Chapter 10: Conclusion and Recommendations
6.3 CHALLENGES OF STREET TRADING AND THE DILEMMA OF LOCAL AUTHORITIES LOCAL AUTHORITIES
women outside home, the majority of male vendors sell goods prepared by women at home (WIEGO, undated).
Other issues that should be considered when developing the policy for managing street vendors are (WIEGO, undated):
Female street vendors are more likely to operate in an insecure or illegal space.
Women trade in less lucrative goods.
Women generate lower volume of trade.
The majority of women work as employees of other vendors.
Women generally earn less than men.
6.3 CHALLENGES OF STREET TRADING AND THE DILEMMA OF
Street trading has in the past been viewed as an underground economy. To date, some of the European Union countries still refer to the informal economy as the underground economy (Barta, 2009 and ILO, 2002a: 23). Street vending has been seen as a sector that undermines the healthy functioning of the formal economy (Mitullah, 2003: 3). This could be the reason some cities restrict street trading in an endeavour to create “cleaner” cities. In most Latin American countries, street vendors were removed from the inner city to the so called “off-street” commercial centres (Roever, 2006: 34). This is despite the contribution of the sector to urban economies, and the fact that it is a source of livelihood for the poor (Bhowmik, 2005: 2256, Mitullah, 2003: 3 and WIEGO, undated)
Street vendors generally lack legal status, representation and voice. This is a condition that affects most informal workers. This point is stressed by Chen, Vanek
& Carr (2004: 23). According to them, people working in the informal economy suffer from lack of legal protection and economic security (Chen, Vanek & Carr, 2004: 23). Generally, street vendors are faced with the following challenges (Bhowmik, 2003: 3-6, Ghosh, Sengupta & Roychoudhury, 2008: 37-50; Mitullah, 2003 and Mitullah, 2004):
Inability to access secure places to conduct trade.
Harassment from authorities. The harassment occurs in several ways like demands for bribes, having goods confiscated or being evicted from selling places.
Street vendors are often seen as a nuisance to the formal business and traffic, and as such are harshly treated by authorities.
Lack of supporting services and infrastructure such as water, electricity, waste removal, latrines, shelter, storage space and financial services.
Low incomes.
Exposure to diseases as a result of their working conditions.
The majority of street traders are unorganized and isolated.
These challenges manifest themselves clearly as authorities try to strike a balance between creating cleaner, safer, healthier cities and supporting this livelihood. A typical example is clearly captured in an article by Tolsi (2009). This article, which is
about the development of a shopping mall in eThekwini‟s Warwick Triangle, clearly portrays the dilemma faced by local authorities. The eThekwini Municipality wants to develop a shopping mall to replace a 99 year old building used by informal traders.
According to the traders, the development of the mall has the following implications (Tolsi, 2009):
Reduction of the current 1000 informal traders to only 150 that can be accommodated around the mall.
The planned mall will change the pedestrian and consumer patterns in the area, and thereby negatively affecting the traders‟ income.
Informal traders will have to compete with the formal chain stores located in the mall.
According to Skinner (2009: 106), the development of the mall will change the current set-up in that taxi bays would be located on the third floor, and train station concourse would be on the second floor connecting to the bus rapid transport system.
The traders would remain on the ground floor, away from the commuters. Since the traders depend on the commuters, this separation would definitely have a negative impact on them.
In addition, the traders feel that they have not been adequately consulted about the decision. According to Skinner (2009: 106), the approach followed by the municipality (in terms of consultation) is in contrast of the collaborative planning approach that the municipality used in the past. One of the traders provides a painful picture of how authorities perceive traders. The trader maintains that the authorities view traders as being dirty, uneducated and unable to make meaningful decisions on their own (Tolsi, 2009). According to Skinner (cited in Tolsi, 2009), since 2004 the approach of the EThekwini Municipality to informal trading has shifted from a people-centred approach towards a more unilateral one.
This scenario indicates the challenges of managing informal business activities in an urban area. It uncovers the delicate situation that authorities are faced with in balancing the conflicting needs of the various sectors. For example, if there was an estimated R1 billion annual turnover in Warwick Triangle without the mall, and the
new mall would generate R3 billion, how would they decide? The challenge is whether the decision should be based solely on financial benefit, or whether it should take into account the social and economic benefits of the decision on the most vulnerable groups. These are some of the issues that should be taken into account when policies to manage informal businesses are developed. The other conflict is as a result of the fact that street traders focus on their right to trade as well as their contribution to the economy. Local authorities in contrast, are sometimes focussed on enforcing safety and health regulations (Mitullah, 2004: 15 and Roever, 2006: 1). The other challenge facing local authorities is managing and balancing the tension between the formal and informal economies. Mitullah (2004: 21) discusses the case of Uganda, where a municipality was forced to “clean” the CBD of all street traders as a result of concerns raised by formal businesses.
Although it is clear that street vending is important, the economic contribution of this sector is greatly underestimated in national labour force statistics and national accounts (Mitullah, 2003: 30). According to WIEGO, most policy makers have a limited understanding of the size and contribution of street vendors in the economy.
As a result of this, public policies, urban plans and local government bodies are often biased when dealing with street vendors. Mitullah (2003: 10) argues that municipalities suffocate and kill informal sector activities. This bias could to a large extend be attributed to insufficient understanding of the role of street vending in economic development and job creation.