Annals o/Touriim Research, Vol. 18, pp.

605-621,
Printed in the USA. All rights reserved.

1991
Copyright

0160-7383/91
$3.00 + .oo
1991 Pergamon
Press plc and J. Jafari

A SOCIAL ANTHROPOLOGY
OF
TOURISM IN LADAKH, INDIA
Universite

Jean Michaud
de Montreal, Canada

Abstract:
Who does tourism benefit when it reaches a small Third-World
community
that was, until then, mostly cut off from the world market?
This article proposes elements for an answer by inquiring into the social
effects of tourism on the emergence of enterprises
in Ladakh, India. In
this case, the article deduces touristic entrepreneurs
profit from their
activities and how they organize to protect their interests. The relevance
of the formal/informal
economic
sectors approach is questioned,
and
some broadening of the analysis is proposed on grounds of cultural and
political economy. Keywords:
tourism, Third World, social anthropology, economics of tourism, local politics, India.
R&urn&
Cet article analyse les effets politiques du tourisme considert 2
travers lapparition dentreprises,
dans le contexte particulier
dune communaute du Ladakh, au Kashmir indien. Lauteur cherche B savoir, dans
ce cas, B quels inter&s se rallient les entrepreneurs
touristiques
et tente
de montrer comment ces gens qui tirent avantage de cette activit& Cconomique sorganisent a cette fin. Au plan theorique,
la pertinence de la
grille des secteurs Cconomiques formels et informels,
en usage dans les
milieux du dtveloppement
international
pour lintervention
au tiersmonde, sera question&e
et un elargissement
de la perspective
sur la
base de facteurs culturels sera propose. Mots-cl&:
tourisme, tiers-monde,
anthropologie
sociale, politique locale, Inde.

INTRODUCTION
During the last 30 years, the number of publications dealing with
the study of tourism has grown to several thousand titles. However, a
disproportionately
large percentage of these studies deal with economic
prospects of tourism in the developed or capitalist economies (e.g.,
see bibliographies
edited by Baretje 1980; Jafari 1979; Mann 1985a,
1985b). When a wide public is being addressed in the terms of this
macroeconomic
approach, as in publications of the United Nations,
the notions generally stressed are the prospects for Third-World
countries to earn foreign currency, to rebalance their external debts, to
develop their infrastructures,
or to modernize or to westernize the host
Jean Michaud
is a Ph.D. research fellow in anthropology
and the executive secretary of the Groupe dkudes et de recherches SW IAsie contemporaine (Facultt
des Sciences
sociales, Universitt
Laval, Qutbec, Canada, GlK 7P4). Having recently completed a
study of the social impacts of tourist development in Ladakh, he is currently undertaking research in Northern Thailand.
605

606

SOCIAL ANTHROPOLOGY

OF TOURISM

societies-i.e.,
to progress in First-World terms (Hoivik and Heidberg
1980). More specialized publications addressing only a restricted audience, often investors, paint a picture of high economic profitability,
low capital investment necessary at the outset, low wages, and favorable conditions in the host country. In microeconomics
of tourismwhere the action is-research
is scarcer. But there is growing interest
in this area, because some optimistic provisions about the fair share of
the benefits among all partners proved to be questionable
(Britton
and Clarke 1987; Turner 1976; Young 1973).
At the local level, the most visible tourist development is lodging,
services, and sales enterprises.
Ever since post-World War II, when
economic projects were established in developing countries, an effort
has been made to draw a global picture of this type of economic activity
in the Third-World
countries. In order to understand and act upon it,
researchers have worked, through reflection and experimentation,
to
elaborate on theoretical constructs accounting for both the accepted
economic model and this Third-World
prospective.
In 1971, Keith Hart, an anthropologist,
proposed a refined concept
of what was until then called the informal economy. This term refers to all
the undercover economic activities aimed at alleviating income losses,
including the constantly mushrooming
traditional as well as not quite
legal activities that are not officially recognized.
At that time, the
informal economic sector paradigm as a flourishing social and economic research subject (Smith 1989), lacked an integrative framework
that could explain more than the mere economic activities it described.
On the grounds of a study carried out in Ghana, Hart (1973) suggested
that most, if not all, Third-World
countries economies were actually
dual, composed of a formal and an informal sector. Based essentially
on the difference between wage-earning and self-employment,
this paradigm was rapidly adopted by international
organizations
and was to
be widely diffused by the International
Labor Organization
(ILO) and
the World Bank.
In its 1972 publication,
Employment, Incomes and Equalip, IL0 proposed a set of parameters,
based on Harts proposals, to identify the
enterprises and persons belonging to each one of these two sectors.
According to these parameters,
the formal sector includes the enterprises that are officially listed: They possess licenses, are registered for
taxation purposes, and are eligible for State funding. By contrast,
enterprises in the informal sector generally operate without legal recognition (and, therefore, without protection) and are neither registered
nor officially taxed. Because they operate outside the system of state
funding and taxation, they are subject to extortion and elimination.
Income is generally low and unpredictable.
Because they can hardly
last long enough to collaborate and to organize in groups with common
interests, informal enterprises have little influence on political decisions. According to this view- but not necessarily included in Harts
proposalsthese two sectors exist in a balanced relationship that ensures social justice through the laws of the free market to the point
that a liberal economic environment
should be sufficient to ensure the
harmonious development of the two sectors.
As naive as this surprising confidence in free market equity may

