happy informal new year

It's that time again. All across the planet, thousands of men and women are standing on streetcorners selling noisemakers and ugly sunglasses shaped to say 2010. For the coming day or two, hawkers and other unlicensed street vendors will be out in force in almost every country of the world.

The trumpet sellers of Java are reporting very slow sales, according to this article in Vivanews. One sidewalk vendor said he had expected to move more than 1,000 trumpets, but so far has rung up just 200 sales. Bad weather may have something to do with it. And people everywhere are facing tough times.

But that's no reason not to have fun.

A big Shadow Economy is a good thing

Researchers at Deutsche Bank--the German multinational--have reached a staggering conclusion about the informal economy: it's a good thing. The Financial Times has details.

From the article: "Countries with a high prevalence of moonlighting builders, unrecorded cash transactions, missing invoices, tax evasion or illegal activities such as drug dealing, have seen smaller contractions during Europe’s worst downturn since the 1930s than more honest neighbours." For instance, "Greece’s economy has shrunk only about 1 per cent this year – compared with about 4 per cent for the European Union as a whole."

Moroccan rhythms

The Moroccan government reports a boom in the informal economy, according to a report in the Middle East North Africa Financial Network.

The statistics are impressive: 40,000 new businesses (and only one in five new businesses is registered with the government.) In 2007, according to the government survey, informal businesses in Morocco created more than 2 million jobs and had a turnover of 279.9 billion Moroccan Dirhams, or about $36 billion US.

In Morocco, the informal sector is growing way faster than the formal.

it's hard to be a saint in the city

How do you survive when you're forced to migrate to the city? Join the informal economy.

Reuters reports on Grimaldo Hernandez, who fled death squads in rural Colombia and brought his family to Cartagena. There, he earns $200 a month by selling tinto (the local name for coffee) on the streets of El Pozon, one of Cartagena's shantytowns. His wife, too, has taken to the street and sells ices around El Pozon.

All told, one half of the workers in the world work in the informal economy. For most, like for Grimaldo Hernandez, this is not a crime. It is, instead, the way to survive and find a firm future for their families.

smart strategy

In the India's West Bengal, itinerant street vendors are pushing the State government to implement a proposed national rule to protect street hawkers and marketeers.

This is an important move. In countries like India, where so many people are dependent on street vending for their livelihoods, it is crucial to organize and direct their energies towards political and policy changes.

real or fake improvements

I just got back from a few days in Lagos, Nigeria, and the visit left me greatly concerned.

The so-called 'Kick Against Indiscipline' program (KAI) through which the government criminalized street trading has led to 5,000 arrests over the past three months, reports 234next.

The has led to better traffic flow on some major streets, but the city seems somehow stunted. Gone are some of the dreaded and violent area boys, but the police action has also pushed out tens of thousands of merchants: women who braided hair at the roadside in their communities....young men who sold telephone recharge cards....families that earned enough to eat by selling yam or suya (grilled meat)...auto mechanics with roadside stalls.

The government argues that the street vendors created a threatening environment in which criminals could operate. But it is not criminal to braid hair or fix cars. And the enforcement exercise seems unfairly targeted against independent entrepreneurs. The kids hawking Gala (a sausage roll manufactured by the massive UAC Foods conglomerate) are still doing business openly. Perhaps the government doesn't want to tangle with the business methods of this major corporation.

People who work for Governor Babatunde Fashola point to rising real estate prices in Oshodi, which has been stripped of much of the street vending that used to characterize the area (the photo at the very top of this blog is of Oshodi in 2007.) But rising land values and rent costs does not help the mass of people. Once again, it seems, a thriving community of lower income entrepreneurs gets the boot and the rich get a boost.

Now the government reports (see this article from the Vanguard newspaper) that it is convening a meeting with market women, artisans, representatives of trade associations and other participants of the informal sector. Here's the description of the purpose of the get-together: According to the Commissioner for Information and Strategy, Mr. Opeyemi Bamidele, the programme with the theme: “Increasing the efficiency of the informal sector: For a vibrant economy,” would avail them the opportunity of knowing what the administration had done to improve their well-being.

It doesn't seem to me that the KIA program has increased anyone's well-being. And, at least in this description, the Governor's meeting seems more like a political ploy than a chance to work cooperatively towards a better future for Lagos.

Back in 2007 and 2008, Administration officials told me that it was likely that 80 percent of the working people in Lagos are active in the informal economy.

The informal is, indeed, the economic strength of Lagos. And the way forward for the people of Lagos would seem to be for the government to create lasting and strong partnerships with informal workers and their associations, rather than simply criminalizing street trading and driving these businesses further underground.

A good example of this type of policy of working together actually exists right in Lagos: a year ago or so, the Governor decided to require motorcycle taxi drivers to have helmets. His policy gave drivers a phase-in period to acquire them, and his administration promised to pull drivers who didn't have helmets off the street. The result: 99.9 percent of the okada drivers acquired 2 helmets each--one for them to wear and one to give to the passenger. Similarly, the government has another rule limiting each okada to one passenger (previously it was common to see two or three people crowding on the back of one bike.) For the most part, the drivers have complied.

Why not take a similar cooperative approach with street vendors--perhaps through a licensing program. Working together is always better than burning people's kiosks and arresting them for the crime of trying to make a living in tough economic times.

a union of informal workers

The Zimbabwe Congress of Trade Unions is organizing workers in the informal sector, Scoop reports in an interview with the vice president of the ZCTU, Vimbai Zinyama.

The idea is to reach out to workers where they are actually working, instead of being locked into a factory-based organizing model.

"A salesperson working inside a building by no means shares the same status as the salesperson laying out vegetables on the street in front of the same building. Yet both of them make the economy work and pay taxes. Informal economy workers have to cope with red tape and harassment from the police authorities, who often drive them out of their workplaces. They are pushed to the sidelines of the system, without any rights. Our aim is to integrate them within the system....The ZCTU has 1.8 million members in the informal economy nationwide, and 60% of them are women. Companies are closing down every day with the failure of the economy. Overall economic activity is running 20% below capacity. This is driving many men and women to work in the informal economy to survive. Not to mention all those that have a salaried job they cannot live off and have to supplement with another activity in the informal economy. Public service employees, for example, do not earn enough to make ends meet, so at the same time as holding on to their office jobs, one goes back and forth to South Africa to sell chickens whilst another sells shoes... it's a very common state of affairs."

"I'm shocked, shocked..."

The Lagos State government has banned street selling, but vendors are still out there, The Daily Champion (via allAfrica.com) reports.

"Items on display include vehicle parts, shoes, soft drinks, sachet and bottled water, confectioneries and household items like cutleries and beddings," the paper reports.

"I and my children must eat," one street trader told the paper. "I have to pay their school fees and also pay house rent."

It is truly outrageous that, with all the issues facing Lagos, Governor Babatunde Fashola has chosen to wage war against hawkers and street vendors. These street sellers are not criminals. They are hard working citizens. Just what does the governor think this misguided policy will achieve? How about working with street traders to achieve rational objectives, like lessening traffic jams, while allowing people who need to make a living to keep working.

I will be in Lagos later this week (this will be my 4th trip to Nigeria's commercial capital...it is the place I've been in most over the past two years, aside from my home town of New York) and will blog more about this once I am on the ground.

who's afraid of the informal economy?

An interesting fact, courtesy of The Malaysian Insider: "The type of work available has increasingly been in the informal sector, with menial or temporary jobs on offer. Currently, 70 per cent of Indonesian workers — or 71 million people — work as drivers, food-sellers, labourers and small traders, among others."

