Economic Development in Indian Country

May 3, 2012 at 4:02 pm

The Board of Governors of the Federal Reserve System held a national conference this week called “Growing Economies In Indian Country” (referring to self-governing Native American and Alaska native communities).   The opening remarks made by Narayana Kocherlakota, president of the Federal Reserve Bank of Minneapolis, provide an excellent overview of the unique issues for economic development in Native American communities.

Kocherlakota drew a comparison between rural economic development overall and economic development in Indian Country. He identified two key challenges that necessitate a more nuanced approach to Indian economic devleopment: retaining population and restrictions on land ownership. The later, in particular, helps expand our thinking on small business lending and access to capital. Tribal lands are held in a trust administered by the Bureau of Indian Affairs (meant to stem the loss of tribal lands), making it difficult to use land as collateral for business and home loans. As Kocherlakota stated, “tribal business laws need to be artfully crafted to achieve their intended cultural or political objectives. And he challenge, in part, is to do so while imposing the least possible burden on access to capital, economic efficiency, and overall economic development.”

Native communities face severe economic challenge such as very high unemployment and deep poverty.  Initiatives like the CDFI Fund’s native Initiatives Program, and groups like the North Carolina Indian Economic Development Initiative, are working to expand access to capital to Native American businesses and communities. For intermediaries and other lenders, we must think about how we can complement existing efforts to reach entrepreneurs in these communties, with products that are best suited for them.

A report of the event will be published that will hopefully provide some insight into the content of the discussions that were had.

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Entry filed under: CDFI, Economic Development, Small Business. Tags: , .

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