Explaining disparate economic success in highland Nepal: opportunity, cooperation, and entrepreneurship in Manang.

Nepal is a country marked by poverty and development challenges, especially in its rural highland areas where residents are primarily engaged in subsistence-level agriculture and pastoralism made difficult by a short growing season at high altitude. Remote from concentrated population centers, roads, markets, and sources of capital, the inhabited areas of Nepal's Himalayan highlands are generally characterized by a low level of commercial activity. (1) But a few highland communities stand out in Nepal due to the widespread involvement of their members in business ventures and their relative economic success and high standards of living. (2) This disparity in economic success among communities is quite striking, particularly since Nepal's Himalayan highland communities share a similar environmental and cultural milieu. Over the course of the past few decades, the causes of this disparity have been the subject of some scholarly focus. (3)

Explaining Disparate Economic Success in Highland Nepal

In the 1970s, as areas of Nepal's Himalayan highlands were increasingly opened to researchers, nascent scholarly attention devoted to the region's inhabitants developed into an academic debate over the factors involved in the differential level of commercial involvement and economic success among the various communities throughout the region. This debate was framed by two published works, a book written by Christoph von Furer-Haimendorf (1975) and a subsequent article by Andrew Manzardo (1977). Both of these works focused on the historical involvement of Nepal's highland communities in trade across the Himalaya mountain range between Nepal and Tibet.

Throughout Nepal's Himalayan highlands, environmental constraints on agricultural and pastoral production imposed by high altitude have long forced the regions' inhabitants to look for external commercial means to supplement their local subsistence economies. Prior to the advent of mountain tourism in Nepal in the 1960s, trade had been the primary form of commercial 'activity available to the country's highland peoples. The Himalaya mountain range forms the dividing line between two disparate but complementary economic zones, the high plateau of Tibet and the Lower hills and plains of Nepal and India, a situation which gave rise to a demand for trade across the mountains. Historically, this trade primarily consisted of the exchange of salt and wool from the Tibetan highlands for rice grown in the lowlands.

Trans-Himalayan trade came to a virtual halt in the 1960s as a result of the occupation of Tibet by communist China and the increased availability in Nepal of goods from India. The supply of Tibetan goods to Nepal's hill regions dried up with the closing of the Tibetan border by occupying Chinese forces following a failed Tibetan uprising against Chinese occupation and the flight of Tibet's leader the Dalai Lama and thousands of his followers from Tibet in 1959. Even after Chinese authorities re-opened the Tibetan border to limited trade, it was under tight Chinese control and not nearly as lucrative for Nepal's highland trading communities as it had been. During the same time frame, the demand for Tibetan goods in Nepal was dealt a serious blow by the construction, with international development assistance, of roads linking the interior of Nepal with India. The improved transportation links increased the availability and lowered the price of Indian goods in Nepal and enabled imported Indian goods to widely replace Tibetan ones (von Furer-Haimendorf 1975).

But even while trans-Himalayan trade was thriving, levels of involvement and success in trade varied greatly among the communities inhabiting Nepal's Himalayan highlands. This variation can largely be attributed to the availability of commercial opportunities in trade not being uniform throughout the region. There were two primary reasons for this non-uniformity: geographic location and government-sanctioned privileges.

Although the Himalaya mountain range poses a formidable barrier to travel, there are several crossable points that served as natural corridors for trade. Based on the proximity of their home regions to such corridors, some highland communities were historically better situated than others to engage in and benefit economically from trans-Himalayan trade. Other geographical factors also came to bear. For example, since pack animals were essential to large scale trans-Himalayan trade, communities with large numbers of livestock suitable for use in transporting goods could better participate in trade. Because of the unfeasibility of travel across high mountain passes snowbound in winter and across mudslides and raging torrents in lowland areas during Nepal's summer monsoon, trade between Tibet and lowland Nepal was necessarily a disjointed operation requiring both the seasonal storage of trade goods and a change between different types of pack animals at suitable altitudes. Thus, the geography and associated ecological attributes of some communities' home regions positioned those communities to take economic advantage of the peculiarities of trans-Himalayan trade (von Furer-Haimendorf 1975, Manzardo 1977).

Some communities were able to enhance their ability to take advantage of commercial opportunities in trade by obtaining special privileges from the Nepal government. In an effort to control and capitalize economically on trans-Himalayan trade, the Nepal government historically granted trade monopolies to several communities, or in some cases to individuals within those communities. (4) The Nepal government collected customs taxes on the large scale trade conducted along major trade routes, and the granting of trade monopolies, by reducing the number of participants and inducing their cooperation--with government authorities, made regulation of trade and collection of customs taxes easier for the government (Messerschmidt and N. Gurung 1974, von Furer-Haimendorf 1975, Regmi 1984:123-124, Schrader 1988).

While pointing out the important roles of geographic location and government-sanctioned privileges in providing advantages to certain of Nepal's highland trading communities, von Furer-Haimendorf (1975) credited economically successful communities with certain cultural characteristics amenable to their members' widespread involvement and success in trade. For instance, von Furer-Haimendorf emphasized the wide scope for individual choice and risk taking in economic activities among members of Himalayan highland communities. Contrasting the Buddhist culture of highland communities with that of Hindus in lower lying areas of Nepal, von Furer-Haimendorf suggested that highlanders were free agents from an early age without constricting economic obligations to a joint family dominated by an elderly patriarch, since at marriage they establish a separate household with the inheritance of parental property individually apportioned among siblings. In addition, von Furer-Haimendorf pointed to the lack, again relative to lowland Hindus, of social hierarchy and social restrictions among both men and women in Himalayan highland culture that would otherwise hinder personal interactions and relations with trade partners from other regions and make distant travel for trade difficult.

The importance von Furer-Haimendorf placed on cultural factors was challenged by Manzardo (1977), who argued that, together with geographic location and government-sanctioned privileges, ecological advantages and constraints rather than cultural characteristics were primarily responsible for different communities' variable involvement in trade. In particular, Manzardo emphasized the role of local natural resources in supporting the keeping of pack animals used to transport trade goods, arguing that communities with adequate pasturage for large numbers of pack animals could engage in trade to a greater extent.

In a subsequent comparative analysis of highland Nepal's more economically successful trading communities, Heiko Schrader (1988) bridged the Haimendorf-Manzardo debate by suggesting that economic success in trade depended upon the combination of favorable location, ecology, and government-sanctioned privileges (all of which can be considered forms of commercial opportunity) with beneficial cultural characteristics. To get around another issue in the Haimendorf-Manzardo debate, namely the Weberian-Marxian question of whether socio-cultural forms determine economic forms or vice versa, Schrader maintained that economic and socio-cultural forms mutually influence each other.

Barbara Parker (1988) contributed to the debate with an article focusing on the significance to a community's economic success of what she termed a "culture of entrepreneurship" among the community's members in combination with local control over local economic surplus. In particular, Parker attributed the heavy involvement in commercial ventures by Nepal's Thakali community to "a powerful cultural impetus toward trade, investment, and capital accumulation" that developed under circumstances of geography (namely the isolated location and relatively poor natural resources of the community's homeland) that enabled the community to maintain control over its own economic resources. Thus, Parker credited the lack of oppressive expropriation (i.e. heavy taxation) of local economic surplus by external authorities with enabling the culturally entrepreneurial Thakali to reinvest their earnings and thus increase their involvement in commercial enterprise.

In her study of several of Nepal's more enterprising ethnic groups, Laurie Zivetz (1992) pointed out the importance to entrepreneurial activity of a supportive cultural environment, access to capital, and government policies that encourage private enterprise. Zivetz noted that members of village communities are often precluded from entrepreneurial activity due to cultural conservatism and limited capital. As a result, she suggested that commercial opportunities and sources of credit were necessary to provide the incentives and the means, respectively, for community members to pursue commercial endeavors.

To the mix of factors affecting the disparate success in trade achieved by various highland communities, Wim van Spengen (1992) added the geo-historical influence of state politics and international market dynamics. He argued that the Nepal government's regulation of trade, which effectively restricted open competition between groups, was a result of political relations between the government and individual groups. He maintained that special trade privileges or monopolies were granted to particular groups by the government in order to achieve border containment security by bringing those groups closer to the government and thereby controlling against separatism. He also pointed out the importance to trans-Himalayan trade, and hence to the highland trading communities that brought the disparate markets of South and Central Asia together, of the historical emergence and development and eventually the drying up and shifting to other channels of trade flows.

The curtailment of trans-Himalayan trade severely affected those Himalayan highland communities in Nepal that had depended upon it as an essential supplement to local subsistence-level agro-pastoralism. Many members of those communities were forced to migrate, either seasonally or permanently, to more urbanized lower lying regions in search of alternative economic opportunities. But some communities were able to turn to mountain tourism as a supplemental economic activity as Nepal's popularity as an international adventure tourism destination grew in the 1970s and thereafter.

