Choctaw uprising.

THIRTY years ago, the Choctaw Indian tribe in rural Mississippi suffered from the same legacy of poverty, dependency, and despair that has plagued American Indians across the country for over a century. They regularly suffered from 75 per cent unemployment, and those that did work were poorly compensated sharecroppers. Eighty-five per cent of Choctaw housing was classified as substandard. Local education stopped at the sixth grade. The only health care was from a nearby federally run hospital. Life expectancy was only 45 to 50 years, and infant mortality was among the highest in the U.S. A local newspaper called the Choctaw tribe, 'the worst poverty pocket in the poorest state of the union.'

But then Chief Philip Martin rose to tribal leadership. Today, the Choctaws are an economic powerhouse, the proprietors of a sprawling, multi-enterprise, industrial empire. They are the largest employer in Neshoba county, and among the ten largest employers in the whole state.

How did they do it? They did it the old-fashioned way -- capitalism. After Martin became chief in 1959, he realized that the Choctaws were never going to climb out of poverty through government handouts and welfare. He saw that the only way out was to create real jobs in the private sector.

Martin doggedly contacted five hundred firms before he attracted his first manufacturing customer to the reservation. In 1979, the Choctaws opened a 42,000 square-foot plant that assembled automotive wire harnesses for General Motors. Today, the Choctaws employ almost 1,000 people building wire harnesses for Ford.

BUT this was only the beginning. Another 60,000 square-foot plant on the reservation produces speakers for Ford, Chrysler, and McDonnell-Douglas, with annual sales close to $30 million. Another plant employs 175 workers producing cables for Ford and Chrysler and circuit boards and other electronic units for AT&T, Xerox, Westinghouse, and Navistar.

Still another plant employs 150 workers assembling and hand-finishing greeting cards for American Greetings. Another enterprise produces close to one million pieces of plastic cutlery a day for McDonalds. The Choctaws also own and operate the largest volume printer in the gulf area, in another 72,000 square-foot plant. They also run a construction company and their own shopping center. And last year, the Choctaws opened their newest enterprise -- the $38 million Silver Star Hotel and Casino.

A few Indian tribes have achieved great economic success with gaming enterprises. But what makes the Choctaws the most interesting is that they have blazed the path to economic independence with highly diversified industrial and commercial operations. All told, the Choctaws now operate 12 major businesses on tribal lands. These enterprises are expected to generate over $300 million in sales this year.

As a result, unemployment among the Choctaws is now below 20 per cent. Average family income has climbed from $2,000 per year twenty years ago to over $13,000 today. Remarkably, only 2.7 per cent of household income among the Choctaws comes from welfare or other social programs. The average educational level of tribal members has climbed from 6th grade in 1975 to almost 12th grade today. Substandard housing among the Choctaws is down to 15 per cent from 85 per cent. Life expectancy has soared to 65 to 75 years, and infant mortality has plummeted to the national average.

The tribe also manages its own reservation government. Under a contract with the Bureau of Indian Affairs, the tribe operates six elementary schools, a middle school, and a high school, serving 1,400 students overall. Under a contract with the Indian Health Service, the tribe runs a 43-bed hospital and several community clinics. The tribe also manages its own water, sewer, and waste-disposal systems.

All of these government functions are financed without tribal taxes. The tribe uses revenue from its business operations, fees for some directly provided services, and federal funds the government is obligated to provide by treaty.

The Mississippi Choctaws have a heritage of grit and determination. They are descended from those remnants of the Choctaw nation that managed to stay behind when President Andrew Jackson forcibly relocated most Choctaws to Oklahoma in 1830. But a large measure of their current success is simply explained by the high quality of their work. For example, the national rejection rate for all U.S. factories making wire harness systems is 3 per 1,000. In Japan, the rate is 2.5 per 1,000. But at the Choctaw reservation, the rate is only 0.8 per 1,000. As a result, Ford rates the Choctaw plants Q-1 among the top quality plants in the nation. Ford and Chrysler have together granted six quality performance awards to Choctaw plants.

Another advantage, however, has been key to their success as well. The Choctaw reservation, like other Indian reservations, is effectively an enterprise zone. Because the tribes are considered sovereign governmental units, their reservations are exempt from state and local taxes and regulations. This means businesses, Indian workers, and transactions on the reservations are exempt from state and local sales, property, and income taxes. Though federal law is supreme, enterprises owned by the tribe on the reservations are also exempt from federal taxes and many federal regulations. In addition, tribes rarely impose their own taxes.

Moreover, because tribes provide their own public services, they can make those services as attractive as possible to potential businesses. Businesses can also cut a simple deal directly with the tribe, and not be hassled by additional zoning permits, business licenses, and construction permits. Running their own civil courts, the tribes can and do exempt reservation businesses from the tort madness that plagues the rest of the country.

For years, conservative Republicans and many Democrats have advocated enterprise zones for the nation's economically distressed areas. Martin's reign among the Choctaws shows how dramatically successful this policy can be.

Yet, incredibly, some are advocating changes that will undermine rather than extend these successful policies. The House Republican budget inexplicably included a provision to impose a new federal tax on Indian gaming revenues, ranging from 14 to 35 per cent. The new tax would have foolishly reversed an enterprise zone-like policy that is leading Indians out of long-standing government dependency to economic self-sufficiency. Fortunately, Martin spearheaded a successful campaign to kill the tax.

Instead of promising new federal taxes and regulations, Republicans and alert Democrats should embrace the stunning Choctaw economic success as a model for Indians across the country. They should support and extend wherever possible the current, effectively free-market enterprise zone policy for Indian reservations, and encourage Indians across the country to utilize it as successfully as the Choctaws have. With Indians increasingly employed in well-paying private-sector jobs, the billions the Federal Government currently spends on welfare and similar assistance for Indians would be sharply reduced.

IN addition, Congressional leaders should take up Chief Martin's proposed reforms of the BIA. The BIA's $1.5 billion annual budget is mostly wasted on self-serving bureaucrats the Indians despise, with only 10 to 15 per cent of the agency's funds reaching the tribes. The Choctaws, and other tribes, have proved that the Indians can more effectively use this money themselves.

In fact, Congress should go one step further, and block grant the BIA to the tribes. For a time, tribes could use the funds for the programs they each thought best. And then the BIA should simply be abolished.

The experience of the Choctaws shows that the future of American Indians is bright, as long as the Federal Government gets out and stays out of the way.