JEAN MICHAUD

607

seem nowadays,
its shortsightedness
had to be rigorously demonstrated. Applying the sectoral approach to the economies of ThirdWorld countries, researchers,
including Long and Richardson (1978)
and Trager (1987), challenged ILOs propositions; they demonstrated
that, in reality, the informal sector enterprises
are often subject to
regulations whose aim is to adjust their operation according to the
needs of the formal sector. If they are considered to be incompatible
with the development of the formal sector, the informal enterprises are
partially or totally ousted, without compensation.
By allowing competition free range, the state, supposedly a neutral agent in a liberal
economy, favors, according to these authors, the free development of
the market. But these actions lead directly to reproducing the socioeconomic inequalities already prevalent before the beginning of capitalist
development and, ultimately, to a surplus labor force torn away from
the land, deprived of its means of production, from which the formal
sector can henceforth draw according to its own needs.
Through the application of the formal/informal
approach to local
tourist economic development,
many authors came to similar conclusions-for
example, Maurer (1979) on Indonesia, Boissevain and Inglott (1979) on Malta, Reynoso y Valle and deRegt (1979) on Mexico,
Britton (1982) on the Third World in general, Din (1982, 1988) on
Malaysia, Wahnshafft (1982) on Thailand, Farver (1984) on Gambia,
and Jommo (1987) on Kenya.
In light of the criticisms of the ILOs vision of the dual-economy
theory, it could seem fruitless to base yet another analysis on such a
heavily criticized paradigm,
considered outmoded by many. Moreover, since the time of its elaboration,
many related developments
have led to refinements
in the theory that simple binary opposition
precluded. The dual-market
theory (Doeringer
and Piore 1971; Edwards, Gordon and Reich 1976) with questions related to internal
colonialism
and the cultural division of labor (particularly
Hechter
1975), and the split labor market theory (especially Bonacich 1979)
exemplify fields of study related to the theoretical essays linking political economy, class divisions, and ethnicity. Furthermore,
the still ongoing research on the informal sector includes considerations
of the
necessity of this sectors enterprises as an adapted economic answer to
Third-World
economies (Latouche 1989) and of the role of the state in
encouraging
the development of informal sector enterprises (Portes,
Castells and Benton 1989; Smith 1988). Many of these recent trends
integrate social and cultural factors into their explanation of economic
developments;
therefore, they go far beyond the mere classification of
economic activities to offer a more complete view of the phenomenon
as a whole.
Using one of these newer frameworks could have served the purpose
of the present research; however, demonstrating
the importance
of
integrating the social and the cultural into the economic would have
been less feasible. Such demonstration
was part of the objective; and
Third-World
development
implementation
seems to have remained
tied to the original formal/informal paradigm, notably in the work of
IL0 in Africa. Therefore,
the choice was made to address the original
theoretical proposition.

608

SOCIAL ANTHROPOLOGY

OF TOURISM

At the beginning of this research, and in the tradition of the aforementioned critical analyses, one hypothesis seemed to impose itself.
After classifying the tourist enterprises in a community (with hotels in
the formal sector and small craftsmen in the informal sector, e.g.), one
would find an uneven and simple situation in which the big would
crush the small. However, as one can imagine, reality had a few traps
in store for such a hypothetico-deductive
procedure. This article will
demonstrate that the sectoral division is based on another division that
points to identity oppositions crossed by social, religious, and class
cleavages. As its main contribution,
the article will show how social
complexity can be studied by integrating cultural factors into the economic analysis of the tourist development process at the community
level.
This research was carried out in 1988-1989.
A survey of the available literature was first made, followed by a 3-month stay by the author
in Ladakh, Kashmir,
and Delhi during the summer of 1988. All the
available documents from both public and private sources were examined, then open interviews carried out under a variety of circumstances. Within the last 9 years, the author has stayed in Ladakh on
three occasions prior to undertaking formal fieldwork, a fact that helps
to assure better some diachronic considerations
and, thus, compensate
for the briefness of his most recent visit.
A TIBETAN