As was the case with trans-Himalayan trade, some of Nepal's highland communities have been better situated than others to participate in the business of tourism, with geographic location and government-sanctioned privileges again serving as major determining factors. Due to border sensitivities with China, the Nepal government has dictated exactly where foreign tourists are allowed to travel, opening some highland areas and leaving others, particularly those with easy access to Tibet, off, limits. Among those highland areas open to trekking tourism, some have benefited from government-developed transportation infrastructure making them easier to access, an important factor in attracting large numbers of tourists. The Nepal government has also controlled the number of tourists visiting some highland areas by imposing annual quotas and charging high entry fees. Together with the level of infrastructure development, entry restrictions and radically different fees levied by the Nepal government for visiting different areas have funneled most trekking tourists to just a few regions.

Although numerous scholarly and popular works have been written about tourism in Nepal, most have focused on the perceived negative effects of tourism on local residents and the natural environment while very few have addressed the varying degree of economic success in tourism among the country's highland communities. Most authors seem to have been content with considering the various communities' tourism economies to be driven by tourist demand (as influenced by travel restrictions, visitor fees, infrastructure development, and the attractiveness of the local environment) with little regard for the supply side effect generated by the response of particular communities to available opportunities in tourism. But there are a few noteworthy exceptions.

Sherry Ortner (1998) took the position that certain cultural characteristics attributed to the Sherpa ethnic group residing in Nepal's Khumbu region have contributed to the group's economic success in tourism. For example, Ortner demonstrated how, in their dealings with foreign visitors, Sherpas have benefited from what visitors widely see as a friendly, good-natured, cheerful approach to working in tourism. Vincanne Adams (1996) went even further in claiming that Khumbu Sherpas deliberately employed manipulative inter-cultural strategies in order to benefit economically from their relations with wealthy foreign tourists. And Jim Fisher (1990) described how improvements in local education levels as a result of schools funded by foreign visitors positively affected the way Sherpas in the Solu-Khumbu area have been able to take advantage of commercial opportunities in tourism. But while describing ways in which the Khumbu Sherpa community has taken advantage of commercial opportunities in tourism, each of these authors was quick to point out that the existence of those opportunities in the first place has been primarily due to the proximity of the community's home region to Nepal's most famous tourist destination, Mount Everest.

Each of the scholarly works mentioned above has contributed to our understanding of the factors involved in the disparate economic success of Nepal's highland communities, be it in the business of trade or tourism. An interesting characteristic of the debate outlined above is that rather than diminishing the credibility of prior arguments, each contribution has instead generally incorporated and built upon the existing thinking. As a result, one is apt to believe that it has been a variety of factors identified by various scholars rather than any single factor that has enabled certain communities to achieve economic success. For example, the availability of even a compelling commercial opportunity would not by itself be enough to spur the emergence of entrepreneurial activity, but the availability of such a commercial opportunity to members of a community with an entrepreneurial culture and access to capital might be.

As a kind of summary then, by aggregating the explanatory factors highlighted in the various contributions outlined above, one might conclude that the economic success achieved by certain of Nepal's highland communities has been due to a favorable combination of available commercial opportunities (resulting from such factors as geographic location, ecological environment, government-sanctioned privileges, market dynamics, and infrastructure development), a culture that is not only open to but also encourages entrepreneurial activity, access to capital to finance business ventures, and a lack of business-hindering regulatory restrictions and economic expropriation.

Over the course, of my own research on the rise of entrepreneurship in Manang, the home of one of the more enterprising communities in highland Nepal if not the entire country, I have not been surprised to find explanatory factors that correspond quite well with those found by prior researchers working in highland Nepal as summarized above. For example, the Manang community has benefited greatly from the availability to its members of significant commercial opportunities in both international trade and tourism. It has an extremely entrepreneurial culture where members are not only free to engage in business but feel compelled to do so as part of their very identity. The community's members have been able to access the necessary capital to finance a variety of business ventures without even resorting to the use of commercial credit. And the community has not only been free from external economic control and expropriation, it's own regulation of private enterprise has remained remarkably business-friendly and free market oriented.

What has been surprising to me, however, has been the critical importance to the Manang community's economic success of something that has received comparably little attention from other scholars who have worked in highland Nepal. The emergence of the Manang community as one of the leading entrepreneurial communities in Nepal can largely be attributed to its social systems of economic cooperation that have facilitated the widespread involvement of its members in private entrepreneurial ventures. Sufficient attention has not been given to the role that these systems have played in the Manang community's economic success or that similar systems could play in the economic success of other communities. This article is an attempt to balance that lack of attention.

The Manang Community

Manang is the name of a large village in the Nyishang region of north-central Nepal. (5) Situated in a glacially carved valley between the Himalaya and Tibetan Marginal mountain ranges, Manang lies at an altitude of 3540 meters (11,615 feet) and is virtually surrounded by mountains over 6000 meters (20,000 feet) high. Nearly all the residents of Manang are Nyishangte, the ethnic group indigenous to the Nyishang region. The Nyishangte people number a little more than 5000, with nearly half of the population currently residing in their traditional homeland of Nyishang. Most of the others live in Nepal's capital city, Kathmandu--a result of massive urban migration by Nyishangte pursuing commercial opportunities in international trade in the 1970s and 1980s. What I refer to in this article as the Manang community includes the Nyishangte residents of Manang village and its subsidiary settlements of Tenki and Humde, a community with a current population of roughly 900.

Although quite poor as recently as the early 1960s, the Manang community has managed to rise to prominence in Nepal as one of the country's more economically successful village communities. The Nyishangte people have a colorful history of engaging in entrepreneurial activity, from trading in various countries of South and Southeast Asia, to running retail and hotel businesses in Kathmandu, to catering to foreign trekking tourists in their native region of Nyishang. But although Nyishangte involvement in entrepreneurial ventures can be traced back at least two centuries, it has only been during the past four decades that a significant proportion of the group has been able to achieve levels of economic success remarkable in Nepal.

What has been different about the Manang community that enabled it to achieve economic success while many other similar communities in Nepal's Himalayan highlands have not? As one would expect from the debate summarized above, many factors have contributed to the Manang community's economic success. To put it in the simplest terms possible, the community has been largely comprised of fortunate opportunists who have, over time, recognized and aggressively pursued the commercial opportunities that have become available to them. Fundamental to its members' ability to aggressively take advantage of commercial opportunities, the community has remained relatively free from outside economic expropriation and has benefited from certain cultural characteristics, social systems, and regulatory policies that have greatly supported its members' involvement in private enterprise. Thus, while commercial opportunities were the essential seeds of entrepreneurship in Manang, infrastructure advancements facilitating access to those opportunities, economic autonomy allowing entrepreneurs to reap and keep the rewards presented by those opportunities, an entrepreneurial culture embracing private ownership and widespread involvement in business enterprise, social systems of economic cooperation enabling access to capital to finance business ventures, and a liberal, business-friendly regulatory climate provided the fertilizing nutrients for entrepreneurship to emerge and again re-emerge in what had been an economically disadvantaged environment.

But while each of these factor's has played an important role in the community's economic success, it has been the relatively unique combination of all of them together that has served to distinguish the Manang community from less economically successful communities in highland Nepal. Indeed, autonomy from external expropriation, a culture open to widespread involvement in business, and a private enterprise friendly, laissez faire regulatory approach are commonly found among Nepal's Himalayan highland communities in general. What has effectively differentiated the Manang community from less economically successful highland communities has been the availability of significant commercial opportunities to its members and their efficacious use of various social systems of economic cooperation to access capital to finance business ventures.

To explain the relative economic success of the Manang community and contribute to our understanding of the causes of disparate economic success among communities in highland Nepal, this article examines the manner in which commercial opportunities have historically become available to the Manang community and the social systems of economic cooperation the community has used to support its members' involvement in business ventures. In so doing, the article provides some interesting insights into the historic and recent emergence of widespread entrepreneurial activity among members of the Manang community. (6)

Commercial Opportunities

When one steps back to consider the Manang community's history of entrepreneurial activity, several watershed developments stand out as having broadly shaped the evolution of commercial opportunities available to the community's members. While it would be wrong to imply that these developments alone determined the history of entrepreneurial activity in Manang, nonetheless each of them was critical enough to characterize an important era in Manang's economic history.

The first of these watershed developments can be traced back to the late 18th century, when the king of Nepal granted the residents of Nyishang the privilege to travel freely throughout the country and an exemption from paying customs taxes on trade goods. The recognition and continuation of these privileges by subsequent rulers of Nepal over the next two centuries enabled the Nyishangte to gradually expand the geographic scale of their trading forays throughout Nepal, northern India, and as far afield as Southeast Asia.

The next watershed development for Nyishangte entrepreneurs came in the 1960s, when the king of Nepal made passports readily available to the residents of Nyishang, years in advance of their availability to members of other ethnic groups in Nepal. Prior to this, the number of Nyishangte traders venturing beyond Nepal and India had been limited by the difficulty of obtaining foreign passports and the time and hardship involved with such distant travel. But with the grant of Nepali passports negating the former limitation, Nyishangte traders' international business prospects began to grow rapidly in the 1960s by taking advantage of the initiation of jet airline service between Kathmandu and Southeast Asia, Nepal government programs aimed at promoting international trade, low trade restrictions in Southeast Asian markets, and the emergence of Kathmandu as an important trade entrepot for the burgeoning South Asian black market.

