot parcels of reservation land to individual Indians. Each Indian's allotment was to remain in trust (exempt from state laws and taxation) for 25 years. Portions of the reservation that were not allotted were declared "surplus land" and opened to non-Indians for homesteading. Tribes were compensated for whatever land was sold. The Dawes Act had serious effects:

  • Land owned by tribes fell from 138 million acres in 1887 to 48 million acres in 1934. The economic cost associated with the loss of these lands and associated mineral and riparian rights is staggering. If tribes retained these lands today, their economies might be strikingly different.
  • Many reservations now have a "checkerboard" pattern of land ownership  land parcels are owned by a tribe, individual Indians, and non-Indians, which makes it difficult to govern and manage BD/ED activities on these reservations.(14)
  • Tribal landholdings in the Indian Territory were broken up, and in 1889, former Indian lands were opened to settlement, starting with the "Oklahoma land rush." The Citizen Potawatomi Nation lost its reservation as a result of the Dawes Act.

In planning and executing current development efforts that relate to allotted land, a tribe faces problems similar to those of other governments in trying to promote development and the general welfare of its citizens while respecting the rights and desires of individual property owners. Sometimes the latter is inconsistent with the former. For example, the Gila River reservation includes 372,000 acres of which 100,000 are allotted lands in 10-acre parcels, some with 40 persons (generally heirs of the original allottee) having an interest. The tribe plans to redevelop an abandoned airfield built by the Army on the reservation in the 1940s. The land next to the airport is mostly allotted land, and the tribe is having difficulty securing agreement of the many owners for the planned development. The tribe is considering a self-governance compact to take over operation of the realty office from the BIA and, perhaps, buying out small owners so that the tribe can develop the land.

The history of conflict and maltreatment seems to influence contemporary tribal BD/ED. Informants at some of the participating tribes said that a general mistrust of non-Indian or off-reservation businesses and people results in a focus on internal development. Notwithstanding a lack of investment capital, some tribes in the study tended to plan for and to develop "home-grown" initiatives rather than seek off-reservation businesses to locate facilities or to co-invest on the reservation. At these tribes, most development planning focused on ideas developed by tribal programs or individuals. Initiatives involving partnerships with businesses outside the reservation economy of such tribes were rare. While some of these tribes coordinate development planning in a regional context, working with adjacent counties or regional economic development organizations, informants expressed little enthusiasm for such coordination.

There are, however, important exceptions to the inward focus on tribal BD/ED. Mississippi Choctaw started their modern economic development with the construction of an industrial park and a nationwide recruitment campaign to attract businesses to locate plants on the reservation. The Choctaw have continued this expansive vision by locating tribally owned businesses off their reservation and by entering into partnerships with non-Indian businesses. Other tribes participating in the study (Cheyenne River Sioux, Gila River, Turtle Mountain Chippewa), in part influenced by the success of the Choctaw, have opened business or industrial parks on their reservations and seek non-Indian tenants. The Citizen Potawatomi tribe purchased and operates a bank located in nearby Shawnee, Oklahoma. The First National Bank of Shawnee operates like any local bank, with tribal members representing a minority of the bank's customers. Navajo Nation has granted a lease to Peabody Coal Company to mine coal on its reservation and works with a consortium of power companies in operating the coal-fired Four Corners power generation facility that provides electricity to Arizona, California, and New Mexico.(15)

The two Native corporations in the study were much more open to working with and investing in businesses and activities outside the villages of their shareholders. Alaska Native communities share with American Indian communities a history of abuse and exploitation during the colonial period and after; many Alaska Native groups share a distrust of non-Native businesses. Nevertheless, the Alaska Native corporations have invested broadly in the economy of the United States. Study informants suggested several reasons for this openness to investment outside their Native communities:

  • Their organization as corporations with individual members of tribes or Native villages owning shares in the corporation
  • The relatively large amount of liquid assets they received when they were created (pursuant to the enactment of ANCSA)
  • Their mission of protecting and expanding their assets
  • Utilization of professional financial advisors to guide their investments

While profitable investment opportunities in the remote Native villages are scarce, the Native corporations do seek to promote BD/ED in their constituent Native villages. For example, Doyon created Doyon Tourism, Inc. to promote tourism in its region. Doyon's land and natural resources department manages its ANCSA lands, generates income and job opportunities for shareholders, and promotes traditional shareholder uses of Doyon lands. The Bristol Bay Native Corporation maintains a directory of businesses owned by its shareholders and works with the Bristol Bay Health Corporation and Bristol Bay Native Association to promote job opportunities in the region.

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