Monetizing antiquities (without selling them)

By Felix Salmon
April 28, 2009
The problem with this, of course, is the arrows going to the left: while it's very easy to get excited about the arrows going to the right (") " data-share-img="" data-share="twitter,facebook,linkedin,reddit,google" data-share-count="true">

The Milken discussion this afternoon on leveraging developing countries’ antiquities resources didn’t quite live up to the promise of its title (“Preserving the Past to Build the Future: Antiquities as an Economic Development Resource for Emerging Nations”) but was very interesting all the same. It was based on a publication full of provocative ideas about how countries can take advantage of the antiquities market and the world of museums, rather than fighting them the whole time.

In true Milken style, the answers had a tendency to look like this:

archbonds.jpg

The problem with this, of course, is the arrows going to the left: while it’s very easy to get excited about the arrows going to the right (“tapping into the U.S. and international investor market could open the door to unprecedented capital resources”), you can be sure that very few governments would be very happy about turning their antiquities into an income stream and then sending that money abroad, especially when a major component of the size of that return “would be determined by the market price of the objects” found at archeological development sites.

That said, the present system is clearly broken — it basically involves equal parts looting, on the one hand, and jealous sniping between countries and institutions on the other. To give you an idea of how broken the system was, the only real progress made on the looting front has been the invention of eBay — which made faking antiquities more profitable than looting them.

Brent Lane suggested that the right model wasn’t debt but rather equity, which made sense to me: if you use a venture-philanthropy approach, where all proceeds are reinvested and none are dividended out, then most of the objections simply evaporate. And Larry Coben gave lots of quite exciting real-life examples, from his work in Bolivia and Peru, of how sites with antiquities can, with very little in the way of funding, be turned into sustainable sources of income for the locals.

I was particularly heartened to see Turkey’s Consul General to LA in the room, being extremely receptive to the ideas being thrown around while also being very realistic about how difficult it will be to sell them to his bosses; Sharon Waxman added a grace note about how if anything was ever going to get done, the most important bit of any project would be to make sure that it never entered the bottomless bureaucracy that is Unesco.

The news of the day was the announcement of something called the Sustainable Preservation Initiative, which is trying to put a lot of these ideas into practice; the formal launch will come in a few weeks. With any luck, by the time this conference rolls around next year, there will be something on the ground to show for it; I’ll be fascinated to see what it is.

3 comments

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I’ve seen this sort of stuff when I was working on debt/equities deals in emerging markets. In the end, you always rely on the good graces of the government involved to get your money back.

How could a trading partner really feel secure that a government in question wouldn’t screw them through graft or outright nationalization? I could see the emergence of “permit fees” being a huge part of this.

Further, what’s to stop the government in question from simply changing the rules in the middle of the game? I’m sure a cash-starved country would look on a valuable finding like the homeless look on thanksgiving. There would need to be some mechanism to look after the interests of investors on the ground.

While the specific solutions in the Milken report may or may not be very workable, they do represent the right approach forward. The approach in the UK, based partly on incentives while encouraging reporting and study has clearly shown to be superior to the top down restrictions of many other governments. Sharon Waxman’s comment is also right on target.

Posted by Jorg Lueke | Report as abusive