The convenience of airline connections to Southeast Asian market centers such as Bangkok, Kuala Lumpur, Singapore, and Hong Kong greatly increased Kathmandu's importance as a base for Nyishangte trade activities. In the 1970s, a large number of Nyishangte traders began moving to Kathmandu in order to devote their undivided attention to the pursuit of trade business. While trade had previously been of a small scale, seasonal nature, it became a highly capitalized, year-round pursuit for an increasing number of Nyishangte and resulted in the accumulation of unprecedented levels of wealth within the community. Successful traders brought their families to live in Kathmandu, and by the end of the 1980s, more than half of the Nyishangte ethnic group had migrated to the city. With at least one member of practically every household engaged in trade ventures, the Nyishangte emerged as one of the more entrepreneurial and economically successful groups in all of Nepal.

The Nepal government's opening of the Nyishang region to international tourists in the late 1970s opened the door for the rise of tourism enterprise in Manang, as entrepreneurial village residents began to capitalize on the growing number of foreigners visiting Manang by establishing businesses catering to tourists. But tourism businesses in Manang developed slowly during the 1980s, both because the growth in tourist numbers was gradual and because the community's capital resources were still primarily used to finance members' trade activities.

The Manang community's emergence as prominent tourism entrepreneurs can be attributed to the simultaneous decline of the community's international trade prospects and rise of tourism business opportunities in Manang during the 1990s. The concurrent growth of opportunities in tourism and deterioration of those in trade enticed some entrepreneurs who had earlier moved to Kathmandu to return to Manang and attracted the capital of others who remained in Kathmandu. With an explosion of local involvement and investment in tourism business ventures in the late 1990s, the Nyishangte residents of Manang once again emerged as one of the more entrepreneurial communities in Nepal.

In terms congruent with the debate outlined earlier, the commercial opportunities that have become available to the Manang community can be seen as the result of geographic location, ecological environment, geo-politically motivated government-sanctioned privileges, market dynamics, and infrastructure development. The roles these factors have played in the availability of commercial opportunities to the community are described below.

The Role of Geographic Location and Ecological Environment

The geographic location of the Nyishang valley played a seminal role in the historical origins of entrepreneurial activity among the Nyishangte people in two fundamental ways. First of all, the valley's location in the arid, high altitude Trans-Himalaya region provided the essential motivation for its inhabitants to turn their attention to commercial ventures. Secondly, the isolated location of the Nyishang valley away from natural travel corridors linking Nepal and Tibet was critical to the initiation of its population's involvement in both trade abroad and tourism at home.

The Nyishang valley is located along the northern slope of a particularly imposing section of the Himalaya mountain range called the Annapurna Himal. This awesome wall of rock and ice reaches over 8,000 meters (26,000 feet) high and remains continuously above 5,500 meters (18,000 feet) for a distance of over 60 kilometers (40 miles), forming a barrier not only to human travel but to the effects of Nepal's wet summer monsoon weather as well. As a result of its location in the rain shadow of the Himalaya, Nyishang receives only a small fraction of the moisture carried to areas on the opposite side of the range by the summer monsoon that arises from the Bay of Bengal to the south. (7)

Along with the dry climate, Nyishang's altitude is a major constraining factor on agricultural and pastoral production. At such a high elevation, winters are cold and long and only one crop per year is feasible, in contrast to lower lying areas of Nepal where two or three crops per year are the norm. In addition, domestic animals such as cattle, goats, and horses must be kept indoors during the winter and fed dried grass stored in the autumn. As a result, the number of livestock that can be kept is limited by the amount of grass suitable for cutting that can be grown in the vicinity of villages in Nyishang's arid, high altitude environment.

The blend of agriculture and pastoralism practiced in Nyishang has been highly adapted over hundreds of years to the local environmental conditions. Nevertheless, the ecological constraints imposed by the environment have limited local agricultural and pastoral production to barely subsistence levels. Thus, the Nyishangte are similar to other groups residing in Nepal's Himalayan highlands in that ecological constraints imposed by an extreme environment have forced the group's members to look for external commercial means to supplement their limited local subsistence economy.

Historically, the primary commercial opportunity available to the residents of Nepal's Himalayan highlands was trade. However, due to the geographic location of their home region, the type of trade pursued by the Nyishangte was very different than that of other highland groups in Nepal. As mentioned already, the location of some highland communities along natural travel corridors crossing the Himalaya mountain range played a critical role in the ability of those communities to participate in trans-Himalayan trade. Relative to other groups, the Nyishangte were poorly situated in this sense.

Due to the boxed-in location of the Nyishang valley, there was no direct travel route between Nyishang and Tibet. In order to reach Tibet, the Nyishangte had to pass through the neighboring regions of Mustang or Gyasumdo, where local residents had secured a monopoly on trans-Himalayan trade (Messerschmidt and N. Gurung 1974, von Furer-Haimendorf 1975). And, even if the Nyishangte had been able to inexpensively obtain large quantities of Tibetan trade goods, there was not an economically feasible route for pack animals to transport them between Nyishang and lowland Nepal. So, while other Himalayan highland groups in Nepal were able to profitably participate in trans-Himalayan trade, the Nyishangte were excluded from this business. Instead, the Nyishangte had to look elsewhere for commercial opportunities in trade.

Thus, it was Nyishang's unfavorable location for trans-Himalayan trade that led its inhabitants to focus instead on trade in the lowlands to the south, an orientation that was to prove enormously beneficial in the 1960s and thereafter as trans-Himalayan trade faltered and trade prospects in South and Southeast Asia grew. If the Nyishangte had resided in an area that provided easy access between Tibet and lowland Nepal, then they would likely have applied themselves to trans-Himalayan trade similar to the way that Nepal's other highland groups located along such travel corridors did. In such a case, they would have had no reason to turn their attention to the distant markets of India and Southeast Asia, and they would not have endeavored to secure and maintain special government privileges enabling their travel to and trade in such areas. They would have suffered the same devastating loss at the sudden curtailment of trans-Himalayan trade in the 1960s as other highland groups, and they would not have been in a position to take advantage of the Nepal government's trade promotion programs or the international market dynamics and regional transportation infrastructure advancements that turned trade between Southeast Asia and Kathmandu into a lucrative business in the 1960s and 1970s. In short, it is very unlikely that the Nyishangte would have emerged as prominent international traders.

Nyishang's geographic location also put its residents in a position to benefit from the geo-political and economic concerns of the Nepal government. Following the formation of the Nepal State in the late 18th century, government authorities in Kathmandu were anxious to establish control over and win the loyalty of groups inhabiting the country's frontier border region with Tibet. Such concerns, together with Nyishang's strategic location between two major trans-Himalayan trade routes of economic importance to Nepal's government, helped the Nyishangte to secure and maintain favorable travel and trade privileges from the government, as will be described later in the section on geo-politics and government-sanctioned privileges.

Going back to ecology for a moment, it should be pointed out that not only did Nyishang's ecological environment encourage involvement in external commercial activity by constraining agro-pastoralism, it also provided the Nyishangte with local products of high value to trade in lowland markets, as well as the free time to engage in that trade. Because of their limited supply and unique characteristics, various natural products found only in the Himalayan highlands were in relatively high demand in the market bazaars of Nepal and India. During the winter, a slack period of reduced labor requirements in Nyishang due to the unfeasibility of agriculture and pastoralism then, Nyishang residents brought down with them from the highlands such easily transported items as the scented glands of male musk deer, snow leopard pelts, yak tails, birch tree bark, and various roots, herbs, and medicinal plants. In exchange for these, rice could be obtained to make up for the shortage of grains in Nyishang.

The lack of a direct travel corridor between Nyishang and Tibet was not only important to the Nyishangte's eventual emergence as prominent international traders, it was also a seminal factor in the group's more recent involvement in tourism. Due to sensitivities over border security with communist China, the Nepal government would not have opened Nyishang to unrestricted trekking tourism if the region were within easy reach of Tibet. If that had been the case, Nyishang would not have developed into one of the more popular trekking destinations in highland Nepal, and Manang village would not have emerged as a community of prominent tourism entrepreneurs. As it turned out, however, Nyishang's location enabled it to become one of only a few areas in Nepal's highland Himalaya where unrestricted trekking tourism has been allowed. But of course tourists do not visit Nyishang merely because they are allowed to. Most do so because of Nyishang's dramatic scenery, which is a function of the region's proximity to the impressive Annapurna Himal.

The primary reason that members of the Manang community have been so well-positioned to cash in on the commercial opportunities offered by tourism is a matter of control over land. Because of its control of a major portion of the land, including the most strategically located, along the trekking route through Nyishang, the Manang community has been far better situated to take economic advantage of tourism than any other village in the region.