If 70 percent of the people work informally, doesn't that make the informal economy the economy of full employment? And if so, why not work with the informal to make these jobs more plentiful and more permanent?

e-waste in India

Goripalya, one scrap market in Bangalore takes in 10 tons of junk PCs and other e-waste every day, India's Economic Times newspaper reports.

"Only 6% of the companies in India have an e-waste policy. The rest are still supplying their electronic waste to the informal sector," the paper reports. "Why should the informal sector convert when none of the companies are interested in giving their waste to formal recyclers?"

the pen-pen is mightier than the sword

"Pen-pen." That's what unlicensed motorcycle taxis are called in Monrovia, Liberia, according to a variety of posts on this interesting blog called The Esteyonage.

Moto – or ‘pen-pen’ - drivers are exclusively young men, often written off as ex-combatants and criminals by society at large. In reality, most of them are super nice, and are driving bikes so that they do not HAVE to be criminals.

Pen-pen drivers spend pretty severe amounts of time on the road. Twelve hours is about average for most riders, but a lot come out and drive before or after a class, teaching, or working another odd job.

The blog has lots more on the cast-off clothing trade, itinerant water sellers, and roadside money changers.

fact and fancy in Nigeria

Two stories from Nigeria, one with spurious charges, the other with some significant thought.

1. The government of Edo state will prosecute street vendors because they are "miscreants who want to deface the city," The Vanguard newspaper reports. This is just more of the usual crazy talk. Street traders are too busy doing business to be defacing the city. They are the good guys.

2. The Daily Trust newspaper reports on the yam cartel in Jalingo, a small city in the Northeast of the country. The cartel apparently exploits women hawkers, giving them just 100 or 150 Naira per day to sell the tubers on the streets of the city. Hassana Audu, one the yam sellers, told the paper, "Everyday, I leave home as early as 7am to hawk yam tubers on the streets of Jalingo. Sometimes I make sales of between N5,000.00 to N7,000.00 per day. But by the end of the day I go home with only N150.00 as my commission." That's an income of little more than $1 a day.

call central casting

The government of Nigeria's Oyo state has demolished the long-standing Bodija Market in Ibadan and plans to replace it with a parking lot, This Day reports. The market had at least 700 stores and a 2006 census listed 15,000 residents.

Why? Blame the usual suspects:

Ademola Omotoso, the chairman of the Ibadan North Local Government Council of Oyo State, told the newspaper that the government "decided to pull down illegal structures in the market to save residents from criminals" adding that people were "carrying out illegal businesses like prostitution, drug peddling and gun running in the area" and taht "the place served as hideout for hardened criminals who found it a safe haven after terrorising neighbouring areas."

And here's a real gem: "It was widely reported that a man called Dogo allegedly slashed the throat of a man in this particular area and took away his intestine for whatever purpose."

hawkers fight back

Ivan D'Souza, who represents the 3500 street hawkers in Mangalore through the Goodangadi and Raste Badi Vyaparigala Okkuta (Petty shop and roadside vendors Federation) notes that there have been so many police actions against street vendors that his organization has "served criminal notices to the Mangalore City Corporation for destroying the sheds and vehicles that belonged to the vendors." Mangalorean has details.

Here's a wonderful stat from the article: according to D'Souza, there are 10 million street vendors in India. That means that one of every 100 people in the country is a street hawker.

He and others in Mangalore have suggested that the Indian constition has provisions allowing informal merchants to have a right to eke out a livelihood. They propose the creation of 'Hawking Zones' where both unorganized and organized shop keepers can do business in peace without trespassing into one another's interests.

informal sector better than the private sector?

Yes, it's true. The New York Times reports that Cairo, where garbage had been collected by informal workers and sorted so pigs could eat the organic waste, is much dirtier and less sanitary now that the government destroyed the informal system and handed contracts to private carters.

The Times reports that the government killed all the pigs in a misguided attempt to prevent swine flu. But the pigs were the key component in digesting (literally) the city's trash.

The government "failed to understand the ethos of the community. People do not take their garbage out. They are accustomed to seeing someone collecting it from the door. For more than half a century, those collectors were the zabaleen, a community of Egyptian Christians who live on the cliffs on the eastern edge of the city. They collected the trash, sold the recyclables and fed the organic waste to their pigs — which they then slaughtered and ate....The pigs used to eat tons of organic waste. Now the pigs are gone and the rotting food piles up on the streets"

both sides of the mouth

Three recent news items from Africa.

1. Hawkers in Ghana are still on the street, just in a much more precarious position, after a government attempt to arrest all street vendors, The Ghanaian Chronicle (via Modern Ghana) reports.

2. The Standard reports that Kenyan street hawkers are now doing business in Botswana since the Nairobi City Council drove them out of the downtown area. At the same time, Capital News reports that the Kenyan government wants to provide health insurance for Kenya's 11 million members of the informal economy.

3. Nigeria, which has seen efforts to criminalize street selling in Lagos, is also talking of providing social protections to informal workers, according to the Business Day newspaper.

Why are these African countries so afraid of street sellers and other informal workers. The Nigerian article points out that 80 percent of the workforce is informal. So why are these governments criminalizing the work done by the majority of their population, while at the same time asserting that they want to provide incentives and social protections? That's called talking out of both sides of your mouth. What will the incentives and insurance be worth if people can no longer work?

immigration vs. informality

Britain's Independent newspaper, which ought to know better, seems to assert that illegal immigrants are the only ones working in the informal economy.

"The informal economy is comprised chiefly of those who came here illegally – often in terrifying circumstances – and those who applied for asylum but didn't get it, and haven't been deported yet. It grew particularly sharply between 1997 and 2002, when an economic boom enticed many people to Britain."

The article suggests that illegal migrants work mainly in construction, cleaning, catering, and hospitality services. Offering no proof, it asserts that "nationalities bind workers: Ghanaians pick litter; Nigerians clean toilets in the City; Romanians and Poles work in plumbing and maintenance."

Then the article goes on to suggest something sensible: an amnesty for illegal migrants to the UK.

Still, it is not only illegal arrivals who are working in the informal economy in the UK. Statistics I've seen suggest that the informal makes up approximately 12 percent of the UK's gross national product. The article suggests that there are about 600,000 illegal residents in the UK, out of a working population (courtesy of the Central Intelligence Agency Factbook) of more than 31 million. That means illegal immigrants comprise about 2 percent of the working population. Either they're all earning high wages picking litter and cleaning toilets, or the Independent needs to re-educate itself about the number of British citizens working in the informal economy.

sales strategy from a street hawker.

"If you can’t yell loudly, you’ll starve," a Beijing street recycler tells The New York Times. "No one really knows what I’m yelling, but they remember my song and this brings them out of their house."

Great marketing advice!

But the government is making life tough for the vendors.

Stringent laws and urban management officials, known as chengguan, keep them on the run with fines and harassment. “The best time to be out is lunchtime, when the chengguan are on break,” said Meng Xiandong, 54, a vendor of dried sweet potatoes, as he nervously scanned the crowds.

lockdown!

Zambian riot police have occupied Lusaka to prevent street vendors from selling goods, The Nation reports.

Almost all streets of the Zambian capital, Lusaka, have a multitude of vendors selling all sorts of goods making it difficult for people to move on the streets or enter shops. The vendors have even covered some lanes on main streets with their commodities. The vendors also sell their goods on the pathways, corridors of shops even entrances to shops. Some shop owners are believed to be giving some of their goods to street vendors to be selling for them outside their shops because buyers opt to purchase goods from the streets instead of shops because the entrances are blocked by vendors.