ENCLAVE

IN INDIA

Ladakh is a high desert valley of the Himalayan

range, open between the chains of the Trans-Himalaya
to the southwest and the
Karakoram
range to the northeast,
and crossed in its center by the
upper Indus river. This administrative
district, the most sparsely populated of all India, composes the northeast part of the state of Jammu
and Kashmir,
alongside the western edge of the Tibetan plateau, a
small part of which is located in India, while the largest part of its
surface is under Chinese control (Figure 1).
This arid and somewhat inhospitable land has, however, been frequented since the fifth century B .C . by trans-Himalayan
caravan traffic that stimulated in the ninth century A.D. the establishment
of
permanent inns to take in and to give fresh supplies to travelers and
their animals. With the generalization
of lamaist Buddhism in the
thirteenth century among the peoples of the Tibetan plateau, and as a
result of the sharing of a harsh ecosystem, a lasting association was
consolidated
between the sedentary peoples of the high plateaus.
Therefore,
despite Ladakhs proximity to areas under Persian and
Muslim influence,
the closest of which is Kashmir,
and despite its
always remaining
a relatively independent
kingdom, the history of
Ladakh must be understood in close association with the geographical,
cultural, political, and religious development of the Tibetan empire.
The traditional occupational
structure, prevalent until 1947, shows
more than 85 % of the population employed in agricultural production
(barley, wheat and a few vegetables),
an activity made possible by
rationed irrigation. Other social strata included nobles, monks, merchants, and caravaneers,
mostly concentrated
in the city of Leh, the

609

JEAN MICHAUD

CHINA

CIIBET)

he
........ cease
- -

Road

Railway
+

llne

International
Boundary

A~rporl

capital of the kingdom.

A certain proportion of caravaneers and monks
was also disseminated along the trading routes, in villages politically
and economically
controlled by the monasteries that dominated their
settings. Landed property was for a long time a privilege of the monarchy, formed in the ninth century; its members encouraged the development of Buddhist monasteries
through land grants in exchange for
religious and political favors. Peasant families rented this land, where
they worked as tenant farmers with the associated rights and obligations (for more detailed ethnographic information see Kantowsky and
Sander 1983; Kaplanian 1981; Rizvi 1983; Singh 1977).
In the 19th century, Ladakh was subjugated by its powerful Kashmiri neighbor. In 1947, following the integration of the Kashmiri king-

610

SOCIAL

ANTHROPOLOGY

OF TOURISM

dom into the new Independent

Indian
Union,
Ladakh
came under
Indian control.
The state - Delhi and Srinagar - subsequently
became
involved in all socioeconomic
spheres,
neutralizing
the economic
disturbances
resulting
from the abandon
of the caravan
trade that followed the closing of the borders
with China
and Pakistan
in 19481950. It built schools, clinics, and local branches
of government
offices,
and carried out large-scale
work projects.
In the villages, public education replaced the religious education
given by the monasteries.
In addition,
India considered
it necessary
to secure firmly a military
presence
in its coveted border areas. In 1962, the Indian army established a permanent
post in Ladakh
in response
to the takeover
of the
sparsely
inhabited
northeast
part of the region
by Chinese
troops.
During
the upheaval
that followed
this takeover,
the caravan
trail
linking Srinagar
and Leh across the Himalaya
was excavated
by the
military,
allowing motorized
vehicles,
for the first time, to enter the
high valley of the Indus river, and from there, to reach Leh. However,
this road is impassable,
now as before,
between
October
and May,
when large sections
disappear
under winter avalanches
in the high
passes. Despite these impediments,
traffic soon became regular,
and a
wide variety
of merchandise
circulated
in quantities
previously
unheard of. This and the permanent
presence
of troops were certainly
two of the most important
factors in the modernizing
of Ladakh
and
its integration
into the world system.
But more was to come. In 1947 this area, cut off from the rest of the
world since the clashes with Pakistani
and Chinese troops, was opened
to outside circulation.
This change marked the beginning
of a demand
for tourist services. Eager for novelty, the most daring Western
tourists
quickly found the road to this Shangri-La,
as did professional
and
amateur
Tibetologists
to whom China
had refused
entry to Lhasa
since the 1950s. The number of tourists annually visiting Ladakh grew
steady from zero to 10,000 between
1973 and 1979. The volume suddenly jumped
to 15,000,
because
of the 1979 opening
of an air link
between Leh and Srinagar,
Chandigarh,
and Delhi, it has since stabilized at that level, as the capacities
of all means of transportation
are
saturated.
More than 80% of the visitors to Ladakh
come from the affluent
countries
of North America
and western Europe,
plus Australia,
New
Zealand,
and, more recently,
Japan.
Because
of the geographical
and
climatic
characteristics
of the valley and their physical consequences,
such as mountain
sickness,
dehydration
and lack of oxygen,
travelers
motivations
for entering
the region are limited to ethnic, cultural, and
environmental tourism (following
categories
of Smith 1989) with an average stay of less than a week. Concretely,
the activities
most popular
among these visitors are trekking
in the adjacent
valleys, visiting the
architectural
manifestations
of religious
life, mostly monasteries,
or
simply wandering
around the town and observing
local daily life.
As a result, and in keeping
with the innumerable
changes
set off
by Indian independence,
the occupational
structure
of Ladakhis
was
modified
in response
to the demands
of a service economy,
although
the more isolated
villages
have not felt the change
so strongly,
as
tourism
does not directly
reach them.
It is the face of the capital,