For instance, the development of Manang village itself into the most lucrative tourist market in Nyishang has been aided by its location at an elevation where the first noticeable physiological effects of high altitude generally occur among trekking tourists heading up the Nyishang valley. As a result, nearly every trekking tourist stops to spend two nights or more in Manang to get acclimated to the altitude, eat well, and buy provisions before attempting to cross a high mountain pass beyond the village.

The Manang community also controls all the land on the route between Manang village and the pass, along which most trekkers spend the following two nights as well. Therefore, since most trekkers spend at least four nights in hotels owned by members of the Manang community, they have been able to capture at least four times as much hotel and food service business as the residents of any other Nyishang village, where trekkers might spend a single night, merely pass through, or not visit at all. In addition, the Manang community controls the area in which the region's only airstrip is located, thereby cashing in on the biggest concentration of tourist hotel development in Nyishang other than Manang village itself.

As I have tried to describe, the ecological constraints imposed by poor local economic factors of production encouraged members of the Manang community to look for external economic opportunities to supplement subsistence level agro-pastoralism in their home region. Likewise, the geographical constraints of a boxed-in location away from natural travel corridors between Tibet and lowland Nepal prevented community members from involvement in trans-Himalayan trade and turned their search for trade opportunities elsewhere. But although local ecological and geographical constraints may have played important roles in Manang residents' search for commercial opportunities, these factors alone cannot explain the economic success ultimately achieved by the community. There are many communities throughout Nepal faced with poor local economic-factors of production that are also remote from significant trade routes, but scant few of those communities have emerged as entrepreneurial. A crucial difference has been that the Manang community actually found external commercial opportunities, in the form of exploitable government-sanctioned privileges and market dynamics, and responded to them aggressively and effectively, taking full advantage of the infrastructure advancements of the day, as the following sections will elucidate.

The Role of Geo-Politics and Government-Sanctioned Privileges

The ability of the Nyishangte to conduct trade in lowland Nepal and beyond was helped considerably by changing political circumstances in Nepal during the latter part of the 18th century. Following the conquest and consolidation of some sixty feudal states by the kingdom of Gorkha, the territory that comprises modern Nepal became a country governed for the first time by a powerful central authority, a central authority capable of maintaining peace and making and enforcing regulations throughout the country. This new central authority was also capable of granting special privileges to certain groups, which the government did for reasons suiting its own purposes. From the capital in Kathmandu, the king of this new empire, and in turn his successors, was concerned primarily with three objectives: collecting taxes to amass personal wealth and fund his army, establishing sovereignty over and winning the loyalty and obeisance of the people in newly conquered areas, and maintaining security within the boundaries of the expanding kingdom as well as against foreign powers in neighboring Tibet and India.

The first of these objectives was accomplished through taxing the country's peasantry and the trade of goods from Tibet and India that passed through Nepal. Among Nepal's rural agrarian population, the only things available to tap were labor and agricultural produce, both of which the government and its agents extracted mercilessly throughout the country (Regmi 1972). To collect customs on trade goods, the government set up tax stations along routes of travel into and throughout the country. But with its military forces over-extended fighting battles on the country's far western and eastern frontiers during the latter 18th century, the government in Kathmandu was not in a position to actively enforce its policies in remote, difficult to access, Himalayan highland areas such as Nyishang. As a result, in exchange for pledged loyalty and nominal tax payments, the Nepal government allowed local autonomy to prevail in its far-flung highland territories along the Tibetan border (Stiller 1973, Ramble 1997:396-397). Thus, while heavy taxes and compulsory unpaid labor obligations were extracted from peasants throughout most of Nepal, the Nyishangte paid only a nominal, symbolic annual tribute to the government in Kathmandu (Regmi 1972:35, 116).

The Kathmandu government's second objective, that of winning the loyalty of people in newly conquered areas, was accomplished by not plundering or persecuting them and by honoring their previously existing customs and traditions. As a result, local arrangements that had been in place under the prior rulers were allowed to continue as the territories that comprised the new kingdom of Nepal were consolidated under Gorkha rule (Stiller 1973, Regmi 1984:149-150). In the case of the Nyishangte, this meant that the local travel and trade privileges they had been able to obtain previously from the ruler of Lamjung were recognized and perpetuated by the government of Nepal following the defeat of Lamjung by the Gorkha army in 1784 (N. Gurung 1977:223, Cooke 1985a:308). (8)

The government's third objective of maintaining security throughout the country was accomplished by strictly controlling travel within Nepal as well as trade across the country's border with British India. For nearly two hundred years, a series of isolationist, security-obsessed rulers placed tight restrictions on travel and trade in Nepal, even by the country's own citizens (Stiller 1976; Regmi 1984:11-12, 118-120). Until these restrictions were lifted in the 1950s, official government papers were needed to travel throughout the country (Hagen 1961). But because the Nepal government recognized the previous travel and trade privileges bestowed upon the group by the ruler of Lamjung, the Nyishangte were able to move freely not just through the region of Lamjung, but throughout the whole of the territory comprising the newly consolidated kingdom of Nepal.

The special travel and trade privileges granted to the Nyishangte were documented in a royal decree issued by Nepal's king in 1789 (N. Gurung 1976:299). That this declaration of privileges coincided with Nepal's 1788-1792 war with Tibet suggests that the privileges may have been extended by Nepal's king in exchange for the group's allegiance and support in the war. During periods of conflict between Nepal and Tibet, the Nepal government badly needed the cooperation and loyalty of groups such as the Nyishangte along Nepal's northern frontier border with Tibet. (9) From the government's perspective, the privileges given to the Nyishangte were probably seen as a miniscule price to pay for the goodwill and loyalty of a frontier group whose regular winter migration and small scale barter trade hardly merited the bother of trying to control and tax. From the perspective of the Nyishangte, on the other hand, the group's travel privileges and exemption from paying customs taxes on trade goods were very significant. Unlike other groups in Nepal, the Nyishangte were able to travel freely throughout the country and did not have to forfeit their small, hard-earned trading gains at the government tax stations they encountered along the way.

Over the course of the following nearly two centuries, the Nyishangte were able to maintain their travel privileges and customs exemption via periodic petitions to the government in Kathmandu, which held little sway over the remote frontier region but wished to maintain its allegiance for security purposes. As justification for its requests, the Nyishangte community cited in its petitions to the government the food deficit in Nyishang due to poor local agricultural conditions and the historical precedent of travel and trade privileges previously granted to them by the government. Documented renewals of the Nyishangte's privileges include royal decrees issued in 1802, 1825, 1844, 1857, 1883, 1905, 1933, 1964, 1966, and 1972. (10) Generally, these decrees recognized and perpetuated the rights that the Nyishangte had been granted previously, requested that they continue following traditional rules, and confirmed that they were allowed to travel and trade throughout Nepal without restriction and without paying any customs taxes as long as they paid a nominal annual tribute to the Nepal government.

Although unique in nature, the Nepal government's granting of special trade privileges to the Nyishangte was not an exceptional occurrence. As pointed out earlier in this article, the government granted trade monopolies to a number of groups. What was exceptional about the Nyishangte's receipt of special trade privileges was the group's success in maintaining those privileges even through periods of major change in Nepal's government. It is nothing less than remarkable that the Nyishangte were able to keep their privileges intact, and even expand them, during the 18th, 19th, and 20th centuries despite shifts in political power from Lamjung to Kathmandu and then from Nepal's royal family to the Rana regime and back to the royal family.

In 1846, Nepal's monarchy was reduced to figurehead status after a political coup in which a military general, Jung Bahadur Rana, seized power by means of a bloody massacre of more than thirty leading members of the government. Under the Rana regime, government administration in Nepal was centralized and standardized through the compilation of Nepal's first comprehensive written legal code, the Muluki Ain ("Law of the Land"--Nepali), in 1854. The legal code documented as law the various rights of particular groups, generally affording special advantages to groups enjoying high status in the eyes of Nepal's ruling Hindu elite (Stiller 1993). Despite their low status as a Tibetan Buddhist culture group in Nepal's Hindu-centric caste hierarchy, the Nyishangte were successful in getting their travel and trade privileges included in the national legal code.

That the timing of this coincided with Nepal's 1854-1856 war with Tibet suggests that the inclusion of the Nyishangte's privileges in the legal code, similar to the royal decree of 1789, may have been done in exchange for Nyishangte allegiance and support in wartime, and as an incentive to keep the Nyishangte loyal to Kathmandu following the war. Among the Nepal government's objectives in waging the war of 1854-1856 with Tibet was to control, and thus be able to tax, the major trans-Himalayan trade route along the Kali Gandaki valley in the Mustang region adjacent to Nyishang. As pointed out by Manzardo and Sharma (1975:26), in the mind of the Nepal government, "the local Bhotias (11) were felt to be untrustworthy since they still had split loyalties [to both Nepal and Tibet]." Thus, the monopoly on collecting customs taxes along the Kali Gandaki trade route that the Nepal government granted to certain Thakali merchants "had a dual purpose: to regulate and control customs on northern trade, and to secure the allegiance of the northern border peoples" (ibid.). It is not unreasonable to surmise that the Nepal government's extension of the Nyishangte's own trade privileges during this period also was done in order to secure Nyishangte loyalties to Nepal. The importance of the Nyishangte's allegiance to the government in Kathmandu becomes obvious when one considers Nyishang's strategic location between and adjacent to two major trans-Himalayan trade routes through the Mustang and Gyasumdo regions.

