The Lost Cave is documentary produced by the Public Broadcasting Corporation (PBS) of the United States. The documentary is about the discovery of the seven sacred caves of Mustang that are mentioned in the scriptures, but where no human beings have ventured for centuries. In 2007, two world-class mountaineers ventured into two these caves, and discovered fine art and texts about a civilization dating back to the 14th century.
To an archeologist and a historian this is a great discovery and will lead to better understanding of the ancient cultures of Tibet and Nepal.
But historical understanding is not the only takeaway from this documentary. It also offers an important economic insight. It shows that when it comes to managing resources, Nepal has mostly got it wrong. This is best illustrated as the viewer watches how the expedition unfolds.
After a thorough preparation for the trip and seeking permission from the government of Nepal, paying the required fees, the team consisting of archeologist, mountaineers and film producers go to Mustang.
Everything appears to go fine until one of the climbers is hanging on the rope only five feet away from the cave. Then a group of villagers arrive. They say that their caves are sacred and that they don’t want any foreigners entering them. They threaten to cut the ropes. Fearing his safety, the mountaineer is forced to descend. A group of men are seen gathering twigs to burn the climber’s rope.
Soon it is clear that what the villagers want is money. They ask for an amount close to US $1,000. Realizing that it was about the money and not about sacredness, the climbers, as a negotiating tactic, show lack of interest in climbing further and start dismounting. The asking amount plummets—to a pretty insignificant amount, according to one of the team members. Then the villagers are shown counting a stack of cash, and the expedition proceeds.
Soon, everyone is overjoyed at seeing the pictures that the foreign men bring back from the caves.
What the climbers had to go through was unfortunate. It was in essence a form of extortion. Clearly, it is something that will deter tourism and hurt the reputation of Nepalis.
But it is useful to ponder why such unabashed extortion occurred in the first place.
One reason why such an unfortunate incident happened is because there is no strong mechanism to punish extortionists. And gullible tourists who are not adept at working in Nepal are easy targets for those looking for easy money.
Rather than view resources as sole property of Nepal, it makes greater economic sense to view them as joint property of locals and the government
Another, and perhaps a much deeper reason, why such an incident happened is because Mustangis living near the caves feel they have some special rights to those caves compared to the rest of the Nepalis. One man is heard saying in the documentary: “This is my land”.
As of now, the Mustangis have no economic rights over those caves. While the foreigners pay some amount to enter Mustang and trek, the proceeds were all collected by the central government. It is not clear to the locals living near the caves that they are benefitting from this deal. The government in Kathmandu will tell them that they collect the proceeds to build roads, bridges and airports that all Nepali use, including the Mustangis, but the Mustangis are not buying it. They want to see some direct benefits.
Rewarding the locals disproportionately and directly for the resources located in the region is a smart economic strategy. Consider the case where the Mustangis of the village where the cave is located are given certain proceeds that Kathmandu collects for treks to those caves. In such a scenario, the tourist knows what he is getting into, and the villagers will have no opportunity to extort extra money. The village development committee will have already collected on their behalf. Further, this creates incentives for the villagers to create an environment that is attractive for tourists. The more the number of tourists, the more the money they will get.
Also, because they reside close to the natural resource, they have more knowledge about how best to use it. They are in a better position to identify and punish anyone who steals from or destroys the value of the resources. If their incentive is aligned so that they benefit more from preserving those caves, they will do so, at a lower cost.
Rather than view Nepal’s resources as the property of Nepal, it makes greater economic sense to view them as the joint property of the locals living in the region, and the government of Nepal. In other words people living near the caves of Mustang should have more rights to the cave than those living in Janakpur. If these caves are used to generate cash, Mustangis near the cave should benefit more compared to those in Janakpur. This small change in how we view resources in Nepal can go a long way in making good use of them.