Just wondering what is so objectionable about street sellers that they have to be met with such force, and treated as if they were violent gangbangers.

night hawks and night hawkers in Karnataka

The Dekkan Herald interviews street vendors who sell "coffee, tea, biscuits, buns, dosa, rice bath, omelette and cigarettes" throughout the night. "Every night, I earn about Rs 2000," one hawker tells the paper. That's $41.50 at today's exchange rate. Not a bad haul.

the travels of a plastic cup in Indonesia

The Jakarta Post offers an excellent chronicle of the recycling supply chain in Indonesia, as a plastic cup, once thrown away, moves through layers of the informal economy into the formal economy.

Moh. Darmadi, a self-employed plastic-waste collector, roams the streets of South Jakarta’s Setiabudi neighborhood equipped with a metal picker and a plastic sack on his back. He sells his takings to a lapak — a term for businesses that buy waste material from trash collectors. The price: Rp 900 for a kilogram of plastic cups and bottles; half that amount for plastic bags.

The lapak, which employs laborers to clean, sort, and prepare the plastic, earns perhaps Rp 10 million a week per truckload of recycled materials.

The purchaser more carefully sorts the plastics, and then runs them through a shredder which chops the raw material into fine pellets. This business sells to formal sector manufacturers, for a weekly turnover of Rp 45 million.

Only about half of the plastic waste produced annually is being recycled. While plastic accounts for 13.9 percent of the waste in Greater Jakarta, only 6.5 percent is recycled, according to a World Bank pilot project on waste identification.

To increase this amount, it is necessary to work with the informal sector.

so this is progress?

Authorities in Kumasi, Ghana have torn down and burnt two thousand informal stalls in the central business district. Police started the action at 4:30 am, so when the business people arrived around 6, their stalls were already ablaze. Daily Guide Ghana reports.

Sticks, stones, and soap phones
At the same time, authorities in Accra have warned that hawkers are the big problem in the capital's Nkrumah Circle. "Walking on that pavement is very difficult, for the reason that these hawkers are overcrowded on the pavements, while they chase and pursue pedestrians to buy their phones. When passers-by try to ignore them, they turn to rain insults on these people calling them all them all sorts of names," Modern Ghana suggests, adding that some "hawkers design toilet soap to look like a mobile phone, cover it with a cell phone covering, and sell it, saying that the battery had run down so it could not be turned on."

This is absurd.

1. Burn down their markets and banish all hawkers simply because they are persistent and successful businesspeople. Whatever happened to due process?

2. I have been in many markets in Africa. In Lagos, Nigeria, many touts outside the market will grab your shirt or your hand and attempt to pull you into their stalls. When you make it clear you don't want to buy, they understand.

3. And ask yourself: would you buy a mobile phone from a guy on the street without opening it up and making sure it works?

The spurious arguments offered in these newspapers are designed to make people fear street markets. But crowds actually increase commerce and heighten public safety. And the street sellers are providing a service. If there were no customers, there would be no street vendors.

the informality of the global economy

Women in Informal Employment: Globalizing and Organizing (WIEGO), along with the Inclusive Cities Project, have issued a study that shows how informal workers--more than half the workers of the world--are impacted by the global economic meltdown.

the formal and informal economies are not entirely distinct. In global value chains, production, distribution and employment can fall at different points on a continuum between pure ‘formal’ relations (i.e. regulated and protected) at one pole and pure ‘informal’ relations (i.e. unregulated and unprotected) at the other, with many intermediate categories in between. Workers and units can also move across the formal-informal continuum and/or operate simultaneously at different points along it. These dynamic linkages of the formal and informal economies highlight the importance of understanding the ‘informality’ of the global economy and recession.

According to the report, decreased demand and crashes in commodity prices have made life vastly more difficult for informal workers: 85 percent of recyclers/waste pickers and 62 percent of street vendors have reported losing business in recent months. Three quarters of all informal workers surveyed said that their profits dropped between January and June 2009.

Rather than the traditional prescriptions of 'formalizing the informal,' the report suggests that workers support a more nuanced approach in which government would, among other things:

--support their work
--offer wage protections
--encourage participation in a social safety net
and
--recognise they are here to stay and stop harassing them

so what if everyone's in the informal economy?

Every man, woman, and child in Pakistan is a tax cheat. That's the conclusion of a World Bank study disclosed by The News, a Pakistani paper. This means that all businesspeople in the country are, in a way, part of the informal economy.

a pension fund for informal workers

More on this great idea, from Ghana Broadcasting Corporation. As the article notes, 9 million workers in Ghana might ultimately buy into the pension fund, which would then provide social protections to those informal workers. And the money collected could be invested in the informal sector, too. Social protection and venture capital investment. A potentially great combination.

china recognizes the power of the informal

This is interesting: India's Economic Times newspaper reports that China and India will collaborate on surveys of each country's informal businesses. The Indian survey will concentrate on Delhi and Surat. The Chinese portion will look at Shanghai and Shenyang, capital of Liaoning Province.

While India has strong organizations that advocate for informal workers, it will be interesting to see how China uses the information the surveys will bring forth. Will the world's largest country crack down on the informal in order to gain tax revenue? Or will it take a more pragmatic (and, dare I say, englightened) approach and work to strengthen the unlicensed businesses?

examples from Africa

Two articles on Africa show the importance of engaging the informal economy.

First, The Daily Trust from Nigeria points out that government policies must be retooled "to encourage our small entrepreneurs who constitute the informal sector with a view to developing and enhancing their businesses." The writer suggests that 5 to 10 million Naira per local government per year (a pittance: $30,000 to $60,000) is all it would take to make the local economies bloom.

Second, the BBC points to the Eastleigh neighborhood of Nairobi, one of the most run down communities in the Kenyan capital -- but, significantly, not one of the poorest.

Marketplaces, and a million little lean-to repair shops and small-scale factories are what most urban Africans rely upon for a living. But such is their distrust of government officials that most businesspeople in the informal sector avoid all contact with the authorities.

Kenyan architect and town planner Mumo Museva took me to the bustling Eastleigh area of Nairobi, where traders have created a booming economy despite the place being almost completely abandoned by the government. Eastleigh is a filthy part of the city where rubbish lies uncollected, the potholes in the roads are the size of swimming pools, and the drains have collapsed. But one indication of the success of the traders, Mr Museva said, was the high per-square-foot rents there. "You'll be surprised to note that Eastleigh is the most expensive real estate in Nairobi."

Though the architect suggests that, if the businesses trusted the government, they might pay some taxes, that's not necessarily the most important determinant of success. If the government would participate in the commercial growth and communal well-being of Eastleigh, businesses would grow, employment and salaries would grow, and new businesses would start up, thus bolstering the economy, improving public safety, and helping the city and the nation.

the informal economy of the world's oldest profession

In These Times documents the ways in which sex workers are organizing for their rights.

The article sensibly notes that sex work (which, beyond simple prostitution, includes jobs such as working as an escort or exotic dancer) "presents critical, and perhaps necessarily uncomfortable, challenges for the labor community," and adds that "sex workers occupy a unique space on the economic landscape, fraught with questions of human rights, social values, and the dividing line between exploitation and labor. Policies governing the industry range from outright bans (the United States) to varying degrees of regulation and legality (across Africa, Asia, Europe and South America)."

Still, the magazine reports, "a union movement is just beginning to crystallize in the sex sector. Sex workers in Argentina, Holland and India have established formal labor associations. The International Union of Sex Workers, founded in 2000 in London, has earned recognition from the Trades Union Congress and been incorporated into Britain's GMB union."