JEAN

MICHAUD

611

inhabited today by 8,500 people, that has found itself slowly changed
by economic development:
the building of hotels, restaurants,
and
other businesses, the execution of more public work projects, and an
increased demand for services of all sorts. Thanks to advantageous
financial conditions at the State Bank of India, private tourist enterprises have been created on a regular basis. For reasons already alluded
to, the central state was only too happy to encourage this new vector
of lasting occupation of the territory.
For a region without industries and whose natural resources are
possibilities.
difficult to exploit, tourism offers seductive economic
However, after several years of this new form of development,
local
leaders soon realized that the community had changed. The old and
stable power structure was based on a strong clergy and a very ancient
monarchistic
regime; but a strengthened commercial bourgeoisie had
grafted itself on top of it, and a new petite bourgeoisie was now emerging,
composed of intellectuals and of young people who had been educated
in the Indian education system. Adopting as yet unknown political
paths, these new actors are fueled by the development of tourist entrepreneurship.
Both their business success and modernization
have contributed to their gaining the seats of power, whereas tradition would
have dictated that they wait their turn before taking the place left to
them by the elders whenever judged appropriate. Such novelties generate a growing concern among the traditional upholders of local power.
In an attempt to understand the part played by the developing tourist entrepreneurs
in this sociopolitical context, a more attentive analysis of its concrete basis is proposed. This approach to the city of Leh
applies the analytic grid of formal/informal sectors.
Informal

Sector Enterprises

in Leh

The informal sector in Leh includes a primary sphere of activity

stemming from tourism: that of lodging. Approximately
two-thirds
(for exact numbers, see Michaud 1989, 1990; Pitsch 1985) of all tourist
lodging in Leh are guest houses that are owned by Ladakhi families
originating for the most part in the well-to-do stratum of the peasantry.
Typically,
before its conversion into a guest house, the whole house
was occupied by family members, and as they left to study or marry,
or if they died, the free space was put to use. As has been observed
time and again, lodging visitors demands little work compared to agricultural labor, and it makes unoccupied space profitable.
A second sphere of activity in this sector is the employment of small
self-employed entrepreneurs by tourist agencies. This includes primarily freelancers in the areas of guiding and short-distance
transportation. The business operation of these freelancers also follows the family
model and is rooted in the secular practices of the ancient caravan
trade. This sphere may include craft-related activities such as the making of clothing and of simple utilitarian objects, or music. Such material production being of a traditional and domestic nature, it hardly
reaches the tourist market because it holds little appeal for most tourists. Folk entertainment,
on the other hand, is in demand.
Businesses,
the third sphere of this sector, often originated in the

612

SOCIAL ANTHROPOLOGY

OF TOURISM

period prior to the arrival of tourists: tea stalls, restaurants,

general
stores, vegetable merchants, and services such as tailors, woodworkers,
and barbers. These small enterprises,
termed restaurant business and
traditional small-scale trade, have provided residents with their means of
reproduction for generations, and they have simply continued to do so
since 1974, with the additional benefit of an increased demand during
the summer.
The third sphere also includes trade by Tibetans who sell souvenirs
in open-air stalls along certain streets in Leh, an activity that they
alone pursue. These Tibetans do not normally live in Ladakh; they
only come for the tourist season. When they left occupied Tibet, India
took them in and settled them in camps in the Dekkan, far from the
borders but with considerable freedom of movement. They offer tourists goods brought with them, such as jewelry and liturgical objects
made by fellow Buddhists settled in different parts of the Tibetan
diaspora in India and Nepal. Actually, Lamaist souvenirs sold in Ladakh are not produced there because the local clergy forbids the free
trade of Ladakhi religious artifacts by the local population and controls
the production of new items.
In accordance with the typical description of this economic sector,
there are no organized groups of informal entrepreneurs
based on
common interests. Neither do they have any functional economic links
among them or with the outside. The operational extent of the enterprise ends with the family network.
Formal Sector Enterprises
In the formal sector, lodging establishments
are of the hotel sort. A
tenant is entrusted with the management
and pays the owner a percentage of the annual profits. For these hotels, along with the land
they are on, belong to a landlord who does not work in them. It is
within the wider old group of landowners-that
is, the aristocracy, the
clergy, and merchant and caravaneer bourgeoisies - that the subgroup
of tourist establishment
owners emerged. Seeing this opportunity for
quickly earning money after the shortages that followed the closing of
the borders, their motivation to get involved in this area grew with the
rapidly increasing demand for tourist services from the second year
after the region was opened. Advantageous
conditions for loans from
the State Bank facilitated the conversion of a small plot of cultivated
or unoccupied land into a lot available for the construction of a subsidized rental building.
Hotel managers come from outside Ladakh (in order of importance,
from Kashmir, Punjab, and Delhi) and stay in the area only for the
duration of the tourist season. They are included in the formal sector
primarily because of their ties to resources outside the community,
in
particular the importation
of capital and manpower. They have the
knowhow necessary to the running of a hotel, including administration, accounting,
languages spoken by the clients, and especially the
ability to establish connections
with other enterprises
in the formal
sector.
The souvenir business in boutiques,
contrary to that in open-air

