- Key priorities in supporting indigenous communities include cutting red tape, facilitating the creation and growth of small and medium-sized enterprises (SMEs), as well as advancing a pro-active environmental policy that is sensitive to the demands of the indigenous population
- Indigenous growth – the growth attained through the development of indigenous communities – may be seen as part of endogenous growth predicated on investments and accumulation of human capital
- In terms of economic policy instruments, national sovereign wealth funds (SWF) may invest proceeds into environmental projects within the country, including in regions represented by indigenous communities; there may also be regional/sub-national sovereign wealth funds created by indigenous regions/communities
One of the most memorable experiences from all of my trips abroad was my visit to Guatemala, where I had the fortune to explore the legendary Tikal complex. The history, the culture, the warmth of the local Mayan people left an indelible mark on my memory and a desire to return to Guatemala and explore the broader Central American region. This trip also prompted some important economic questions in my mind with respect to the role that indigenous communities can play in national economic development, as well as in the soft power that the country projects on the international stage. To be sure, the economic significance of indigenous communities has not been researched as extensively as it deserves, and economic policy practices remain far from realizing the dividends that this path to development can offer. In the discussion that follows, I argue that a concerted effort to develop indigenous communities and better integrate them into the national economy may deliver significant benefits, including in terms of lowering regional imbalances and attaining greater socio-economic stability.
Across the regions of the global economy, pretty much all of the Western Hemisphere (both North, Central and South America) as well as the Southern Hemisphere (including Australia and New Zealand) stand to benefit from the paradigm of developing indigenous economies. In the Western Hemisphere, some of the highest shares of indigenous population are observed in countries such as Guatemala and Bolivia, where the respective share is around 40%[1]. In Mexico, the country’s more than 10 million indigenous peoples account for approximately 11 percent of the population. As noted by the World Bank, however, “while accounting for a smaller percentage of the country’s total population than in some other Latin American countries, Mexico’s indigenous population is the largest in Latin America and represents a third of the continent’s total indigenous population”[2]. Across the Southern Hemisphere, one of the notable cases of a high share of indigenous population is New Zealand (17.5%)[3].
The most obvious economic dividends of developing the indigenous economy pertain to higher proceeds from tourism, including “internal tourism”. Developing indigenous economies through tourism generates significant economic benefits, including increased foreign exchange, job creation, and poverty reduction, while promoting cultural preservation. Successful indigenous-led tourism strengthens local economies by stimulating demand for services, infrastructure development, and entrepreneurship, connecting rural areas to regional markets. This in turn serves to diversify the sectoral structure of national and regional economic development via boosting the services sector, attenuating the problem of depressed regions, reducing regional inequality as well as boosting job growth and poverty reduction. In Western Australia, nearly 90% of visitors report interest in Aboriginal tourism experiences[4], while in Canada indigenous-led tourism supports nearly 2000 businesses and more than 39,000 jobs, contributing nearly CA$1.7 bn to the economy[5].
More generally, supporting indigenous economies provides a crucial social dimension to economic development – taking into account the plight of the indigenous population broadens and strengthens the agenda for a more equitable and just development. Economic policies directed towards supporting indigenous communities may also generate important positive effects with respect to environmental policies and sustainable development. A country’s success in developing indigenous economies contributes to the consolidation of the social fabric of the society and provides greater legitimacy to the development framework pursued by the authorities, rendering it more cooperative, long-term and forward-looking.
For policy-makers, indigenous communities should be seen as a key engine of sustainable development, a special kind of human capital that extends the historical depth and the social breadth for economic modernization. In a way, what may be termed as indigenous growth – the growth attained through the development of indigenous communities – may be seen as part of endogenous growth that is predicated on investments and accumulation of human capital. In this respect, economies with significant indigenous populations need to integrate the strategies of these communities’ economic development (including the targets for the attainment of key welfare indicators) into the broader long-term strategies/plans of national economic development.
In terms of practical economic policy measures that could support indigenous communities the key priorities include cutting red tape, facilitating the creation and growth of small and medium-sized enterprises (SMEs), as well as advancing a pro-active environmental policy that is sensitive to the demands of the indigenous population. Other critical areas include a legal climate that guarantees the protection of the interests of indigenous communities (including with respect to the right for environmental protection and ownership of natural resources) as well as educational and health care systems that ensure full access of the indigenous population to human capital development.
Some of the key instruments that could operationalize the development of indigenous economies may include long-term national projects that provide fiscal allocations for regional economic development over a time frame that may extend to several decades (with due protection from ad hoc fiscal cuts). Another possible track is the national sovereign wealth fund (SWF) that may invest some of its proceeds into environmental projects within the country, including in regions represented by indigenous communities. There may also be scope for regional/sub-national sovereign wealth funds to be created by indigenous regions/communities[6] as was the case with the Ontario First Nations Sovereign Wealth Fund (OFNSWF)[7] or the LRRCN Fund in Alberta, Canada.