Are there any good reasons why people working in the world's oldest profession shouldn't have all the rights and protections that other workers have?

venice: hawkers face arrest

A food fight between the center-left city government and the right wing, quasi Fascist provincial government has caught street hawkers in Venice in a bind. The local government of the famed city of canals has traditionally been lenient towards street selling. But the state government has now placed 100 soldiers on the city streets to round up hawkers, who mostly sell to tourists. The right-wingers say the hawkers have become more "aggressive, angry and menacing" and are dealing in many counterfeit designer bags. Adnkronos has details.

There has to be a better way than simply criminalizing street hawking.

a violation of the spirit of Fela Kuti

In the Vanguard, Femi Kuti, son of the famed Nigerian afro-beat rocker Fela Kuti, speaks his mind on the Lagos government's shut-down of the great music hall founded by his father, the Afrika Shrine:

“It was opened one week after it was closed. We were given 48 hours to address some issues and after they were served papers. Before the time they were given to address those issues passed, the government swooped in and closed Shrine down.”

According to Femi, the government held his management responsible for the profusion of street traders who sell to music-loving revelers. Femi’s answer: "It is left for them [the government] to clear the street traders and not a job for Afrika Shrine."

The government also said it closed the Shrine for noise pollution violations and creating traffic jams. To this, Femi responded that "Fashola [Babatunde Fashola, governor of Lagos State] should close down all Churches and Mosques. The security men placed there by Fashola should do their job and control traffic effectively.”

Femi was particularly irked that "Fashola banned street parties one week before Felabration," the annual celebration of Fela's birthday. Fela would have turned 70 this year.

combo banking and pensions for informal workers

What a great idea.

AllAfrica offers news of a new plan in Ghana that offers savings and pensions for informal merchants. The plan launched as a pilot in 2005 and now has 40,000 members. Contributors are given a pass book. Half their contributions are held to provide pensions while the remaining 50 per cent can be used as a bank account from which the contributor can make withdrawals.

Officials estimate that 600,000 people in Ghana could join in the coming five years. This hybrid approach, recognizing the need for retirement money and the need to reinvest in businesses might have legs!

informal in Angola

Angola's informal economy--street vendors selling everything from car stereo parts and locally-caught fish to fake perfume and Chinese flip flops--in markets like Roque Santeiro, which was founded in 1986, are now threatened by a ban on street trading. Inter Press Service has details.

Among the interesting facts in the article:

* Angola has a very high rate of entrepreneurship. One in four Angolans were involved in start-ups, significantly higher than other production-driven economies, like India and Colombia.

* an NGO formerly called the Sustainable Livelihoods Project (it's now known as KikiCredito) tried to replicate in Luanda the work that was pioneered by Grameen bank in Bangladesh. The project organized groups of 20 to 30 merchants with democratically-elected officials. In 2004, SLP had nearly 5,000 clients in Luanda and a second city, Huambo, and the project was hailed as a first-rate example of a successful micro-finance initiative.

* Out on Luanda's streets, however, at the bottom rung of the entrepreneurial ladder, life is harder than ever, thanks to the provincial government's new ban on street vendors. Teams of police patrol the crumbling pavements, chasing women from their patches, sometimes seizing their precious goods. The legislation was introduced to "clean up" Luanda and concentrate sellers in designated market areas like Roque Santeiro.

It remains a mystery why governments are determined to stamp out informal entrepreneurship when their countries clearly have so many other social and environmental problems to confront.

Ghana's most irreverent!

Ato Kwamena Dadzie, a journalist who bills himself as "Ghana's most irreverent," has a great take on the effort by Alfred Vanderpuije, Accra's new mayor, to drive hawkers out of center of the city. Money quote:

Let’s face it. The central business district of Accra is a commercial centre. The whole area is one big market and like every market we should expect the area to be a congested beehive of economic activity. Most African markets are like that. We’ve lived with it for decades and it’s hard to see why the mayor wants to change it.

These hawkers are on the streets because they need to survive. Government should be looking for ways to help their small businesses thrive instead of hounding them with batons, destroying their stalls and breaking their wares.

6,000 traders at risk

Destruction of the Warwick Early Morning Market in Durban, South Africa threatens 6,000 traders who together earn 1 billion rand, or about $123 million. Business Day has details.

PS: Sorry for the gap in my blogging. I spent the past few weeks myopically focused on completing a manuscript. Slow suffocation by paper. But I am still breathing and should have more time to post regularly now.

raiding fela 32 years on

The Lagos State government has been busy bashing away at street hawkers and street markets. Now it has closed up the Africa Shrine, the famous music hall run by Femi and Yeni Kuti, children of famed Afro-beat innovator Fela Kuti. The Independent has details.

Fela's original Africa Shrine was shut by the military in 1977, and Fela himself was "dragged from the building by his genitals." Soldiers threw Fela's mother out the window, and she died from her injuries. Now, 32 years later, a democratic regime has closed the rebuilt club.

I know: it's a club. It's noisy and attracts marijuana smokers (Fela was big on that) and stays open till early morning. Still, it is one of the great attractions of Lagos.

People salute Governor Babatunde Fashola for being a man of action, but from the outside (I haven't been back to Lagos in six months), it seems like he's taken Imperial powers to new heights. And he certainly doesn't understand the importance of the informal economy to his city's survival--and the creative possibilities for harnessing it to create a truly African urbanism.

Oh, and due process? I guess Gov. Fashola, who was trained as a lawyer, simply doesn't believe in it.

glasgow kills paddy's market

The Glasgow city council has declared 200-year-old Paddy's Market a "crime-ridden midden" and announced a "new vision", which includes plans to revitalise the area and lease units to artists and "legitimate traders". Current residents have been given notice to vacate the site by tomorrow, reports UTV News.

The market, tucked under railway arches in a lane running between the city centre and the River Clyde, is unique and haphazard. Clothes, books and furniture are strewn along rickety tables and camp-beds. But Michael Burns, a fifth-generation hawker, says this is part of its appeal. "You cannot make this city all shiny and polished and pretend it's something that it's not. We serve a need. Paddy's is a reminder that poverty still exists here. Closing us might take the problem out of sight, but it doesn't solve it."

It's classic: despite the council's talk of renting the site to legitimate traders, the current occupants are legitimate, too. They pay £130,000 a year in rent, plus taxes.

Sounds like the Council thinks gentrified market sellers are more legit than the people who are there now.

more on the soccer war

I missed this when it came out--though I did post on a demonstration about the issue here.

Now it seems that Durban, South Africa not only wants to disrupt hawkers during the World Cup in 2010. It actually wants to turn informal markets into an upscale malls.

Inter Press Service reports on the plan that would uproot the 674 traders at the Warwick Junction Market and transform the space in the Warwick Junction Mall. All this for $2.5 million over 50 years.

In typical fashion, the government would earn almost triple that amount by working with the hawkers.

[thanks, Richard, for sending this my way]

a Magna Carta for Informal Sector Workers

What a great idea. The Business Mirror has the details of this terrific and catchy proposal that's currently being debated in the Philippines.

Key details:

1. Under the Magna Carta, informal-sector workers will be required to pay no less than P50 ($1) but not more than P100 ($2) as a registration fee in exchange for a license to operate and benefits, such as health and accident insurance, and other social protection schemes that will be granted to the informal-sector workers.
and
2. the government could raise from P1.23 billion to P2.46 billion (in US dollars, from $26 million to $52 million) in taxes

According to 2005 stats, the Philippines has 24.6 million people working in the informal economy, while formal-sector workers number just 5.3 million.

