Dineh Cooperatives, Inc. (DCI), Chinle, Navaho Nation, AZ
The Navajo Nation, which occupies 25,000 square miles of land in parts of Arizona, New Mexico, and Utah, was the largest and one of the most resource rich Indian territories in the country in the 1960s. Its development had long been hampered, however, by its status as a Native American reservation. The U.S. government had first begun a campaign to "pacify" the Navajo people and thoroughly disrupt their way of life during the Mexican War. After a protracted battle to retain their ancestral lands, the Navajo people were forced to accept a treaty in 1868 that relegated them to their present territory, and effectively categorized them as second class citizens. Since that time, the Navajo Nation, like many other Native American reservations, has suffered from isolation and neglect. In the 1960s, very few basic infrastructure investments in electricity, road paving, telephone services, and water and sewer lines had been made, and a healthy private sector economy had never had a chance to develop. The unemployment rate was consistently above fifty percent, and sometimes as high as ninety-five percent in isolated communities. Because of the poor conditions of roads, transportation within the territory was highly difficult, and sometimes impossible in the rainy season.
Breaking the Cycle of Exploitation
The country was becoming more aware about the vast economic and social inequities that existed on Native American reservations in the 1960s, in part because of burgeoning grassroots movements that were advocating for social change. In response, the federal government sponsored various programs that provided professional assistance to Native Americans who were conducting a battle against poverty and discrimination. In 1969, the small community of Piñon in a remote area at the heart of the Navajo Nation turned to its local Legal Services program and the Federal Trade Commission (FTC) to help tackle one of its most persistent problems - the exploitative practices of its local trading post. Trading posts were typically the only source of essential goods and services on Native American reservations. Because of a lack of competition, they frequently charged more than double the prices found outside Native territories. Although the operation of trading posts was officially regulated by the tribal government, local oversight was largely ineffectual. For residents of Piñon, the only alternative was to shop in border towns outside of the reservation. This often entailed a full day of travel for over 100 miles each way on dirt roads.
In order to document these problems, the residents of Piñon convinced their Legal Services office and the FTC to conduct a study on their trading post. The report revealed shocking abuses - elderly women who were forced to sign over their government checks with knives to their throats, unmarked goods that were sold at arbitrary prices, and exorbitant interest rates on pawn and other credit transactions. With these documented violations, Legal Services filed a class action suit on behalf of the residents of Piñon in 1971. As the suit progressed, however, it became apparent that the trading post operator might simply close the store, rather than conform to any court ordered guidelines. Because this would leave the community without a source of essential goods and services, a small group of Legal Services staff and participants in the federal Volunteers in Service to Action (VISTA) program began working with residents of Piñon to set up their own community-owned cooperative. Their goal was to employ local Navajos, to offer high quality goods at low prices, and to ensure that capital would be recirculated within the Navajo Nation, rather than exported to outside operators.
The doors of the Piñon Community Commercial Cooperative were opened before the law suit was even decided in the community's favor. Once the Piñon Cooperative was up and running, it began to see a flood of requests for assistance in replicating this model in other communities in the Navajo Nation. To respond to this demand, its founders decided to create a separate nonprofit organization, Dineh Cooperatives, Incorporated (DCI), whose purpose was to seek funding and provide technical assistance to newly emerging cooperatives. Within about three years after it was formed in 1971, DCI had helped to establish over twenty cooperatives throughout the Navajo Nation.
Expanding Economic Development Efforts
In the mid-1970s, DCI began to learn about the national community development movement. The organization was especially interested to find out that locally-based groups who sought official recognition as community development corporations (CDCs) were eligible to receive seed capital and economic development funds from the federal government. To take advantage of the potential benefits of being classified as a CDC, Dineh Cooperatives, Inc. applied for funding from the federal Community Services Administration (CSA).
DCI was looking for ways to expand its economic development activities because it had recently come to the conclusion that it needed to work on a greater scale to have a significant impact on the enormous problems of unemployment in the Navajo Nation. Although the cooperatives were serving a great need, they only employed a few people each. Without a healthy private sector economy, DCI's leaders believed, capital would continue to leak out of the reservation, and would not have a chance to turn over to benefit community residents.
With an initial planning grant that they were able to secure from CSA, DCI began to consult with residents of Chinle to identify their most urgent economic development needs. The overwhelming response was a call for a full service shopping center, which did not exist anywhere in the Navajo Nation. Despite the lack of precedent and the board's inexperience with large scale development, DCI was able to obtain $2.1 million from CSA and nearly $1 million in community development block grants from the U.S. Department of Housing and Urban Development (HUD) to finance the Tseyi Shopping Center.
One of the most difficult aspects of the Tseyi' project was finding an anchor tenant for the shopping center. DCI had approached numerous big name supermarket chains before it finally received a positive response from Bashas' Markets, a chain based throughout Arizona and California. Bashas' owners were quick to realize that a store within the Navajo Nation had the potential to generate great profits. Bashas' was willing to be more than a shrewd investor, however. It was ready and willing to act as a socially responsible joint venture partner with DCI. It agreed to train local Navajos to serve customers and manage the store, to channel 25% of its profits to DCI for other community development projects, and to design the store to meet the needs of its Native American consumers. Because a large number of patrons could neither speak nor read English, food sections were to be marked with pictorial rather than written signs. When it opened in 1981, the Chinle Tseyi' Shopping Center was a model of cooperation between a CDC, a private sector enterprise, a tribal government, and the federal government. Within two years, the Chinle Bashas' was one of the top performing supermarkets in the chain. It also more than adequately met its target of having 95% Navajo employees within five years. In addition to the thriving supermarket, the Tseyi Shopping Center houses a U.S. Post Office branch, a Social Security Administration office, a laundromat, a variety store, fast food restaurants, and several Navajo-owned small businesses. In total, the Tseyi' Shopping Center employs over 175 people.