The Nyishangte were no less successful in maintaining their special travel and trade privileges through periods of significant change in Nepal's government during the mid 20th century. The government of Nepal underwent drastic overhauls in 1950, when the royal family was restored to power and a new constitution created, and again in 1960, when a political coup by the king led to the dissolution of the country's parliament and vested sweeping powers in the monarchy. Again, as this was a time of considerable worry on the part of Nepal's government about securing its northern border regions against communist China following the occupation of Tibet, it also seems reasonable to surmise that the government may have had ulterior strategic motives in extending the Nyishangte's privileges. That the Nepal government allowed those privileges to expire shortly after relations with communist China stabilized and the threat of Chinese aggression along the Nepal-Tibet border diminished in the mid 1970s adds even more credence to this idea. (12)

By the late 19th century, the Nyishangte had pushed beyond the Nepal border and were bartering goods in the market centers of northern India. The Nyishangte's ability to travel and trade beyond Nepal's border was facilitated by the Nepal government's expansion of the group's special privileges to include travel' and trade outside of Nepal as well. This expansion of the Nyishangte's special privileges was critical to the initiation of their involvement in international trade during this time. According to Nepali historian Krishna Kant Adhikari (1975:189-190), during the latter half of the 19th century</p> <pre> Nepali subjects were prevented by the Nepalese government from crossing into Indian territory to sell [trade goods]. In order to bring the entire Naya Mulak [land along the Indian border (13)] under cultivation [and thereby increase the Nepal government's land tax revenues], the Nepalese government induced and encouraged Indian subjects to settle in the new territory. With a view to populating the [Naya Mulak], the Nepalese government forbade its subjects to visit India to sell

their goods. To compel Nepalese traders to sell their goods in the Nepalese markets, the government imposed a heavy duty on articles for export. A levy of [six percent] was imposed on all valuable

articles, livestock, and other goods, besides a tax called chungi.

In addition, an export or transit duty called Mahsuli Nikasi was

levied on goods exported to India. The result of this policy created hardship for Nepalese traders who used to sell hill products in the Indian markets freely. </pre> <p>Thus, at a time when the Nepal government prohibited its subjects from crossing the border to trade in India and charged high taxes on exports, the Nyishangte were allowed to travel and trade freely in India and were exempted from paying customs taxes on exported as well as imported items.

But arguably the greatest advantage for Nyishangte traders came with the Nepal government's exclusive grant of passports to the group. That the Nyishangte were granted passports in the 1960s, years ahead of other ethnic groups in the country, is widely known in Nepal, and many people have casually attributed the group's success in international trade to this particular development. However, the reasons behind the passport grant have not been well understood, a situation that has added significantly to the group's enigma. But as the following paragraphs reveal, the passport grant, similar to the previous grants of travel and trade privileges to the group, can be explained by the government's own geo-political concerns.

Following India's independence from Britain in 1947 and communist China's military invasion and occupation of Tibet in 1950, the tiny country of Nepal suddenly found itself in a vulnerable position sandwiched between two antagonistic regional super-powers. Following a political revolution supported by the Indian government, Nepal's King Tribhuvan Shah, whose family had been relegated to figurehead status by the ruling Rana regime since 1846, was able to regain political power in 1950. Under the isolationist Ranas, Nepal had been effectively sealed off from the rest of the world for more than a century. But King Tribhuvan realized that, given the changing geo-politics in South and Central Asia, Nepal's continued independence would require a more open policy toward the West and careful attention to relations with its two immediate neighbors (Rose 1971). Therefore, fearing the expansionist ambitions of communist China, Nepal's longstanding isolationist policy was relaxed, and the country cautiously embarked on a process of democratization and development under the assistance and influence of international donor aid. As part of this process, the central government in Kathmandu initiated a nationwide program to integrate its remote, Tibetan-frontier border areas with the rest of the country in the name of nation-building, socio-economic development, and national security.

Tribhuvan's son and successor, King Mahendra, was especially reliant upon political support from India following a controversial 1960 political coup in which he dissolved Nepal's democratically-elected parliament, banned political parties, jailed opposition leaders, and effectively took over sole control of the government (Rose 1963, Burghart 1994). The tense border war between China and India in 1962 intensified the king's concern with securing Nepal's northern frontier border areas. To forward the objectives of national security and border containment, the king was especially concerned with winning the allegiance of and consolidating control over the Tibetan culture groups inhabiting Nepal's frontier border zone with Tibet. Thus, due to the critical importance of security along the frontier border together with his domestic political vulnerability and reliance upon India for political support, King Mahendra could not afford to overlook a conflict that had occurred in 1961 between Manang villagers and an Indian military expedition climbing a mountain near the village (for an account of the conflict see Kohli 1962).

In the early 1960s, the king embarked on a program of visiting remote areas of Nepal by helicopter as part of a public relations campaign primarily aimed at winning the loyalty and political support of the country's majority rural population in order to balance urban opposition to his autocratic rule. In addition to building grassroots public support, these so-called "Tour Commissions" were intended to appease international aid donors by providing information on local socio-economic conditions and needs and thereby facilitate the government's receipt of international funding for development projects in particularly impoverished areas of the country (Rose 1963).

Ostensibly as part of this program, but undoubtedly with the conflict that had occurred with the Indian military climbing expedition in mind and with an aim to bring a notorious frontier group into the fold of the government's influence, the king visited Nyishang. Following the king's visit, the group's international travel privileges and customs exemption were renewed, and the residents of Nyishang were issued Nepali passports. The Nyishangte thus became the only group in Nepal at the time with access to passports besides those available to government officials, students studying abroad, and Gurkha soldiers in foreign service (see N. Gurung 1976:300, Cooke 1985a: 129).

Although the Nyishangte had long been involved in small scale, seasonal international trade, the exclusive passport grant was the watershed event that led to the group's emergence as prominent trade entrepreneurs. The availability of Nepali passports obviated the need to pay bribes to Indian customs officials to obtain Indian passports for traveling to foreign countries, a practice that by the 1950s had grown prohibitively expensive for many Nyishangte traders (Snellgrove 1961:209). With free Nepali passports, travel beyond India was an easier proposition. Furthermore, the exclusivity of the passport grant meant the Nyishangte had limited competition from other Nepalis in the type of trade they pursued.

With passports facilitating their widespread travel abroad, Nyishangte traders were especially well positioned to take advantage of a number of international trade promotion programs instituted by the Nepal government in the 1960s. While the government's trade promotion programs were officially aimed at boosting the country's level of export trade, they were also used to circumvent government restrictions on imports (van Spengen 1987:209-211, H. Gurung 1980:227-228). For the Nyishangte, this was made even easier by the special concession the group was given to exceed normal government restrictions on imports (Cooke 1985a:79, 130; Zivetz 1992:122). The group's special concession on duty-free import limits gave them a big advantage over other traders since goods imported to Nepal were generally subject to heavy customs taxes. For example, during the heyday of Nyishangte trade in luxury consumer goods in the 1970s, customs duties on consumer electronics imported to Nepal from Southeast Asia were equal to 110 percent of the goods' value (Schrader 1988:348).

Thus, with easily obtained passports, liberal import limits, an exemption from customs taxes, and little competition, the entire group was motivated to avail itself of the commercial opportunities offered by international trade and to take full advantage of the market dynamics and infrastructure advancements (described below) that made trade between Nepal and Southeast Asia increasingly lucrative during this period.

As with trade, geo-politics and government-sanctioned privileges also played a vital role in the availability of the Nyishangte's commercial opportunities in tourism. Under pressure from international aid agencies to improve Nepal's balance of payments for international trade by increasing foreign exchange earnings, the Nepal government began efforts in the 1970s to develop and promote international tourism in the country (Satyal 1999, Banskota and Sharma 1995, Richter 1989). To accomplish this, the government provided investment incentives, tax breaks, and loans to the private sector to expand the country's nascent tourism infrastructure, and the number of hotels, restaurants, and travel agencies grew rapidly in Kathmandu. Under the Nepal government's 1975-1980 fiscal plan, emphasis was placed on expanding tourism to areas outside of Kathmandu by developing and promoting trekking tourism. The scenic and cultural uniqueness and opportunities for adventure offered by the Himalaya mountains provided a strong attraction for foreign visitors, but to promote mountain tourism the Nepal government needed to open up areas in the Himalayan highlands that had long been restricted to foreigners due to border sensitivities with China.

