THE POLICY AND LEGISLATIVE FRAMEWORK
6.1 INTRODUCTION
The informal sector of the South African economy cannot be divorced from the history and development of this country. The policy and legislation of each historical or political stage seem to influence the operations of the informal economy. The informal sector has its roots largely in the historical setting of South Africa. The history of South Africa is a history of racial segregation and economic disparities along colour lines.
At the root of racial segregation was the policy of white supremacy under a colonial order and apartheid, the Nationalist Party policy that subjugated the African people. This subjugation was effected through the Native Land Act of
1913 ,\ The Native Act of 1926, the Bantu Trust Act of 1936, the Group Areas Act of 1948 and many other discriminatory laws and provincial ordinances.
Under the racial system, Africans were denied rights enjoyed by the whites. For example, Africans could not purchase clear beer and spirits. This gave rise to bootlegging and the subsequent rise of shebeens.
Through such laws as pass laws, the movement of Africans into and out of European areas was controlled. Only those Africans who were employed and who could prove this by way of a pass were allowed into European and urban areas. Mostly these were men. Women, though not allowed, found their way into the compounds. In time they supplemented their menfolk's income by engaging in trade, albeit illegally so.
Because it was in the interest of the employers that labour's mobility be limited, no measures were taken to develop a public transport system to serve black areas. The lack of adequate and efficient public transport system WOUld, in time.
give rise to the taxi sector which was uniquely to serve black communities.
During this political dispensation, the informal sector experienced a number of restrictions which were often racially motivated. The Group Areas Act impacted directly on municipal by-laws as these local laws had to be within a national legal framework.
The political dimensions facing the country in the 1980's necessitated the state to relax some of the restrictive laws that hindered the development of the informal sector. The Business Act of 1971 which shall be discussed later in this chapter further strengthened the position of the informal sector.
In 1994 South Africa became a democracy with a new government and new vision. The commitment of the new government to uplifting all sectors of the
populace, the informal sector included, can be demonstrated by some decisions taken and already under implementation. Indeed, South Africa as a demoqracy and a country in transition can be said to be on the right track in so far as
creating an enabling environment that would assist small businesses to operate.
This is proven by the commitment of the government in economically
empowering the historically disadvantaged South Africans through its policies as demonstrated by the facts below.
T elkom South Africa is a parastatal whose shares are wholly owned by the national government. A decision has been taken to privatise Telkom. In this regard government has announced its intention to sell shares to the histOrically disadvantaged at a discount. Within the context of informal trading it is worthy of note that informal associations such as stokvels have been accorded certain advantages. They can as an association buy certain shares up to RSO 000 at a discount. (Telkom Annual report, 2002)
Government has also released a mining charter by which it sought to gradually allow the previously disadvantaged to acquire interests in the mining sector.
National legislation, it is envisaged, will seek to transfer certain rights in the ownership of mines to, among other things, previously informal associations, although it is hoped that they will form part of the mainstream economy.
The national and provincial governments have also adopted tender practices which deliberately target the historically disadvantaged and the informal sector in particular.
The thrust of the government has been to get the informal sector to better organise itself and run just as the formal sector. However, it should be borne in mind that government policy does not always translate to implementation and desired outcomes. In this regard mention must be made of the developments in the taxi industry.
At the time of writing this dissertation, the national Minister of Transport and the South African Taxi Association are finalising implementation plans meant to transform the taxi industry and put it on a sound footing better equipped to compete with formal transport operators.
An amount in excess of R 14 billion has been earmarked for the rationalisation of the taxi industry. Implicit in the rationalisation exercise is the fact that taxi operators will have to be registered. On Monday the 25th November 2002, the taxi operators and owners went on strike in defiance of the KwaZulu-Natal Department of Transport's Operation Shanela which was meant to remove all unregistered road unworthy taxis on the road. As a result of this strike millions of rands were lost as many people in this province did not report to work. (Daily
N~ws, 25 & 26 November 2002)
Political empowerment of the majority through democratic processes underway in the country must be accompanied by economic
empowerment in order to achieve the national goal of sustainable social and economic development. The creation of meaningful jobs, wealth and a decent standard of living for the population will give meaning to their vote. Thus, political power can not bring stability and growth without addressing the issue of historical disparities within the economic power.
Besides referring to those who were\ disadvantaged by the apartheid system in the past, the term 'disadvantaged' also applies to those South Africans who have been historically disadvantaged through discrimination on the grounds of gender and/or disability. (www.polity.org.zalwhite- papers/tele4.htlm ,1-3)
The relevance of the above extract from the policy document is indicative of the government's intentions and the context of legislation in this country. More so from the above extract we can see that there is a recognition that whilst black people were the ones that were discriminated against, it is equally important to address the plight of those discriminated against on the basis of gender and disability. The informal sector reflects this reality. It is predominantly black, but most street traders are women. It is also important to note that disabled people are employed mainly in the informal sector rather than in the formal economy.