JEAN MICHAUD

613

stalls, is structured according to the same owner-tenant

model as hotels. Shopkeepers are often related to hotel managers with whom they
trade favors and clients. The nature of what is sold generally depends
on the origin of the tenant and his or her supply sources and, thus,
often has little cultural or economic relation to Ladakh.
The travel agencies in Leh all belong to outside interests based for
the most part in Srinagar and Delhi. Their activities consist in ensuring
the continuity of service offered by the parent company to their clients,
most of whom are in organized groups and have agreed on a package
deal. Each of these agencies fosters advantageous business connections
with local entrepreneurs,
usually chosen on the basis of partnerships
formed on other common operating grounds, e.g., in the valley of
Srinagar.
Finally, tourism has brought to Ladakh a growing number of visitors, some of whom have fraternized with natives concerned about the
social transformations
of recent years. Following such contacts, a few
durable associations were established that included mostly educated
young people and local intellectuals.
One of them is the Ladakh Project, which was implemented in 1978 under the initiative of a Swedish
linguist. She obtained international funds and Indian state recognition
in 1983 for a nongovernmental
organization
born from the Ladakh
Project: the Ladakh Ecological Development
Group (LEDeG).
The
Ladakh Project then moved its main office to England, the location
from which it still funds the group. In addition, it has since enlarged
its field of action to other Himalayan regions such as Bhutan. Another
new association is the Students Educational and Cultural Movement
of Ladakh (SECMOL).
Started in 1988 by a young Ladakhi engineer
concerned
with the preservation
and promotion
of traditions,
the
movement soon organized itself as a broker of local folk music and
dance to be presented and explained to the tourists. It also provides
guided tours to monasteries.
The profits thus gained are distributed
primarily to local Buddhist students to help them achieve highereducation degrees.
Both movements of the 198Os, LEDeG and SECMOL,
present several similarities. They define themselves as a support to the community
and to its traditional values, and they play a role in promoting the
control of popular education by Ladakhis themselves. In an effort to
achieve their objectives, they have chosen to take the form of an enterprise (the principal focus of this study) and to derive the majority of
their income from subsidies and the sale of services related to tourism.
To carve out a place for themselves in the tourist market, they have
used strong political allies with nationalist leanings, at least culturally,
like the royal family and the association of Buddhist monasteries (the
Gompa Association).
They benefit from foreign capital and use a specific knowhow gained in the institutional school system. Their organization is not usually based on family connections, although the Ladakhis active in this sort of business almost all belong to the wealthy
families from the agricultural community, the civil service, or the aristocracy. They compose the core of a newly forming local petite bourgeoisie.
When the author arrived at this point in the classification of enter-

614

SOCIAL

ANTHROPOLOGY

OF TOURISM

prises during the fieldwork

(and before the analysis of data), several
informants
pointed out that cultural factors,
such as the endogenous
or exogenous
origin of entrepreneurs
and their religious
affiliation,
constitute
important
elements
that, in their eyes, could explain
economic behavior.
They argued that any interpretation
of the phenomenon that does not take into account such considerations
could only be
partial.
Because
the intent of this study was to test a particular
economic theory, it was decided that these cultural factors could be considered alongside
this theory,
although
the outcome
of such a graft was
unpredictable.
Following
this decision,
all the groups of enterprises
that had been listed were reclassified,
this time taking into account
these two additional
sets of factors.