Nyishang had been kept off limits to foreign visitors primarily due to the regional presence of armed Tibetan freedom fighters involved in resisting the Chinese occupation of Tibet. The Khampa, as these freedom fighters were popularly called, received clandestine support from .the United States and operated from camps on the Nepal side of the border from where they conducted raids against Chinese forces in Tibet. Three of these camps were in areas immediately adjacent to Nyishang. With the improvement of political relations between the United States and China in the early 1970s, U.S. support of the Khampa rebels came to an end, and in 1975 the Nepal army was able to remove all the rebel camps from Nepal's highland areas, including those adjacent to Nyishang. (14) As a result, not long after the Nepal government allowed the Nyishangte's special customs tax exemption to expire in 1976, (15) the Nyishangte were provided with a new commercial opportunity. The very next year, 1977, the Nepal government opened the Nyishang region to trekking tourism.

The Role of Market Dynamics

During the early and mid 20th century, Nyishangte trade activities spread through India's northeast frontier region and from there overland to Burma and Southeast Asia. As Nyishangte trade expanded geographically, the nature of the goods exchanged also changed. No longer were their trade activities comprised merely of bartering products from the mountains for food grains from the Nepal hills. Instead, the goods they traded reflected the markets they encountered and the varying demand for items that could be obtained cheaply in one area and sold for a profit in another. For example, during the course of a mid 20th century itinerant trade venture abroad, a Nyishangte trader might purchase inexpensive jewelry in India, sell it in Burma and obtain semiprecious stones, sell those in Thailand and obtain silk cloth and ready-made clothes, return to Nepal and sell those, and then finally return to Nyishang with domestic goods and food grains acquired with accumulated trade earnings. If there was one thing that characterized successful Nyishangte traders, it was adaptability to market dynamics. As market conditions changed in the various regions they visited, so did the types of goods they traded and the itineraries they followed.

In the 1960s, armed conflicts in Vietnam, Laos, and northern Thailand resulted in situations of local scarcity that created profitable conditions for opportunistic businessmen in these regions, including some traders from Nyishang (van Spengen 1987:216-220). During the height of United States military involvement in Southeast Asia in the late 1960s and early 1970s, Nyishangte trade business thrived by selling Nepali and Thai curios as well as inexpensive gemstones from Malaysia to U.S. military personnel in Thailand, Hong Kong, and Saigon. (16) Furthermore, as Thailand grew in popularity as an international tourism destination during the 1970s, Nyishangte traders also sold souvenirs to tourists on Thai beaches.

Low trade restrictions and economic growth in Thailand, Malaysia, Singapore, and Hong Kong provided the Nyishangte with a robust business environment for their trade ventures. Many Nyishangte traders set up mobile sidewalk displays and peddled Buddhist curios in night-time street markets of Bangkok, Penang, Kuala Lumpur, Singapore, Hong Kong, and other market centers of Southeast Asia. In Singapore and Hong Kong, Chinese pharmacies were willing to pay high prices for musk deer glands and medicinal plants peddled by the Nyishangte. The extraordinarily high returns realized on these items by Nyishangte traders, as much as a hundred times more than they had been able to earn from Chinese traders in Calcutta during the 1950s, dramatically raised the profitability of Nyishangte trade ventures (Cooke 1985a:76, 1985b:48, 1986:74).

The profitability of Nyishangte trade in Southeast Asia enabled traders to begin purchasing high-priced luxury consumer goods such as watches, cameras, stereos, and televisions in the duty-free markets of Singapore and Hong Kong for export to Nepal and India. With the benefit of the liberal import limits they were allowed and their exemption from paying customs taxes, Nyishangte traders were able to very profitably import such items into Nepal for sale in its restricted domestic market, which became all the more lucrative as Kathmandu emerged as an important transit point for the Indian black market.

The trade and transit treaties Nepal entered into with India in 1960 and 1963 allowed Nepali traders to transport foreign imports duty-free through India to Nepal. This provided an incentive to Nepali traders to import luxury consumer goods to India from free-trade ports in Southeast Asia. Because India's government had adopted strict import regulations and high protective import tariffs under international donor influenced import substitution industrialization policies, smuggling restricted goods onto the Indian market became a highly profitable venture, and one that Nyishangte traders were quick to capitalize on.

The profitability of smuggling high-priced luxury consumer goods into India and the ease with which Kathmandu airport customs officials could be bribed (Cooke 1985a:96-97, Schrader 1988:210-213) led to the rise of Kathmandu as a major black market trade entrepot for transporting such goods from Southeast Asia to India. The black market for gold was especially lucrative, and following the legalization of the gold trade in Hong Kong in the mid 1970s and the initiation of direct air service between Kathmandu and Hong Kong in 1977, the fantastic profits that could be made by smuggling gold from Hong Kong to Kathmandu attracted some highly capitalized Nyishangte traders willing to take the risks associated with engaging in illicit business (Cooke 1985a:88-90, van Spengen 1987:220).

So far, this section has described how market dynamics in South and Southeast Asia in the 1960s, 1970s, and 1980s provided commercial opportunities to Nyishangte traders. But changing market circumstances have not always favored the Nyishangte. During the early and mid 1990s, commercial opportunities for many small and medium scale Nyishangte traders declined significantly for several reasons.

For Nepali passport holders, traveling to Southeast Asia became much more difficult during the 1990s, as governments throughout the region adopted stricter immigration policies aimed at curbing visa abuses that had been especially rampant among Nepalis due to the frequency with which they illegally overstayed visas in order to earn wages and send cash remittances to their families back home. For visiting most countries in Southeast Asia, instead of receiving an automatic visa upon arrival as they had been accustomed to previously, Nyishangte traders, along with other Nepalis, had to apply for visas at consulates in Kathmandu and go through a screening process. Typically, only well-established business people, who had foreign partners to vouch for them, who could document high levels of legitimate export business, or whose passports contained a large number of previous entry and exit stamps proving they had not overstayed visas in the past, were able to obtain visas.

Visa policies in Hong Kong, which since the 1980s had served as the primary market for many Nyishangte traders, became particularly strict after the territory was turned over to China in 1997. The Chinese implemented rigid immigration rules that precluded many Nyishangte traders from being able to travel to and do business in Hong Kong. Nyishangte traders had previously been able to receive visas on arrival in Hong Kong, but under the new rules, Nepali citizens could not obtain a visa unless explicitly sponsored by a Hong Kong resident.

In addition to the increased difficulty of obtaining visas to travel to Southeast Asia, the length of visas became unpredictable and of too short a duration, typically just one or two weeks compared to one or two months previously, to be of use to small scale street vendors who needed time to hawk enough goods to recoup the cost of their airfare to and from Kathmandu. A one or two-week visa was only sufficient for large scale traders who could conduct their business quickly through established foreign business partners.

Even in cases where Nyishangte traders could obtain visas, increased police enforcement in the 1990s against unlicensed street vending in Southeast Asian cities severely hampered traditional Nyishangte trade practices. Since foreigners with tourist visas were not given licenses for street vending, only well-capitalized Nyishangte with established retail shops in Southeast Asia could continue their trade businesses at prior levels of profitability. Other traders were forced to sell their goods at wholesale prices to shops for considerably lower margins than they had been previously able to achieve themselves as low overhead retail vendors.

The crackdown on unlicensed street vendors by police in Kuala Lumpur, Singapore, Hong Kong, and other Southeast Asian cities not only made it very difficult for Nyishangte traders to profitably sell their wares, it also sometimes resulted in huge losses when a trader's entire stock was confiscated by the police. While pursuing street trade in Southeast Asia during the early and mid 1990s, many Nyishangte were arrested by the police, their trade goods confiscated, and, after serving time in jail, were deported and banned from re-entering the country. (17)

Southeast Asia was not the only place where increased law enforcement in the 1990s hampered Nyishangte trade. Due to pressure from foreign governments and domestic reforms following the creation of Nepal's new democratic constitution in 1991, Nepali government officials began cracking down on smuggling. The closer attention paid to enforcing import policies increased the hassle of going through customs at Kathmandu's international airport, particularly for Nyishangte traders due to their widespread reputation for being involved in illicit trade. Many Nyishangte traders found it necessary to pay higher and higher bribes to corrupt officials to prevent their goods from being held up in customs for lengthy periods. Thus, not only did the risk associated with smuggling increase, the cost and anxiety of engaging in legitimate import businesses also rose.

Import businesses were also plagued with decreasing prices in Kathmandu for imported goods following the liberalization of India's formerly strict import policies. With the opening up of the Indian market for imported luxury consumer goods, demand dropped in Kathmandu for goods formerly smuggled into India from Nepal or sold to Indian tourists on shopping sprees in Kathmandu. The prices that could be attained in Kathmandu for luxury consumer goods were driven down by the fact that, after Indian trade liberalization, Indian businessmen could import goods from Southeast Asia directly to India at lower cost than they could be imported to India through Nepal. As prices plunged in Kathmandu, so did the profitability of Nyishangte trade businesses importing luxury consumer goods from Hong Kong and Singapore (Cooke 1985a:93-94). And Indian businessmen were not the only competition that Nyishangte traders had to deal with. According to Nyishangte informants, the number of Chinese, Thai, Malay, Burmese, and Pakistani traders doing business in Southeast Asian markets increased considerably in the 1990s.