On the international stage, indigenous communities may become a crucial factor of the country’s soft power via forging alliances and people-to-people cooperative platforms with other indigenous communities across the globe. One of the international platforms that is designed to support indigenous communities is the Tropical Forest Forever Facility (TFFF)[8] – at least 20% of its funds are to be allocated directly to Indigenous Peoples and Local Communities (IPLCs). The TFFF could hence potentially lead the creation of a platform for development institutions as well as sovereign wealth funds that could co-finance projects supporting indigenous communities.
Among the most successful cases of economic policies at the national level benefiting indigenous communities is Mexico, particularly in the course of the past decade. Among the key projects launched by Mexico to support indigenous communities is the Sembrando Vida initiative – an agroforestry program that employs mostly citizens from indigenous groups to plant fruit and timber trees. Mexico’s policies also involved benefits to the indigenous population with respect to pension payments as part of the Pension para el Bienestar program (starting at 65 years old for indigenous citizens compared to 68 years old for the general population). More broadly the government also significantly increased the daily minimum wage, which benefited the lower income strata of the Mexican society. Among the results and achievements was the narrowing of inequality in 2024 to its lowest levels in the past several decades, with World Bank figures showing the country’s Gini coefficient falling from nearly 49.6 in 2012 to 46 in 2018 and then to 42.6 in 2024[9]. Another important achievement was the lifting of more than 13 million people out of poverty between 2018 and 2024, with the overall national poverty rate declining from more than 40% in 2018 to 30% in 2024[10]. Admittedly, despite these advances there remain structural factors (most notably in the sphere of education and entrepreneurial experience) that constrain the degree to which indigenous entrepreneurs in Mexico, manage to overcome the gaps and sizeable inequality in sales versus their non-indigenous counterparts[11].
A growing number of success cases such as Mexico may serve to shift the public opinion with respect to the need for supporting indigenous communities globally. In fact, recent developments and polls in economies such as the US, Australia, Canada and New Zealand suggest that supporting indigenous communities is becoming an increasingly important issue, particularly for the younger generation of respondents. In 2025 a national Leger poll showed that 38% of Canadians agree that the country belongs “first and foremost” to Indigenous Peoples, with 43% holding the opposite opinion. Across demographics, however, 58% of the younger generation aged 18 to 24 supported the rights of Indigenous Peoples, with the figure declining to just 24% among those aged 65 and older[12]. The same pattern is observed in the recent polls in Australia, with the younger generation being more supportive of the rights of indigenous communities[13]. There may be hope then that with time the attitudes of the younger generation may translate into a greater prioritization of supporting indigenous communities in the national economic policies of advances and developing economies.
In the end, the indigenization of economic development is not a retreat into the past, but one of the gateways to a more sustainable modernization and an inclusive economic future. It is a pathway to revitalizing growth impulses, lowering imbalances and inequalities and extending the economy’s historical memory reservoir. Indigenous economics may also open new gateways to economic diversification and soft power development, allowing the national economy to position itself distinctively on the global stage. A well-calibrated economic policy of supporting indigenous communities thus becomes key for building a stable foundation for national development that transforms national history into a strategic asset for the future.
[1] https://reliefweb.int/report/guatemala/wfp-guatemala-march-2026-country-brief; https://www.worldbank.org/en/counTry/bolivia/overview#:~:text=Renowned%20for%20its%20rich%20cultural,its%20population%20self%2Didentifying%20as%20Indigenous.
[2] https://documents.worldbank.org/en/publication/documents-reports/documentdetail/126671468280475397
[3] https://www.stats.govt.nz/information-releases/maori-population-estimates-at-30-june-2025/
[4] Tourism Western Australia. (2024). Visitor Experience and Expectations Research (VEER) 2023–24. Government of Western Australia. https://assets-us-01.kc-usercontent.com/53c284ed-8b6d-0077-d7d1-762b0c10baee/383717b4-638a-4cac-bf93-f0d3330ddf46/Visitor-Expectations-and-Experiences-Research-VEER-2023-24-Report.pdf
[5] The Conference Board of Canada. Canada’s Indigenous Tourism Sector: Insights and Economic Impacts. Indigenous Tourism Association of Canada, May 2019, indigenoustourism.ca/wp-content/uploads/2019/05/10266_IndigenousTourismSector_RPT.pdf.
[6] https://thoughtleadership.cibc.com/article/how-sovereign-wealth-funds-could-help-drive-indigenous-economic-growth/
[7] https://sovereignwealthfund.ca/
[8] https://tfff.earth/
[9] https://data.worldbank.org/indicator/SI.POV.GINI?locations=MX
[10] https://www.ids.ac.uk/opinions/lessons-from-mexicos-wage-policy-that-lifted-millions-out-of-poverty/
[11] https://www.mdpi.com/2227-7099/14/1/3
[12] https://globalnews.ca/news/11457393/more-than-a-third-of-canadians-say-country-belongs-to-indigenous-people-poll/
[13] https://nit.com.au/23-03-2026/23335/strong-majority-of-victorians-support-truth-telling-new-survey-finds
Yaroslav Lissovolik, Founder, BRICS+ Analytics
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