The Origins and Religious Affiliation

of the Entrepreneurs

Despite a certain number

of publications
dealing with endogeneity
and exogeneity
in tourist development
(e.g.,
Moser
1986), there is a
notable
absence
of both classificatory
tools and of a clear internal/
external dialectic paradigm.
In addition,
it proved difficult to establish
with certainty
the criteria
used by Ladakhis
to classify their fellow
countrymen,
a fact that led the author
to adopt an arbitrary
time
boundary.
Thus,
all permanent
residents
of Ladakh
before 1973 and
any person who is married to such a resident,
as well as any child who
had since come into such a family, were considered
endogenous.
The
endogenous
tourist entrepreneur
is, therefore,
an individual
or group
who corresponds
to this definitionothers will be considered
exogenous-and
who invests time and/or capital in an economic
activity
dealing with tourists and/or intermediaries
of the tourist industry.
The business
activities
related
to tourism
and stemming
directly
from endogenous
actors are to be found mostly in the areas of lodging,
guiding and transportation,
crafts, and, to a lesser degree,
trade and
the food business.
These
activities
involve landowners,
guest house
owners, guides and their families,
taxi drivers, musicians,
and women
who produce salable crafts. SECMOL
and LEDeG
must be added to
this list, because they recruit only among the Ladakhis.
The exogenous
entrepreneurs
are, practically,
those who have no
local permanent
residence
and whose business
activities
are concentrated in the tourist season. These entrepreneurs
are involved in the
hotel business,
in travel agencies,
and in the sale of souvenirs.
The
majority
are tenants
(e.g.,
hotel managers
and shopkeepers).
Other
exogenous
entrepreneurs
include
self-employed
guides from outside
the area who accompany
small informally
organized
groups,
and Tibetan merchants.
The great majority
of these entrepreneurs
are part
of family networks whose members
are already involved in the tourist
business,
mainly in Srinagar.
Whether
endogenous
or exogenous,
these entrepreneurs
belong to
several different
religious
groups.
The main ones in the last several
centuries
have been lamaist
Buddhism
and Islam,
with the former
outnumbering,
by far, the latter.
(Although
this point has not been
specifically
analyzed in this research,
it may be helpful to keep in mind
that Ladakhi
Muslims
belong
mostly to the Shia group,
while the

615

JEAN MICHAUD

Muslims from outside Ladakh, mainly from Kashmir,

are Sunni.)
Buddhists comprise the majority of the landowners and tourist entrepreneurs involved in the operation of guest houses, restaurants,
and
permanent businesses, as well as those working as taxi drivers, guides,
and craftsmen. For historical reasons, the group of landowners and of
operators of permanent businesses contain a greater number of MUSlims than the other categories, but they are still a minority. The SECMOL and the LEDeG are also Buddhist. Muslims are in a majority
in tourist activities associated with the managing of hotels, the running
of boutiques,
self-employed exogenous guiding, and travel agencies.
The combination of all these classifications,
considered in the processing of data, appear in Figure 2, from which some of the main conclusions of the research will be drawn.
Analyzing

the Dynamics of Tourist Entrepreneurship

The data shown in Figure 2 at first glance indicate some simple

correlations.
First, there is a positive relationship between the endogenous sector and the Buddhist denomination.
This is hardly surprising,
given the high degree of religious homogeneity among the Ladakhis.
Consequently,
there is an obvious relationship between the Moslem
denomination
and the exogenous sector; this is a question of majorities, because there are a certain proportion of Hindu and Sikh entrepreneurs from Delhi and Punjab. Next, it may be noted that almost all of
the exogenous enterprises belong to the formal sector. The exportation
of capital, goods, and manpower,
in a place other than ones usual
operating grounds, demands a solid economic base. Therefore,
it is
understandable
that characteristics
associated with the formal sector

E
X
0

INFORMAL

PORNAL

ciotel mmagers

a
E
N
0
"
S

E
N

D
0
0
E
N
0
u
s

Travel

agents

Self-eaployed
SGWBSIR

souvenir businesspeople
in boutiquea

INOPENUR

N. P. PETITE

GUEST

SECHOL

BOURGSOISIR:

AND LEDEG

STALLS

ilOUSl&3 OWNERS

TRADITIONAL
TRADBRS

IANDOWNBRS:

guides

BUSISESSPSGPLB

SHALL SCALE

RSSTAURANTOWNERS

ARISTOCRACY

- CLERGY
- HERCHANT BOURGEOISIE
- caravaneer bourgeoisie

SNALL
SEW-ESPLOYED
ENTREPRENEVRS:

- GUIDES
- DRIVERS
- VARIOUS SELF-EHPL.

Note : The CAPITALS indicate a Buddhist affiliation for

the majority of the individuals included in the named
category. The other categories shall be considered with
a Muslim majority.

Figure 2. Position of Entrepreneurs According to

Sectorial Division,

Origin, and Religion.

