June 25, 2014

Access to Capital, Remote Locations Stymie Economic Growth in Indian Country

U.S. SENATE – Today, Senate Committee on Indian Affairs Chairman Jon Tester (D – Mont.) held a hearing on economic and business conditions in Indian country.  Access to capital remains a primary factor leading to stagnant economic growth on reservations. 
“Over the last few months, I’ve highlighted the need for better education for Indian children.  However, better learning opportunities will go for naught if tribal economies are struggling – forcing students to take their skills and find jobs elsewhere,” Tester said.  “We can’t let that happen. Our First Americans should not have to choose between making a good living away from their family and homelands or living in poverty.”
According to the 2013 American Indian Population and Labor Force Report, only 50% of all Native Americans living in or near tribal areas, who are 16 years or older, are employed.  Additionally, an estimated 23% of all Native American families in the United States in 2010 earned income below the poverty line.
“Despite notable progress over recent years, there still remains private sector uncertainty about whether Indian Country is a good investment,” said William Lettig, Executive Vice President of KeyBank.   “This uncertainty, which I believe is based on lack of information and understanding about Indian Country, has a chilling effect on capital markets’ appetite for investing in Indian Country.”
Kevin J. Allis, Executive Director, Native American Contractors Association, said, “The communities which Native enterprises serve remain some of the poorest and most underserved groups in the United States. There is still tremendous work to be done in effecting positive and sustainable benefits for these communities.”
Gerald Sherman, Vice Chairman, Native CDFI Network, outlined the challenges, “Native communities experience substantially higher rates of poverty and unemployment than mainstream America and face a unique set of challenges to economic growth.   Lack of physical, legal, and telecommunications infrastructure; access to affordable financial products and services; and limited workforce development strategies are common challenges that Native entrepreneurs, homebuyers, and consumers face and must overcome.”
Tester focused on programs that have shown results in Indian Country, “There are success stories out there.  We have programs, such as the Treasury Department’s Community Development Financial Institutions Fund and the Department of the Interiors’ Indian Loan Guarantee Program, that, when well-executed and properly funded, are attracting investment into tribal communities.”
Dennis Nolan, Acting Director of the Community Development Financial Institutions Fund (CDFI Fund), provided an overview of the impact of the federal program he leads.  “The Fund’s work in Indian Country is born of an awareness that Native communities all across the nation continue to face extraordinary economic challenges that limit access to capital.  Since it was launched in 2001, the Native American CDFI Assistance Program has provided awards totaling more than $93 million to help Native CDFIs deliver financial services and financial products to their communities. What started as just a few Native CDFIs ten years ago has now grown to 68, headquartered in 21 states.”
Gary Davis, President and CEO of The National Center for American Indian Enterprise
Development, said, “The more successful federal business development programs are those that are specifically designed to help startups and larger companies in Indian Country.  What does not work well is the ‘square peg – round hole’ approach of repackaging legacy federal programs and dictating how assistance must be delivered and to what size of business.”
Tester vowed to continue to examine solutions to unlock potential investment and development in Indian Country.  The Committee has already adopted significant legislation that will directly impact and assist economic development in Indian Country such as the Native American Housing Assistance and Self-Determination Act, the Tribal Energy Development and Self-Determination Act, and the Carcieri fix.
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