Nyishangte trade businesses were dealt yet another blow by the devaluation of Nepal's currency under International Monetary Fund stabilization and World Bank structural adjustment programs in the latter part of the 1980s. Although the programs succeeded to a certain degree in increasing Nepal's commercial agricultural and industrial output and reducing its trade deficit, the devaluation of Nepal's currency made it more expensive in foreign exchange terms for Nyishangte traders to purchase foreign trade goods and to pay for international air travel and living costs abroad. And if all the problems outlined above were not discouraging enough, the Asian financial crisis of 1997-1998, which wracked national economies and stifled business activity in Southeast Asia, added further to the woes of Nyishangte traders doing business there.

At the same time that their trade businesses in Southeast Asia were failing off, Nyishangte traders faced increased business competition in Kathmandu from highly capitalized and well educated Newar, Indian, Marwari, Tibetan, Thakali, and Sherpa entrepreneurs. Increased competition was particularly acute in the Thamel retail area of Kathmandu, where many Nyishangte business owners were renting shop space. The marked rise in competition during the 1990s drove Thamel shop rents to double between 1992 and 1997.

As the changing international trade and Kathmandu retail markets soured the business prospects of small and medium scale Nyishangte entrepreneurs in the 1990s, some of them turned their attention instead toward the tourism market in Nyishang, where annual tourist numbers had been growing steadily since the late 1980s. (18) Because of the previously described locational advantages enjoyed by the Manang community, entrepreneurs from Manang village were much more aggressive than those from other Nyishang villages in starting up and investing capital in local tourism businesses. And the higher degree of business activity in Manang had a snowballing effect as entrepreneurial community members plowed their earnings back into additional tourism business development, which in turn attracted more tourists to Manang and enabled entrepreneurs to earn even higher returns. The dramatic increase in tourism business development by the Manang community in the latter 1990s is evident in the following chart.

With the simultaneous decline of trade opportunities abroad and in Kathmandu and the growth of tourism business opportunities in Manang, more than thirty Nyishangte families who had earlier migrated to Kathmandu moved back to Manang during the 1990s in order to start tourism businesses there. Even large scale Nyishangte entrepreneurs who remained in Kathmandu found opportunities to participate indirectly in the tourism boom by helping in some cases to finance the development of tourism businesses in Nyishang, a topic that receives more attention later in this article.

Of course, in this section on the role played by market dynamics in the availability of commercial opportunities, I would be remiss not to point out that Manang's tourism market is a part of, and to a large degree dependent upon, the larger Nepal tourism market, which in turn is a part of and dependent upon the overall international tourism market. As such, much of the credit for the steady growth rate of tourist numbers in Manang during the 1990s can be attributed to the similarly steady growth rate of tourist numbers in Nepal during the same time frame. (19) Similarly, the recent decline in the number of tourists visiting Manang can be attributed to the dramatic decline of tourism in Nepal due to the increased violence of a Maoist insurgency in the country since November 2001 as well as to the overarching decline in international travel throughout the world in the aftermath of the terrorist attacks in the United States on September 11, 2001.

The Role of Infrastructure Development

The geographic expansion of Nyishangte trade ventures throughout South and Southeast Asia was made possible by the development of regional transportation networks and markets under British colonial rule of India, Burma, Malaysia, Singapore, and Hong Kong. Utilizing railroad networks within India and Burma and steamship routes linking Calcutta with ports in Southeast Asia, Nyishangte traders ventured farther and farther afield, learning about, becoming familiar with, and taking advantage of commercial opportunities in regions previously unknown to them.

Similarly, the upgrade and expansion of Kathmandu's airport under international development aid enabled large jets used for international flights to land in and take-off from Nepal's capital. The initiation of direct jet airline service linking Kathmandu with Bangkok in 1968 and Hong Kong in 1977 was critical to the vibrant growth of Nyishangte trade in Southeast Asia. Using these cities as transportation hubs, it was-easy for Nyishangte traders to reach other market areas in Southeast Asia by plane, train, or bus. Direct flights also greatly facilitated Nyishangte traders' ability to import goods cheaply and easily from Southeast Asia to Kathmandu. The improvements to Kathmandu's airport and the air service agreements entered into between the Nepal government and a number of international air carriers also provided foreign tourists with quicker and easier access to Nepal, a factor that was instrumental to the country's increased popularity as an international travel destination.

Other transportation infrastructure advancements also played important roles in the growth of tourism business opportunities in Manang. Under the Nepal government's "Remote Areas Development Program," which was supported by international aid donors to counter the threat of communist Chinese influence in remote frontier areas near the Tibetan border (H. Gurung 1997:515), funds were dispersed in remote highland areas of Nepal such as Nyishang for infrastructure development. As part of this program, the difficult and hazardous trail leading up through the Marsyandi River gorge to Manang was improved in 1968 to facilitate the integration of the isolated Nyishang region with the rest of Nepal. The improved trail not only facilitated government officials' and development workers' access to Nyishang but also enabled the transport by pack mules of externally produced food items (e.g. rice, processed flour, sugar, and salt) to Nyishang, thereby greatly increasing local residents' economic ties to and dependence upon lowland Nepal. The trail was further improved in 1977 to enable safer passage for trekking tourists and for the pack animals that have been instrumental in transporting up to Manang the large quantities of food items required by the local tourism service economy.

The Nepal government also funded the clearing of a dirt airstrip near Manang in the early 1980s that made possible the transport of people and cargo via small airplanes. Although some tourists utilize this airstrip to reach Nyishang, the majority spend about a week walking up from a trailhead off of the road that has linked Kathmandu and Pokhara since 1968. The extension of a spur road to Besishahar in the 1990s has further increased the popularity of the trek to Manang by circumventing three days of walking through hot lowland jungle. In addition to expanding transportation infrastructure, it should also be mentioned that the Nepal government encouraged, through tax breaks and loans, the development of hotels and restaurants in Kathmandu and Pokhara to boost the country's overall capacity for hosting tourists.

Nexus of Commercial Opportunity and Economic Cooperation

As the preceding sections have demonstrated, historical circumstances resulting from the geographic location and ecological environment of the Nyishang valley, the Nepal government's geo-politically and economically motivated granting of privileges to the Nyishangte, market dynamics, and infrastructure advancements have all played important roles in the opening up and expanding of commercial opportunities in international trade and tourism for the Manang community. In many ways, the Manang community has been fortunate in the sense of having had access to commercial opportunities that opened the door to entrepreneurship by providing sufficient economic incentives for community members to invest the capital, time, and energy and take the risks required to pursue business ventures.

But while the importance of commercial opportunities to the Manang community's economic success cannot be denied, it was the community's opportunistic exploitation of those opportunities that turned them into actual means for achieving financial gain. In other words, although the availability of commercial opportunity has been an important precursor to the emergence of entrepreneurial activity within the Manang community, it was the ways in which the community responded and adapted to those opportunities that actually drove the widespread development of entrepreneurship in Manang. In its efforts to make the most of its circumstances, the community adapted itself to the pursuit of the different commercial opportunities that became available to its members over time. Thus, although commercial opportunities became available to the people of Manang as a result of geographical attributes and external political and economic forces largely outside of their control, the local cultural characteristics, social systems, and regulatory policies critical to community members' widespread involvement in entrepreneurial ventures were internal manifestations of the community's response and adaptation to those opportunities.

It is important to point out that this article is not about entrepreneurial activity merely by certain individuals within a community; it is about entrepreneurial activity that is widespread among an entire community. For entrepreneurial activity to become widespread in a community, the factors necessary for entrepreneurial activity must be widely available to the community's members. The entire community, or at least a large portion of it, must have access to commercial opportunities and capital and have the right to own business assets and the freedom to engage and compete in business ventures. In general, the commercial opportunities available to the Manang community in both trade and tourism were open to virtually all members of the community. And since a large portion of the community had ample time to devote to business--particularly men since they are typically free from most agricultural work in Manang--the primary limiting factors to participation in entrepreneurial ventures were an individual's propensity for engaging in business, willingness to take risk, access to capital, and, in the case of tourism, access to strategically located land. These limiting factors could have prevented many from engaging in entrepreneurial activity had it not been for the Manang community's entrepreneurial culture, social systems of economic cooperation, and free market oriented regulation of private enterprise that effectively served to diminish these limiting factors and thereby remove constraints on entrepreneurship. Therefore, it was really the interplay of commercial opportunities, cultural characteristics, social systems, and regulatory policies that drove the remarkable entrepreneurial expansions the Manang community experienced in the 1960s and 1990s.

