(NCCR) North-South is based on a network of partnerships with research institutions in the South and East, focusing on the analysis and mitigation of syndromes of global change and globalisation. Its sub-group named IP6 focuses on institutional change and livelihood strategies: State policies as well as other regional and international institutions – which are exposed to and embedded in national economies and processes of globalisation and global change – have an impact on local people's livelihood practices and strategies as well as on institutions developed by the people themselves. On the other hand, these institutionally shaped livelihood activities have an impact on livelihood outcomes and the sustainability of resource use. Understanding how the micro- and macro-levels of this institutional context interact is of vital importance for developing sustainable local natural resource management as well as supporting local livelihoods. The historic Swat Valley in North-West Pakistan, which is compared in beauty and landscape with Switzerland, and the adjoining areas, which were later incorporated in Swat State, remained rich in forests since early times. These forests remained intact for centuries if not for millennia due to own reasons. The nineteenth century proved a turning point in respect of the exploitation of these forests when some outsiders, mostly the Kaka Khel Mians, started the exploitation of these forests with forest operations in the area and export of timber extracted.