'unfair and dangerous street trading'

The North Norfolk News offers the story of one UK locality's attempt to crack down on wily traders. The dangerous and unfair types: "burger vans, and two or three traders in a lay-by instead of one." You know government has become insane when the Chamber of Commerce spokesperson has the most sane response: that the boom in streetside trading is a "sign of the times" born out of people seeking low-cost business start-ups in the recession.

look to the informal

That's what the governments of both Ghana and Uganda are telling people who are looking for jobs: work in the informal sector. The Ghanaian Chronicle and Monitor have the details.

Money quote:
"The 18,000 jobs government creates annually are very minimal compared to the number of jobless people. The President has already directed that we focus our intervention to the informal sector to overcome this problem of unemployment in the country."
-- Uganda's Labour Minister Emmanuel Otaala

There's an unspoken corollary here: that government must work with and assist informal businesses as they seek to grow.

informal, but with retirement benefits

Ghana is planning a new pension system that includes informal traders, who make up 85 percent of the working population, The Mail reports. If anyone has more details on how this will work, please post them here.

'an honest hustle'

In Cleveland, citizens turn to the informal. The Plain Dealer has the story of this totally sensible version of entrepreneurship. It should be encouraged.

Here are the first few grafs.

When Zainab Rahman needed money, she turned her front porch into a take-out restaurant.

As soon as she fired up the deep fryer, lines began forming for catfish and tilapia dinners. Rahman's Polish Boy sandwich specials made her improvised restaurant a required stop on the walk home from school. The jumbo croissants she sold for less than $4 a dozen made her popular among bargain hunters in Cleveland's Glenville neighborhood.

Her entrepreneurial venture offered a glimpse at what experts call the informal economy. It's also known as the shadow, underground or invisible economy, because this form of commerce usually operates outside the mainstream of regulation and taxes.

People engaged in the informal economy call it something else: "survival," "making ends meet" or "an honest hustle."

the informal is normal

The Times of London has more on the Organisation for Economic Cooperation and Development (OECD) report on the informal economy that I mentioned in an earlier post.

Two important new details:

1. While he questions the OECD statistics, Friedrich Schneider, Professor of Economics at the Johannes Kepler University in Linz, Austria, also told The Times that the informal economy is not incompatible with growth. "It is not straightforward to say that reducing the informal sector will reduce poverty. One should also ask: 'How large would poverty be if we had no shadow economy?'."

2. Maeve McGoldrick, of NGO Need Not Greed, told the paper: "People have been forced to work cash-in-hand in the UK because of poverty and the welfare state. What the authorities see as a problem could, in fact, be a solution if they could harness the informal economy by providing support rather than criminalising people."

In fact, the OECD report is not all that negative towards the informal sector. It notes the highly important emerging reality that "informal employement is emerging ...within formal establishments and global commodity chains." And some of its statistics can be read as proving that the growth of the informal has been responsible for the bulk of job growth in the developing world in recent years.

how to beat up a street hawker

The Chinese government's official instruction manual for local police squads (Chengguan--the 'urban management' arm of Chinese local authorities) offers these jewels:

"take care to leave no blood on the face, no wounds on the body, and no people in the vicinity." and "Do not consider whether you are a match for the subject, whether you will harm the subject, or how long it will take for the resistance to subside. You must achieve a state of unawareness and become a resolute law enforcer staunchly protecting the dignity of city administrative regulations."

Guangzhou's Southern Metropolis Daily had the story; danwei has the translation.

More details on the whistleblower who publicized the manual at the EastSouthWestNorth blog.

the soccer war

The South African poet and freedom fighter Dennis Brutus, now 85 years young, has joined a march protesting the destruction and disruption of street markets in Durban as South Africa hosts the football World Cup in 2010. Blogger Sriram Veera offers an appraisal.

Towards the end of his post, he offers this:

Henry Ramlal, the chairman of the Warwick Avenue market committee, a short fierce man, expresses his amazement in strong language. "This is ridiculous. You can beautify the entrance of the city; knock us out, take us down, but what you going to do with the heart of the city? The crime rate is already high and what will you achieve by demolishing our market. What will all these families do? Won’t crime go up?” He says the municipality has offered them a different location for four months. “What after that? What sort of plan is this? Isn’t our site a heritage site? Won’t the tourists come to this spot as a tourist attraction? More importantly, where are the poor people going to buy their stuff? You can’t clean the city of its people."

Dennis Brutus's advice: "You’ve got to keep fighting. Keep fighting."

half the workers of the world

So astounding I just have to quote it:

1.8 billion people, or more than half of the global labour force are working without a formal labour contract and social security. That number is projected to grow to two thirds of the workforce by 2020, assuming stable population trends and growth patterns, and could go higher if more jobs are lost to the economic crisis and more migrants return home to informal sector jobs....

Informal economic activity, excluding the agricultural sector, accounts for three-quarters of jobs in Sub-Saharan Africa, more than two-thirds in South and Southeast Asia, half in Latin America, the Middle East and North Africa, and nearly one-quarter in transition countries. If agriculture is included, the informal share of the economy in each region is even higher (e.g., more than 90% in South Asia).

The share of informal employment tends to increase during economic turmoil. For example, during the Argentine economic crisis (1999-2002), the country’s economy shrank by almost one-fifth, while the share of informal employment expanded from 48% to 52%.

The numbers come from Is Informal Normal, a study by the Organisation for Economic Co-operation and Development, a Paris-based think tank on democracy and the market economy, and are summarized in an article in India's Economic Times newspaper.

The point: half the world is working informally. But, unlike the OECD, I don't blame informal businesses for this. For instance, we should stop heaping scorn on the informal economy for not having employment contracts and not offering social protections. Many so-called formal companies (WalMart, are you listening) don't either.

I anticipate I will blog more on this when I can get a copy of the report.

where the hawkers eat

To avoid bad food from street stands, hawkers in Singapore offer this advice: follow them. Watch which stalls fellow hawkers gorge themselves at, and then eat there, The Electric New Paper (great name!) reports. Seems like a sensible recommendation.

the informal computer

Approximately 6 million computers were sold in Nigeria's informal sector last year, the Lagos newspaper This Day reports. More Nigerians are looking to purchase laptops, to take advantage of wireless set ups available through mobile phone services. In a related development, the mobile phone company MTN increased its share of the Nigerian market to 40 percent. Nigeria's mobile phone companies make the bulk of their money through informal kiosks and hawkers who sell recharge cards and air time.

'the legality and justification of the street vendor economy'

Street vendors play a cat and mouse game with the local security task force in Chongqing, China, The Economic Observer reports. A month after financial crisis set in last October, the number of street vendors in the city tripled, the paper says, creating tension with law enforcement authorities.

And, indeed, there's been a long history of police violence against street merchants. Consider: On August 17th, 2004, a 14-year old girl who was selling flowers at the Three Gorges Square in Chongqing was arrested by street patrols, who then held her by under water and beat her up. And, on July 30, 2008, Liu Jianping, a street vendor who was arrested for blocking a road, was beaten to death by street patrols.

In an interview that runs alongside the article, Chinese political scientist He Bing suggests that the government and the public should admit "the legality and justification of the street vendors":

Generally speaking, the street vendor economy is efficient, and constitutes an important part of the market economy. Besides increasing GDP, the street vendor economy has many other advantages, such as satisfying the needs of low-level consumers and common people, for which cheap street stands are ideal shopping places for daily commodities.

