The Financial Times (FT) reports on the varying impact of the recession aftermath on Indian economies—specifically nations that rely on casinos as their primary cash stream to manufacturing tribes with lucrative government defense contracts.
Many tribes expanded their casinos during the credit bubble, such as the Mashantucket Pequot Tribal Nation, who in April 2008 announced plans for a new $700 million resort at its Mashantucket, Connecticut-based Foxwoods Casino—already the world’s largest gaming facility, the FT reported. Days later, Lehman Brothers filed for bankruptcy protection, and like dominoes, financial institutions crumbled, and the global economy sank. Struggling to pay back its highly leveraged debt, the Mashantucket Pequots reached an agreement with senior lenders in January 2010 to extend and restructure its debt forbearance.
“It’s the same old story,” Joseph Kalt, co-director of the Harvard Project on American Indian Economic Development, told the FT. “A lot of cash flowing, tribes investing like mad and then getting hit by the recession.”
Then the FT goes on to discuss tribes that received government defense contracts that were maintained during the crisis, such as the Flathead Indian Reservation in western Montana, where the Confederated Salish and Kootenai Tribes operate S&K Electronics, “which produces items such as cooling fans for military helmets used in Iraq and Afghanistan.”
“The manufacturing tribes have generally weathered the recession very well because overall government contracting has been resistant because of the wars,” Kalt told the FT.
The FT concludes that the new theme for tribal economies is diversification, including partnerships with non-tribal governments. The FT cites the Poarch Band of Creek Indians in Alabama and Georgia as a model of co-operation, working with the local government on issues from police protection to roads. The Tribe operates a variety of economic enterprises, and its gaming arm manages three facilities in Alabama: the Creek Entertainment Center in Atmore, Riverside Entertainment Center in Wetumpka, and Tallapoosa Entertainment Center in Montgomery.