616

SOCIAL

ANTHROPOLOGY

OF TOURISM

are necessary to an exogenous business in order to operate a profitable

tourist enterprise in Leh.
The only two types of foreign businesses in the informal sector, the
sale of souvenirs by Tibetans and small-scale guiding, are exceptional.
These activities are facilitated by the religious and cultural proximity
of the Tibetans,
compensating
for the travel and expenses necessary.
It is most likely that any non-Lamaist
businessperson
on the same
level and in the same area would fail. As for the guides, their small
number and their economic weakness explain their lack of importance
in the balance of power among the exogenous entrepreneurs.
Ladakhs
exogenous/informal
group is negligible as a distinctive entity. It might
have been totally empty, if only because of the near impossibility
of
informal enterprises setting up in a rather inaccessible
place, with a
disheartening
climate and few alternatives for procuring basic provisions, unlike many urban peripheries in the Third World.
The formal/exogenous
group shows a high degree of internal cohesion on the economic level. The exogenous businesspeople
are of various origins and are tied to each other first and foremost by economic
activities on a common territory,
their religious and cultural background being of secondary importance.
On the other hand, the endogenous/informal group is economically eclectic, with neither organization nor much capital; its members compete with each other despite
territorial,
cultural, and religious ties. One might have thought that,
among the endogenous entrepreneurs,
the sharing of common origins
would constitute a cohesive factor that might transcend strictly economic interests. For instance, the LEDeG and the SECMOL
use nationalist rhetoric on the cultural level that tend to discredit exogenous
entrepreneurs,
whose cultural invasion and proselytizing
they denounce (LEDeG
1988; SECMOL
1988). However, at the same time,
their potentially harmful initiatives regarding exogenous entrepreneurs
are to this day limited to controls in the area of monastery guiding, in
particular by making an official recognition
of competency
compulsory. They collaborate in this action with the clergy (the Gem@ Association). This no doubt is a restrictive measure, but not an exclusive
one. The economic consequence
of such an action is first of all to
compete even more with self-employed
guides, both exogenous and
endogenous-who
have been classified in the informal sector-rather
than with the travel agencies who then simply hire locals on contract
to provide such services. The agencies are unconcerned
that these
contract employees now have to be accredited to pursue their activities,
for this new qualification has not led to an increase in the wages paid
by the agencies to these local freelance guides.
Between the two extremes, the endogenous/formal
group contains
more nuances. Until recently, it consisted only of landowners whose
interests converged on many levels. The longstanding complementarity between the clergy and the aristocracy has diversified: the modern
commercial bourgeoisie and the new petite bourgeoisie now constitute a
broadened but relatively homogeneous
group in terms of economic,
political, and ideological aims. The caravaneer commercial bourgeoisie, which has always been composed of a certain percentage of Muslims, shows a lesser degree of religious homogeneity.
However, this

JEAN MICHAUD

617

potential source of friction has been contained in favor of a more

desirable common interest: economic and political stability.
With regard to the landowners, they are defenders of the traditional
Ladakhi identity, especially in the case of the clergy and the aristocracy. They are privileged partners of exogenous entrepreneurs,
to
whom they rent their facilities and thanks to whom they derive what
has become the majority of their income. The landowner group includes the majority of political leaders, both traditional and modern.
In other words, they control the endogenous participation of the state
on the local level, and are at the same time involved in economic
activities in the formal sector. Ideally, because of its strong political
position, this group could act to encourage the increased development
of the informal endogenous enterprises trapped in the game of competition. The pretext of protecting their traditional cultural heritage would
be easily justified and would correspond to the nationalist ideas they
support. It seems that they do no such thing.
Concerning the formal/informal division, it has been explained that
according to critical studies, the formal sector tends to subjugate the
informal sector enterprises according to its own economic needs, and
in time to absorb its most weakened elements. This tendency is confirmed in the case of Ladakh. The hotels, which are allied with the
travel agencies and the shopkeepers, are in direct economic competiand traditional
small-scale
tion with the guest houses, restaurants,
businesses, Tibetan souvenir salespeople, and, to a lesser degree, selfemployed guides and taxi drivers. The SECMOL,
with its touristrelated cultural activities, seriously encroaches on the terrain of selfemployed drivers and independent traditional artists. The LEDeG and
several hotels offer restaurant services that eat away a significant part
of the traditional
restaurant
owners market. As such, competition
could only be contained by strong protective measures on the part of
the state; there is reason to believe that the small-scale, self-employed
businesspeople will grown weaker and eventually disappear. The state
has historically sided with the members of the bourgeoisie, the aristocracy, and the local clergy, themselves deeply involved in the formal
economic sector alongside the shopkeepers,
hotel managers,
travel
agents, the SECMOL,
and the LEDeG.
In the case of the latter two
as suggested earlier, the study may not have fully taken into account
all of the dimensions of the SECMOLs
and the LEDeGs cultural and
educational implications in community life. What is at stake here is
their role as entrepreneurs.
For a more global - and rather more optimistic - appraisal,
see Goerings The Response to Tourism in Ladakh ( 1990).
CONCLUSIONS
On the analytical level and as far as the dual economy paradigm is
concerned,
the results of this study coincide with those cited at the
beginning
of this article, especially Britton (1982), Jommo
(1987),
and Wahnshafft
(1982). The Ladakhi case study contributes to their
demonstration
that when the laws of the market are given free rein,
and in the absence of compensating
state regulations,
the harsh eco-