Tackling Health Care Problems
With this development experience under its belt, DCI decided to initiate an even bigger project that would address another critical need in the Navajo Nation. Residents of Chinle and thirteen surrounding communities had long been complaining to local health officials about the lack of adequate health care services in the area. They had only one clinic for over 40,000 people living in the heart of the Navajo Nation. This facility had no overnight accommodations, no specialists, very little funding, and very few staff. When local residents needed specialized treatment or intensive care, they had to travel far outside the reservation to a border town hospital. Once they arrived, they would have to endure long waits because they were low priority referrals from the reservation.
In the Fall of 1977, 250 residents of Chinle held a public meeting with officials of the Navajo Nation Council and the Indian Health Service to discuss the possibility of building a major hospital on the reservation with available federal funds. Much to their dismay, officials from the Indian Health Service declared that there were currently no funds available for such a hospital, and that their project was low on the list of priorities for Native American health care facilities. Despite the dampening effect of these pronouncements, a core group of participants in the meeting refused to allow the officials to deter them. Instead, they formed the Chinle Hospital Steering Committee.
With the assistance of the staff and board of DCI, particularly Jon Colvin, a former VISTA volunteer who had worked on the class action suit against Chinle's trading post operator, the committee gathered data, researched potential funding sources, and collected resolutions from the local health board, the Navajo Tribal Council and other community groups over the next couple of years. They were able to convince not only the Indian Health Service, but also the U.S. Congress to make the Chinle Hospital a top priority. What is more, they were able to persuade local Navajos, whose land is a precious resource that is rarely sacrificed for development, to donate a hundred acres of grazing land on which to build the facility and nearly 200 units of housing for its future staff. Ground was broken for the $32 million hospital complex in 1979. Today, the Chinle Comprehensive Health Care Facility has 60 beds, extensive outpatient care, an intensive care unit, and a staff of over 400.
Venturing into High Tech Manufacturing
In the 1980s, DCI continued to expand its efforts to battle unemployment and spark economic development in the Navajo Nation. In 1987, the Packard Electric Division of General Motors presented the organization with the opportunity to become a supplier of precision machine parts. Although it did not have experience in high tech industry, and although its sole guarantee was a three-year purchase contract with the auto manufacturer, DCI once again ventured into a completely new area. Its strategy was to consult with various people who had expertise in the tool and die business, to raise funds from a combination of public and private sources, to purchase used machinery, and to set up a wholly-owned subsidiary, Tooh Dineh Industries, Inc. to run the business. After surveying numerous potential sites, DCI found an ideal location for the operation - an unused school building in Leupp, a small, remote community whose unemployment rate was about 98% in the late 1970s. Because the labor force in the area lacked experience in high tech industry, DCI set up an intensive training program for its future employees. The seven-person plant that was eventually put into operation provided valuable evidence of the untapped, productive capacity of the people of the Navajo Nation.
Tooh Dineh Industries proved so successful that it was soon asked to launch a joint venture with GM to establish a state-of-the-art automobile electronics manufacturing facility in the Navajo Nation. This 54,000 square foot operation is now the largest electronics manufacturer in northern Arizona, employing over 350 technicians, managers and engineers. Tooh Dineh's enterprises have undoubtedly had a significant impact on their surrounding community. The unemployment rate in Leupp has dropped from 98% to about 20%, which is well below the Navajo Nation average.
The Navajo New Lands: A Model for Economic Growth
In 1991, it became apparent that if Tooh Dineh Industries did not find an expansion site, it would soon exceed its capacity in terms of space and personnel. After an extensive search, an ideal site was found on the Navajo New Lands, which had recently been added to the Navajo Nation after the settlement of a century-long dispute over the boundaries of the Hopi and Navajo tribes. As part of the settlement, Navajos were being forced to move to the area, where they were provided with housing but had few employment opportunities. Although the federal Relocation Commission had done little to create jobs, it was eager to cooperate with DCI to open a new manufacturing plant in the area. Once again, DCI was able to facilitate collaboration among various private, tribal, and public sector interests to create Chiih To Industries, Inc. The 32,400 square foot state-of-the-art electronics manufacturing facility was opened in 1992 with over 30 employees, and the capacity to expand to 300. Jon Colvin, DCI's current president and CEO, points out the significance of this model of economic growth. "The tribe has been trying to push the federal government to do more to provide opportunities for people that are being forced to relocate," he explains. "And it's only been in recent years that the tribe has really been successful in doing that. What we're seeing down in the New Lands is really a whole new concept of a Navajo community. One that I hope will be able to learn from the mistakes that can be viewed elsewhere in the world."
The Power and Potential of Locally-controlled Development
The impact of DCI's community development projects has been impressive. To date, DCI and its affiliates have secured over $54 million in investments, have created over 740 jobs, and generated close to $14 million in increased household income in the Navajo Nation. The Tseyi' Shopping Center and Tooh Dineh Industries have been recognized nationally with highest awards from HUD. A key to DCI's success has been its ability to work within the structure of the Navajo Nation, while avoiding some of the red tape of government and tribal bureaucracies. It has remained firmly committed to democratic decision-making processes, however. It has an active board that includes community representatives and ensures direct communications with its Navajo constituency. The chair of DCI's board of directors, Gilene Begay, emphasizes the need to educate more local residents about the power of CDCs to advance the development of the Navajo Nation. Although the Navajo people still struggle to exercise their rights within mainstream society, they have the potential to realize significant growth through locally-controlled community economic development.
Dineh Cooperatives, Inc. (DCI)
P.O. Box 2060
Chinle, Navaho Nation, AZ 86503
(928) 674-3411
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