Moreover, street vendors enrich city culture by creating a special street culture that appeals to tourists and citizens seeking to experience local customs. For example, there are street artists in Paris, while in our country, there are temple fairs and night markets, which not only provide shopping convenience but also become a unique part of the city. Street vendors can make the city more fascinating by revitalizing streets and efficiently using public spaces. Just like outdoor bars in Europe, street vendors in Asia also contribute to the diversity of city life, and enliven the communication between the city and the country. Most importantly, the street vendor economy can provide jobs. Facing the limits of money, trade and age, street vendor business has become an employment shortcut with low barriers to entry.

now selling newspapers is a crime

Authorities in Lagos, Nigeria have been harassing and extorting money from local newsstands, the Vanguard newspaper reports. It's part of a misguided campaign by Governor Babatunde Fashola to rid the city of hawkers and street merchants.

police math

Authorities in Aberdeen, Scotland are making noise about an operation to get knock-offs and pirate goods off the streets. According to this article from The Press and Journal, they claim to have seized £40,000 in fakes.

But the math is a bit off.

The article cites "337 pirated DVDs, worth around £3,370." That would be £10 each. And it mentions another 99 DVDs with a street value of £1,485--or £15 per. Yet senior Aberdeen trading standards officer Del Henderson says these DVDs are "just not worth the £3 or so."

Seems like the police are learning from the street sellers and pumping up the value of the goods they've confiscated. Or maybe some of those DVDs are actually real.

a promising development

It's sad that India's Thane Muncipality (just outside Mumbai) wasted more than a million dollars on various schemes to get street hawkers to relocate to indoor malls. But now the municipality is moving towards a much better model, The Times of India reports.

The corporation is now toying with the idea of providing open air markets in plots of land reserved for municipal markets. The proposal does not involve huge expenses ... as no major construction is required in it. There is also a distinct possibility of it succeeding in the long run as the environment of the open air market will he like that of hawking on public places.

That sounds promising.

One potential problem:

The corporation is also considering leasing out the markets to private parties on annual rental basis for fixed period.

Privatization, which could very easily lead to higher rents, could destroy the plan before it starts.

Brilliant!!!

Chennai, India (the former Madras) did something notable in its planning for a new urban development scheme. It consulted with informal workers. Nithya Raman, from the Centre for Development Finance, explains all in an op-ed from Express India:

Workers asked that evictions of slum-dwellers immediately cease, and that funds allocated for the urban poor be used to provide infrastructure, services and tenure in existing slum settlements rather than to construct alternative housing on the outskirts of the city. They asked for the government to prioritise the needs of pedestrians, cyclists, and users of public transport over the needs of automobile and motorcycle owners. They also asked that the government designate spaces for them to work within the city, such as spaces in markets and on roadsides for street-vendors, and to provide them services like drinking water, toilets, and crèches in these work spaces. If such projects are included in the new city development plan, it will already mark a significant departure from the city’s traditional planning priorities.

However, a number of the things that they suggested had absolutely nothing to do with infrastructure or city development as conceived by the JNNURM, and yet, were central to workers’ vision of a better city.Workers asked for access to finance and social security benefits and better quality, better-paid jobs. They wanted medical insurance, well functioning welfare boards, and provisions for retirement benefits. They wanted access to low-interest loans, so that they could avoid usurious moneylenders. They wanted the police to stop harassing them at their workplaces. They also wanted the push towards privatising municipal services to end, because privatisation meant a decrease in the availability of formal sector, decently paid work.

Workers also demanded changes in the government’s urban development policies that would give more power to citizens. They asked that the government provide complete information to city residents about all urban infrastructure projects. They also demanded that projects be approved through a genuinely consultative process, and that the final approvals for urban infrastructure projects should rest with local ward sabhas or gram sabhas. Why was this so central to their demands? Because urban infrastructure projects inevitably require government land, and result in the displacement of poor slum dwellers who squat on that land.

The latest London crime wave...

... "tacky trinket stalls."

The Evening Standard reports on a plan to crack down on "tacky trinket stalls, scruffy-looking pitches and kiss-me-quick tat." The Westminster council wants the power to prevent stall operators from passing pitches on to their children - reversing a centuries-old tradition.

Records show stalls have been in the West End since the 16th century, with Shakespeare referring to "costermongers". Wally Watson, chairman of West End Street Traders, said the stalls in Oxford Street had been there for at least 200 years. The City of Westminister Bill would give new powers for council officers to refuse a street trading licence, and give them greater control over location of stalls. It would also end the right of appeal to Crown Court in cases of disputes.

Street sellers actually helped make Shakespeare famous. His plays had faded from public consciousness a century after his death, and a discounting war, in which dueling publishers pushed his plays to street hawkers for a penny a copy, helped revive his popularity in the 1730s.

Note what a Mark Impleton, a waffle seller who has run his stall for 27 years, told the Standard:

"All the huts we operate from are shabby and rotting but the council will not give us planning permission to update them or change them. Meanwhile they complain that we look shabby. What do they expect us to do? It's a vicious circle."

where selling ice cream is a crime

Singapore, that's where. After complaints from a local merchants association, Singapore is cracking down on ice cream hawkers on Orchard Road, The Straits Times reports.

The National Environment Agency (NEA) has also stepped up warnings against roadside pedlars hawking sundries from tissue paper to cheap wallets, belts, toys and handbags. Their presence turns Singapore's premier shopping belt into a low-class 'pasar malam', or night bazaar, along with the buskers and ear-piercing road shows, the Orchard Road Business Association complained recently.

Tissue paper? Ice cream? Serious crimes, don't you think.

And how's this for a Catch 22: The government says these peddlers don't have licenses to operate on Orchard Road, but the truth is that it's impossible to get a new hawkers' license for that location. The only people who qualify to sell on Orchard Road got their licenses before 1974--and only 35 of those licenses still exist.

the wsj endorses the informal

An excellent article on the power of the informal from, of all places, The Wall Street Journal.

I hope the link remains viable.

Tip o' the hat to: Emeka, Andrew, George & Ringo.

let the informal rule the night

Jaime Lerner, former Mayor of Curitiba, Brazil, which has been hailed as one of the world's greenest and most forward-thinking cities, gives The Hindu a sensible suggestion to improve the urban environment in the evenings: "Allow the informal sector to take over downtown areas after 6 p.m. That will inject life into the city, with a formal-informal equation."

I've been thinking the same thing about Michael Bloomberg's proposal to turn Times Square into a pedestrian area: only if he allows hawkers and other informal merchants to operate on the streets.

scavengers

In China, as in much of the world, the business of recycling is informal. The goods they recycle may come from formal firms, but they wind up being processed by people in the shadow economy. The New York Times reports on the crash in prices that is killing the recycling business in Beijing.

Towards the end of the article there's an anecdote from Bajiacun, which the reporter describes as "a village built on trash on the outskirts of Beijing, where hundreds of people earn a living from--and live among--other people's castoffs."

This puts me in mind of Lagos, Nigeria and the garbage dump in Ojota. And it also makes me think of the informal recyclers of a different era.


My question now: is there a way for the formal and informal to work together here? If, where it is technologically feasible, governments required all paper and plastic and glass to be made from used paper and plastic and glass, would the market pick back up and the informal recyclers again be able to do business?

death of a village?

The Lagos State Government has announced an agreement to move Otigba Computer Village from the valuable and central area of Ikeja to Gatankowa, which on the far outskirts of town near the border with Ogun State. Business Day has details.

This could be a terrible thing for the market, which now is in the somewhat upscale area of Ikeja and is not far from the airport. Check out the statistics the article cites:

While formal market figures for computer sales in Nigeria are put at between 250,000 and 300,000 desktops and laptops yearly, it is estimated that for every computer sold in the formal market, 15 are sold in the informal market here. That would put informal market figures at about 3.7 million. Industry watchers say well over half of the informal market business is done in the Ikeja Computer Village.