618

SOCIAL

ANTHROPOLOGY

OF TOURISM

nomic struggle provokes the weakening and eventually the disappearance of many informal enterprises (in this case, the small-scale businesses and traditional
restaurant
services).
This would be to the
advantage of formal sector enterprises that swallow and digest them
and incessantly spread their influence. In a strictly economic perspective shared by these authors and those they criticize, that is all that
can be asserted.
By adding cultural variables (i.e., the endogenous
or exogenous
origin of entrepreneurs
combined with their religious orientation),
it
has become clear that small-scale businesses in Ladakh are being weakened, despite the fact that traditional elites and the new petite bourgeoisie
advocate an alliance among natives with the objective of saving their
cultural identity and limiting outside power. Exogenous Muslims operating formal enterprises are not very affected by protective actions,
but small-scale entrepreneurs
and endogenous restaurant owners are
paying a price that is increasingly high. The conclusion that imposes
itself to the analysts mind is that, consciously or not, local elites are
actually subordinating
the promotion
of a native takeover of businesses - and the preservation of their cultural identity that could stem
from this takeoversecond to the promotion of economic ties with the
formal sector exogenous entrepreneurs.
This attitude could lead to the
demotion of the informal sector enterprises that are too busy competing
with each other to realize the long-term danger inherent in this reciprocal noncollaboration.
These additional factors indicate that the scope of the subject is far
richer than that provided by the mere application
of an economic
model which is still the dominant trend in tourism research. This study
reveals some social foundations and political consequences of economic
dynamics; it shows both the economic activities involved and the power
and class struggles between those vying to benefit from tourism. In
this context, the essential question of the role of the state as a protective
agent for small-scale economic activities can fruitfully be brought out,
including its composition,
the influences it is subjected to, and the
interests that feed it and to which it answers. In this vein, the debate
about reciprocal preeminence
of class and ethnic phenomena in political economy is still very persuasive (Balibar and Wallerstein
1988;
McAll 1990). This debate is at the center of the question of the development of enterprises in the Third World and of its impact on the local
balance of power. It certainly can stimulate research on the expansion
of the global tourist industry and its consequences
on local communities (the author is presently undertaking a similar analysis of tourism
in communities in northern Thailand).
In any case, such an alternative
should at least prove to have a wider scope and a greater depth than
that provided by perspectives strictly oriented around the economy.
EPILOGUE
Most of the data used for this article were collected in 1988, 1 year
before the beginning of a still active political unrest-the
author is
reluctant to designate this unrest as religious, a widespread term in the
Indian Press. Direct intervention by kashmiri armed police led to the

JEAN

MICHAUD

619

killing of three Buddhist Ladakhi protesters in Leh, on August 27,

1989. Not much reliable information has been made available outside
Ladakh to analyze properly the causes and consequences
of this turmoil, apart from Osmastons (1990) general appraisal: The Kashmir
Problem. Nevertheless,
an essential fact upon which the protests are
based is the Buddhist Ladakhis (majority?)
desire to shift their status
within India from a mere district in the state of Jammu and Kashmir
to a more autonomous one. The Scheduled Tribes Status has been
offered by Rajiv Gandhis government.
But after Gandhis party was
defeated in the 1989 national elections, Indias government has refused, as of this writing, to implement its predecessors commitment.
It seems that a deterioration
in the relations between Buddhist Ladakhis and Muslim Kashmiris
in the area of tourism is among the
main sources of tension causing the problem. If so, the economic and
political pattern illustrated in this article may be useful in analyzing
the underlying issues at stake. 0 0
Acknowledgments-The
author wishes to thank Mary Richardson
for having so aptly
translated this text from French, and the Fondation Desjwdins as well as the Fonds pour la
formation de chercheurs et Iaide ci la recherche (Gouvernement
du Qutbec)
for substantial
financial support during this research.

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I

Submitted 11 May 1990

Revised version submitted 12 October 1990
Accepted 9 November 1990
Final version submitted 12 March 1991
Refereed anonymously
Coordinating
Editor: Valene L. Smith