Monday, April 27, 2009

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."

Friday, April 24, 2009

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.

Thursday, April 23, 2009

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.

Wednesday, April 22, 2009

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."

Tuesday, April 14, 2009

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.

Thursday, April 9, 2009

'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.

Tuesday, April 7, 2009

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.