Pushing the market out of town, getting rid of the hawkers who surround the market: this could do real damage to that trade. What's wrong with working with the market association to professionalize and improve security right where it is?

not good enough for the Pope?

Pope Benedict is coming to Cameroon. So what does the government there do? As Reuters reports:

Cameroonian security forces have smashed up the street stalls, where thousands of people earn a living, to give the capital Yaounde a face-lift for a visit by Pope Benedict next week....Police beat youths and stallholders at the weekend on Yaounde's Avenue Kennedy, where many hawkers sell cell phones and other electrical items imported from Dubai, witnesses said. "I saw gendarmes and police chasing after fellow Cameroonians, beating them up with such ferocity and smashing their goods," said a Cameroon Telecommunications company worker, who watched from a third storey window as police cleared stalls near Avenue Kennedy on Saturday.

It is, indeed, an ugly world. Not because of what the Pope might have seen, but because of what the government has done to ensure that he would see nothing.

the informal grows while the formal declines

Brazil's informal economy grew 11 percent in January 2009 compared to 2008 levels. At the same time, the formal economy lost 1.6 percent of its regular formal jobs. Since October, the number of informal workers grew by 14.2 percent to 709,000. These are some of the stats from a new Brazilian Institute of Geography and Statistics report. The Latin American Herald Tribune offers brief coverage.

eat on the street

Here's the skinny on where to go in Kuala Lumpur, Malaysia, courtesy of The Star. Some of the food hawkers are businesses that have been in the same family for several generations. I'm hungry just from reading.

the resilience of an informal market

before

during

and after

The Guardian offers a slideshow of the possibilities, destruction due to fire, and quick efforts at rebirth of Owino Market in Kampala, Uganda.

lagos lobotomy

Well at least they are honest about their agenda.

After a demolition in the massive informal market at Oshodi (the photo at the top of this blog illustrates the dynamism and pace of business there), one writer in the Lagos, Nigeria newspaper Business Day reveals the truth:

"Oshodi is also becoming the haven of elites. But Oshodi’s transformation right now is not turning in the direction of living quarters for elites as in the case of Maroko [a longstanding low income community on the Lekki peninsula that was illegally driven out to create more land for the rich] but a major elitist business hub."

To qualify for a stall in the new 'elitist business hub,' a merchant has to pay 1.8 million Naira (approx. $12,000) for a 10 year lease, or, at least a 20 percent down payment plus 30,000 Naira a month (approx. $200) thereafter. Few of the prior merchants can afford that.

I understand cleaning up Oshodi, which can be cramped and dirty and threatening. But simply replacing one group of merchants with the elites, and using publicly sponsored demolitions to do it?

Inexcusable.

the malaysian model

I'm not endorsing every detail of the project, but the Kuala Lumpur government has come up with a plan to work with hawkers and street sellers to create better conditions in the city. The Star has details.

The street vendors seem genuinely pleased. "We have been wanting this for a long time and we we see it as a moral victory," Federal Territories Malay Hawkers & Small Traders Association president Bahrin A. Razak said. "It is no easy task managing hawkers, especially when one has to deal with some 80,000 hawkers – both legal and illegal – and that’s not counting the assistants and cooks." Indian Petty Traders Association Kuala Lumpur and Petaling Jaya president Jothy Appalasamy said the move would bring order to an already chaotic situation in the city. "It is a moral boost for us as shoppers are not the only ones who want to shop in nice and comfortable conditions, but hawkers like to do business in comfortable conditions too," Jothy said.

Rio regression

I missed this when it first ran. The new Rio de Janeiro Mayor, Eduardo Paes, who took office on Jan 1, have vowed a Rudy Giuliani-like 'zero tolerance' approach to crime. So where did he start: by harassing and arresting street vendors. The Miami Herald has details. "I've been selling books here for 40 years," said Rubem da Consigao, 71, a wisp of a man whose small folding table held 100 used volumes in the posh Ipanema neighborhood. "Then last week, the police came, said I didn't have a vendor's license, took my books and said they would burn them. This country is full of thieves - if they take the bread from my hand, there is going to be one more."

As always in history, the elites push blame onto peddlers and hawkers. Yet these folks are only small businesspeople trying to earn and survive. If Paes wants to go after the real criminals, he should start with the corrupt police. And with violent criminals. Street vendors actually help keep the city safe. It's the Oscar Newman defensible space theory: The more eyes and ears (meaning people) on the streets, the safer the streets.

Mumbai open for hawking

Under a new policy, "hawkers will be either given fixed or squatting stalls or permission for mobile hawking," Mumbai chief minister Ashok Chavan told The Times of India.

But dna india thinks that when the new policy is inaugurated "the hawker menace is likely to escalate." The article, of course, never establishes that there actually is a menace.

seeing hawkers as positive

Seems to be true in Malaysia, according to this article from Bernama, the Malaysian National News Agency. Money quote: "Hawkers and petty traders are important because their existence keeps the city lively. From early in the morning to late at night, they work hard to make a living. This is their source of income," says Kuala Lumpur Federal Territories Minister Datuk Zulhasnan Rafique. "It is time for us to care about their welfare and future."

creating a problem...

...where no problem exists. Police in Mombasa, Kenya have fired teargas at hawkers, the Kenya Broadcasting Company reports, as they work to enforce a ban on hawking in the Central Business District.

There's an easy question here: why go after hawkers? They're just trying to make a living, and they're often the most vibrant part of the economy in the developing world.

Why is it that the elites of the developing world hate the street sellers, who are more important to the economic survival of their countries than all the elites put together?

UPDATE, one day later:

Abuja's doing the same thing, according to this article from The Daily Trust, via allafrica.com. Essentially, the city was laid out in the 70s by American planners and Japanese architects working for the Nigerian government. Authorities in what's called the Federal Capital Territory crusade against non-conforming uses every couple of years. Right now it's the hawkers turn to suffer. And the city suffers because each time the government destroys these spontaneous markets, they reduce the excitement and fun and diminish the livability of the city.

killing the informal economy = killing the people

Kano, the leading city in Northern Nigeria, seems committed to wiping out informal businesses. The city brags that it has demolished 3,000 illegal stores and is planning to wipe out 7,000 more by the fall. The UN's exemplary IRIN News has details. Kano authorities say it's "more important to clean up Kano than keep some small business owners employed."

Lagos, too, has been following the same policy, demolishing longstanding markets and criminalizing street hawking.

Nigerian officials seem convinced that the dynamic urban commercial cacophony is an evil. They don't understand that they are destroying the most creative sector of the economy, and missing an opportunity for truly revolutionary urban planning.

(thanks to Mohamed for his eagle eye, and for sending the clip my way)

a solution to e-waste...

...in the informal sector

HP has announced the results of a new study, conducted in partnership with the Global Digital Solidarity Fund and the Swiss Federal Laboratories for Materials Testing and Research (
EMPA.) The conclusion: by working cooperatively with the informal sector, a recycling plant set up in South Africa processed approximately 60 tonnes of electronic equipment, generated an income of around $14,000 from February to November 2008 and created direct employment for 19 people. The project also seeks to incorporate informal processing activities that have proved highly effective in dealing with waste, by transforming them into sustainable and environmentally sound operations.

"Our research has shown that a solution is at hand and demonstrated some of the incredible entrepreneurial skills we can tap into in the informal sector in Africa," said Project Manager and Empa researcher Mathias Schluep. "By providing tools and training we have removed potential environmental and health problems that can be caused by handling e-waste incorrectly. What’s more, we have created a channel to full employment for creative minds in the informal sector."

hawkers wanted

Street hawkers lead to safe roads and a growing economy. That's the conclusion of Dinesh Mohan, a professor at the Indian Institute of Technology in Delhi, according to Sakaal Times.