While a combination of various factors has been responsible for the Manang community's overall economic success, none of these factors has played a more powerful role than local social systems of economic cooperation in facilitating the involvement of large numbers of the community's members in entrepreneurial ventures. The Manang community's social systems of economic cooperation have served to attract, pool, and make accessible throughout the community the capital needed to finance the start-up, execution, and expansion of business ventures. To be sure, these social systems of economic cooperation have played a critical role in enabling the community's members to take advantage of the community's favorable combination of commercial opportunities, entrepreneurial culture, and freedom from business-hindering regulatory restrictions and economic expropriation. If commercial opportunities, an entrepreneurial culture, and economic freedom have been the raw materials of entrepreneurial activity in Manang, the community's social systems of economic cooperation have been the all-important catalyst that provided its members the capital needed to engage and succeed in business ventures.

Its members' extensive use of multiple social systems of economic cooperation in financing business ventures has distinguished the Manang community from many other communities in highland Nepal, and even in recent years from other village communities within Nyishang. So, while its entrepreneurial culture and regulation of private enterprise have also been important to the Manang community's economic success, the focus of the remainder of this article will be confined to the social systems of economic cooperation used to access capital to finance business ventures. But before embarking on a description of these cooperative systems, it first makes sense to ask why they have developed to a greater degree in Manang than in many other communities of highland Nepal. For this, we must again consider the historical effects of geographical location and ecological environment in Manang.

The Ecological Basis for Cooperation in Manang

Although the same cannot be said for those who gave up village life and migrated to Kathmandu, the relatively recent rise in scale and profitability of business ventures has done little to change the importance of agriculture for Manang residents. One should keep in mind that the Manang community's involvement in trade dates back hundreds of years, and during all that time Manang residents remained heavily dependent upon agriculture for their survival. Indeed, until the emergence of significant commercial opportunities in international trade in recent decades, trade served as merely a supplemental activity to Manang residents' primary occupation as agropastoralists. But despite cash income from business activities, the entire Manang community has continued to cultivate crops and keep livestock as sources of fertilizer for their fields. Even the wealthiest of business owners in Manang continue to grow the majority of their own food.

Manang village is located on the sun-exposed northern side of the Nyishang valley on a broad terrace created by glacial erosion, which provides a relatively large flat area for fields of potato, wheat, and buckwheat varieties suitable for high altitude cultivation. Stepped terraces have been cut into the gradually inclined slopes above and below the village to accommodate crop fields as well. Even before the massive out-migration of local residents to Kathmandu in the 1970s and 1980s, labor shortages during periods of peak demand for labor hampered agricultural production, and Manang villagers relied upon hired laborers from neighboring regions to help with the harvest (Ramble 1997:395). Due to Manang's arid climate, however, it is the availability of adequate irrigation water rather than labor or suitable land that primarily limits the extent of cultivation possible.

As a result of its location in the rain shadow of the Annapurna Himal, Manang receives considerably less precipitation during the summer growing season than most other areas in Nepal's Himalayan highlands. Several small streams fed by snowmelt from mountain peaks high above the village provide a limited supply of irrigation water during the summer. To get water to each individual field near the village, an intricate system of irrigation canals has been constructed and carefully maintained. As irrigation technology in Manang stops at the level of the gravity-fed canal and hand-held hoe, the time-intensive manual watering of fields keeps local residents in their fields at all hours of the night during the summer in order to fully utilize the limited supply of irrigation water. Even though half the population now lives in Kathmandu and an additional source of irrigation water has been engineered with government development funds, irrigation water is still considered inadequate to meet local demand. The reliance on irrigation must have been even greater several decades ago before massive out-migration left some fields uncultivated, rising incomes enabled the purchase of imported foodstuffs, and a UN-sponsored Nepal government program began providing rice at a subsidized price to the residents of remote areas of the country such as Nyishang.

Historically, the absolute dependence on irrigation for survival in Manang would have served as a powerful motivator to develop systems of mutual cooperation in Manang society. Such large scale undertakings as the building and periodic maintenance of numerous irrigation canals required the cooperative effort of the entire community. And the entire population's need to use those irrigation canals required the community to develop and utilize cooperative systems of shared use among its members.

In Manang today, cooperation between all village households remains critical for the repair of communal irrigation canals and the allocation of irrigation water to private crop fields. Nine separate irrigation canals supply water to the crop fields of Manang and its nearby subsidiary settlement of Tenki, with the group of fields served by each canal forming a separate crop field area. The irrigation canals must be repaired each spring, and when repair work for a particular canal is being conducted every household owning a field in the area fed by that canal has to send one member to participate or else pay a fine to the village government of 500 rupees per day. (20)

Prior to the start of the irrigation season each year, owners of crop fields in each irrigation area form themselves into grouos, referred to as chhopa (Nyishangte), comprised of typically five or six households. The number of households "owning crop fields in each of the nine irrigation areas ranges from fifty to eighty. If, for example, sixty households own crop fields in one irrigation area, then those households might organize themselves into ten chhopa groups of six members each. Each of the ten chhopa groups would take its turn day-by-day using the irrigation water, so that each household owning crop fields in the irrigation area would get to irrigate its crop fields once every ten days. At the time of chhopa group formation, representatives from the various groups draw numbers in a lottery to determine the order in which the grottps will get to access the irrigation water in that area.

On the day of a given chhopa group's turn, the households that comprise the group decide among themselves the order of using the irrigation water that day. Using the irrigation water involves diverting water through a series of canals leading to the household's crop fields and then distributing the water over each field. When one household finishes irrigating its crop fields, typically after two to three hours depending on the number and size of the fields and the flow rate of the water, another household in the chhopa group diverts the water to its fields, and so on. When all of the households in that day's designated chhopa group are finished irrigating their fields, other households with fields in the area may divert the water to their own fields on an ad hoc basis. Since there are no guards charged with the duty of controlling the use of irrigation canals, the complexity and the self-regulatory nature of irrigation in Manang requires everyone's mutual cooperation. Despite occasional misunderstandings during periods when canals are open to ad hoc use, the system works quite well.

There are other examples as well of traditional systems of cooperation among members of the Manang community that continue to be effectively utilized in Manang today. One particularly powerful example is the tosum (Nyishangte) system. The responsibility for regulating livestock in Manang was traditionally delegated by the village council (khamba--Nyishangte), and today is still delegated by the village government (gaabisa--Nepali), to a committee of crop field guardians referred to as tosum. The purpose of the tosum system is to guard crop fields from damage by livestock during the summer agricultural season. A group of eight men, six from Manang village and two from Manang's nearby subsidiary settlement of Tenki, are selected each year to serve as tosum guardians for the crop fields in the Manang-Tenki vicinity. The eight men, all married and all from different households, are selected in a rotating fashion from the pool of households owning crop fields in Manang and Tenki.

The eight tosum guardians divide themselves into two groups of four to patrol the crop fields of Manang and Tenki each day in the morning and afternoon in order to enforce village rules against the presence of livestock in the village during the agricultural season. When livestock are caught in village fields by the guardians, the owner of the livestock has to pay a fine, which the guardians collectively share as compensation for the time and effort involved in patrolling the fields. Although owners of transgressing animals are seldom happy to pay fines to the tosum, the system works because everyone realizes that it is for their own benefit. Everyone would prefer to pay a fine and to have their neighbor pay a fine rather than having their or their neighbor's crop fields irreplaceably damaged by livestock.

Another important example of a traditional system of cooperation still in use in Manang is the regulation of grass cutting. As pointed out earlier in this article, during Manang's long cold winter, the survival of livestock such as cattle, goats, and horses is completely reliant upon the livestock owner's private stock of grass cut and dried at the beginning of the autumn harvest season. As with irrigation, Manang's dry climate limits the amount of grass available for villagers to cut and store, and therefore cooperation among community members is essential to insure that everyone has fair access to this scarce resource.

In Manang, the same regulation of agricultural activities historically carried out by the traditional village council continues to be handled by the Manang village government today. One of the more important of these regulated activities is the starting date for the harvest, which the Manang village government determines for the entire Manang community, including Manang's subsidiary settlements of Tenki, Humde, and Julu. The first day of the harvest is referred to as chi piba ("releasing the grass [from cutting restrictions]"--Nyishangte). On this day, literally everyone in Manang arises in the darkness of midnight to fervently cut grass on the communal lands belonging to the village. By early afternoon, all the grass worth cutting has been cut, collected, and carried to villagers' houses to dry. On the second day of chi piba, villagers are permitted to cut grass on their own private land, and then on the third day the harvesting of crop fields may begin. (21) After the last of the villagers' crop fields have been harvested, the village government announces that livestock may be brought back to the village from the summer pastures and allowed to graze on the remaining stalks of the harvested fields. The regulation of grass-cutting by the village government and the frenzied rush to cut as much grass as possible on the first day of chi piba provide an illustrative example of the co-existence of communal cooperation and individual competition in Manang. By cooperatively restricting the cutting of grass on communal lands until a fixed date, fairness in competing for such grass is assured to all villagers. (22)