"Hawkers have to be there on roads," he said at a recent conference on urban transportation. "They are the most enterprising entrepreneurs who are doing business every day by occupying little space, consuming very little energy and generating reasonable revenue. They are contributing to the economic growth. It is because of them that the Indian roads are comparatively safer from mischief doers."

guess who's rebuilding New Orleans...

...workers in the informal economy, that's who.

The New York Times reports on the dangers of being a day-laborer in the city. The laborers, most from Central and South America, are paid in cash, which makes them targets for robbers. Indeed, they are colloquially known as "walking A.T.M.’s," for the quick dollars thieves can take from them.

Here is the dispiriting nut graf: "It is an under-the-radar crime epidemic: unarmed Hispanic workers are regularly mugged, beaten, chased, stabbed or shot, the police and the workers themselves say. The ruined homes they sometimes squat in, doubling- or quadrupling-up at night, are broken into, and they have been made to lie face down while being robbed. They are shot when, not understanding a mugger’s command, they fail to hand over their cash quickly enough, shot while they are working on houses, and shot when they go home for the day. Some have been killed, their bodies flown home to families who had been dependent on their remittances."

they don't want to leave the street

More proof that hawkers do better on the street than in new digs that are constructed for them. Back in 2001, authorities in Mumbai spent 300 million rupees ($6.1 million) to create the Dadar Hawkers Plaza. Eight years on, The Times of India reports, the 750-shop space is almost deserted.

Why? Well try this: "There is no proper entrance to the plaza, no signboard or publicity," one store-owner told the newspaper. Other hawkers said that they resisted moving to the upper floors of the structure.

In retailing, it's location, location, location. And a haphazard presence on the street is a far better location than an official stall far from pedestrian traffic.

the classic misunderstanding

In an article titled, "Work on the black market--losses for the budget," the Romanian News Agency ACTMEDIA reports that the informal economy in the country has grown dramatically:

The share of the unobserved economy in the GDP went up by almost one third over the last four years, increasing from 14.5% in 2004 to over 21% in 2008. Thus, potential income in the economy which were not collected for the budget reached 58.1 billion lei over the first nine months of 2008, with 11.3% of GDP.

The news agency notes that most of the informal is quite mundane: "tailors, auto mechanics, barbers, decorators, plumbers, teachers with private lessons or people who hire their house for the summer."

But the biggest example of lost revenue, accordign to the article, is this: "the share of collection from construction taxes in the GDP, which was kept the same over the last five years, although the sector recorded an annual rate of growth of 17-20%."

Unlicensed and unauthorized construction comes about as a result of lax enforcement and corruption. Instead of blaming the 'black market,' the Romanian government should look to its own failings.

a real economic stimulus

Arjun Sengupta, who heads India's National Commission for Enterprises in the Unorganised Sector, writes in the Economic Times newspaper that India's financial stimulus package should be a 'push' package--with 400 billion rupees ($8.2 billion) invested in the informal sector. "The idea is to introduce a fiscal stimulus programme in the form of public investment and expenditure specifically aimed at the informal economy, on which 880 million people depend, for their livelihood and purchasing power," he writes.

wanted for hawking

These kids are among Lagos's most-wanted criminals, according to the private company that controls the roads in one of the wealthiest areas of Nigeria's biggest city. Here are the details, courtesy of Timbuktu Media's 234next.com.

The idea, according to the article, is this: Lagos is trying to recreate itself as a model city, and therefore the Lekki Concession Company, which is building the arterial expressway on the Lekki Peninsula, the quick-growing rich area of the city, has determined that "street trading, begging, hawking, and dumping of refuse along the completed part of the road, is prohibited."

Of course, this road probably has the richest drivers in the city....which explains why the hawkers might be there: it's where the money is.

And anyway, just what is so bad about hawkers: they're just making a living. Or is it that wealthy Nigerians just want them out of sight, and out of mind?

3 takes on India's future

Three recent articles offer perspectives on the financial downtown and the informal economy in the world's second largest country. The articles all involve ways in which the informal is actually at the heart of the formal economy.

An Oxford Analytica article published by the International Herald Tribune suggests that India's economic boom has been built on a vast and informal labor pool:

Informal sector strain. India's economic boom relied heavily on poorer workers in sectors such as construction, labor-intensive manufacturing (such as textiles, leather goods, gems and jewelery), and labor-intensive service sectors such as cleaning, maintenance and private security. Their services met the requirements of the expanding corporate sector for a cheap and flexible external labor force. However, these workers' options will be severely limited as such jobs are shed.

Another article, also from the IHT notes that "the proportion of India's urban poor halved in the 30 years to 2005 but absolute numbers rose from 60 to 81 million during the period." The article cites a United Nations report as saying that "urban workers are increasingly being pushed into the informal sector."

The report said such exclusion is pushing a large number of urban workers such as street vendors and rickshaw pullers further into poverty. Mass slum clearances have driven workers, such as those in domestic service, away from their place of work and pushed many into crime, the report said. "When the urban poor are pushed away from the place of his/her livelihood, the result is complete loss of livelihood. As a result, many of the poor are pushed into crime."

Finally, in Surfing the Slum, Express India reveals that 92 percent of the workers in the country are employed in the informal sector.

informal economy may cut poverty

A short article in The Daily Star, of Dhaka, Bangladesh, offers this simple, sensible insight: "since the informal economy is playing a vital role in poverty reduction in South Asia, this economy should be nourished."

hawkers, politics, and murder

A grisly story out of Kolkata, India: a dispute over the allocation of stalls at a train station on the northeastern fringes of the city may have claimed the lives of two hawker leaders, Express India reports. The two street sellers, from the Durganagar Station Hawkers Union, were hacked to death Tuesday, and their assailants were affiliated with the Centre of Indian Trade Unions (CITU), police said. Apparently, platforms at the train station had recently been extended to accommodate 12-car trains and the union was negotiating over who would be in line to get the additional stalls. Both the victims and their assailants were members of the CPM -- Communist Party of India-Marxist -- which controls the local government.

But here's a different take on the story: The Telegraph reports that the fight began when the two protested against an illegal liquor bar at the far end of the platform.

And here's an interesting angle, from Kerala Online:

The case brings to fore how railway platforms in all suburban sections of the Sealdah division are up for grabs. Those who want to set up stalls — selling anything from tea to snacks to fruits and vegetables — have to pay to the ruling party. In most places, it is the CITU-backed unions who rule the roost. Every inch of the platform has a price and largely, the CITU controls as to who will be allowed to vend his wares.

omnia vincit donuts

Victory--at least partially. The Swindon Advertiser reports that the donut man can stay in the town center! But he has to give up selling hotdogs, hamburgers, and bacon rolls.

Biagio Mazzotta, the donut vendor in question, had previous declared that he was willing to go to jail rather than give up his right to sell on the street. The newspaper reports that other street traders are also expected to go to appeal the council’s new guidelines banning fast food stalls.

the informal inside the formal

Even in the U.S., informal merchants are part of what keeps the formal economy afloat. Consider the newspaper hawkers of South Florida, who testified recently against a proposed ban on street selling (see The Suncoast News.) By turning to a network of informal roadside hawkers to augment the distribution of their papers, formal Newspaper companies gain circulation (and, by extension, advertising revenue through higher readership numbers.) The newspaper companies do not pay these hawkers and provide them no benefits, other than orange safety vests. Pasco County Commissioners vowed to create an exemption in the proposal to allow street sales of newspapers. But no word on whether the commissioners understand that their proposal will also block people from selling peanuts on the streets, too.