tag:theconversation.com,2011:/us/topics/informal-economy-29758/articles
Informal economy – The Conversation
2024-03-24T08:50:02Z
tag:theconversation.com,2011:article/225582
2024-03-24T08:50:02Z
2024-03-24T08:50:02Z
Why do identical informal businesses set up side by side? It’s a survival tactic – Kenya study
<p>The population on the African continent will have <a href="https://www.un.org/en/global-issues/population">nearly doubled</a> by 2050, according to UN projections. About <a href="https://www.mckinsey.com/mgi/our-research/reimagining-economic-growth-in-africa-turning-diversity-into-opportunity">800 million</a> more young Africans will enter the job market by then. Combine this forecast with the <a href="https://ilostat.ilo.org/african-youth-face-pressing-challenges-in-the-transition-from-school-to-work/#:%7E:text=True%2C%20nearly%2013%20million%20young,for%20and%2For%20obtaining%20jobs.">high youth unemployment rate</a> in many African countries today, then the pressing question is: who will create stable jobs at mass scale?</p>
<p>Many policies to create new employment at scale focus on solution templates that have worked elsewhere, often outside Africa. These include enabling entrepreneurship to create high-growth start-up ventures, bringing in technological advances to potentially unlock new industries, or the establishment of outsourcing hubs for low-cost labour.</p>
<p>Few policies directly support homegrown solutions that already have a track record of creating large-scale stable employment.</p>
<p>Together with my coauthors, I looked for answers in a seemingly unlikely place. <a href="https://pubsonline.informs.org/doi/10.1287/orsc.2023.17644">We studied</a> how car repair businesses were organised. Specifically, we studied the neighbourhood of Dagoretti Corner in Nairobi, Kenya. </p>
<p>Here, 105 largely identical car repair businesses set up shop close to one another. Imagine corrugated iron sheets as fences to demarcate businesses which offer exactly the same service in the same location. </p>
<p>This phenomenon <a href="https://www.africanbookscollective.com/books/african-markets-and-the-2028utu-buntu-business-model">is common</a> in major African cities. Thousands of different traders – from fruit sellers to furniture makers – set up next door to each other and co-locate. This doesn’t make sense as a competitive strategy, so why do it?</p>
<p>We found that these businesses do this in part because it generates an informal welfare system. In our study, the car repair businesses mutually supported each other in a variety of ways to ensure they survived and thrived. </p>
<p>Our findings make a case that policymakers should focus on supporting these informal welfare systems. They abound in urban areas and create employment at scale. Yet, policies tend to support individuals, as opposed to groups, in informal economies. This could risk eroding these welfare systems, putting livelihoods at risk.</p>
<h2>Informal welfare system</h2>
<p>Over the past two decades, car repair businesses in Dagoretti Corner grew from 11 to 105 identical businesses. As the satellite images in the video below show (car repair businesses shaded in yellow), they have massively expanded and are now fully integrated into the urban infrastructure. </p>
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<p>The agglomeration of businesses in this way is often seen as a sign of failed economic and urban development policy by industry analysts, development practitioners and policy makers. They tend to believe that agglomerated businesses should reach higher levels of efficiency, competitiveness, specialisation and innovation. </p>
<p>Yet, many businesses continue to operate the same way they did a decade ago with little change or upgrading. What benefit are these businesses reaping?</p>
<p>Through our fieldwork in Dagoretti Corner, visiting car repair businesses and conducting interviews with 45 owners, we identified five ways in which business owners create their own welfare system: </p>
<p>First, they save and invest money together. This is often done in small scale, informal rotating savings and investment associations. In Kenya these are known as chamas and Savings and Credit Cooperative Organisations (Saccos) and are akin to credit unions and cooperatives. Saving money together enables owners to get a loan and enables business owners to make investments together. Rather than being competitors, businesses are interdependent and trust each other to grow together.</p>
<p>Second, businesses offer apprenticeship opportunities, enabling the youth from rural Kenya to get trained and equipping them with the knowledge and resources to start their own car repair businesses. Through apprenticeships, mechanics become familiar with the welfare system and continue its upkeep into the future.</p>
<p>Third, trust is fragile and business owners come up with ways to self-police against free riding and theft. They address competitive behaviour through self-organised committees. Poaching customers from a peer business is seen as theft and is policed. Repeated shoddy repair work and alcohol abuse among mechanics is also policed. Particularly exploitative customers are blacklisted. After all, the owners want to make sure that customers perceive Dagoretti Corner as a safe place for customers to entrust their valuable cars.</p>
<p>Fourth, businesses support each other in times of crisis when nearing bankruptcy to ensure survival. Chamas and Saccos make emergency money available to smooth over gaps. Businesses temporarily loan out their employees to other businesses to ease the financial burden of paying a wage. And businesses sub-contract repair work to distressed businesses, ensuring at least some cash flow until business picks up again.</p>
<p>Fifth, in times of personal crises when livelihoods are at stake, due to high medical bills or funeral costs, peer businesses step in and provide a type of insurance policy. Owners, employees and apprentices collectively contribute funds to support those in dire need and prevent them from slipping into destitution. This informal insurance scheme even extends to family members.</p>
<p>This informal social welfare system is critical because it provides stable employment, saving and investment opportunities and insurance at considerable scale. </p>
<p>Policies that support the growth of individual entrepreneurs in these areas – such as through training and cash infusions geared towards business differentiation – are likely to introduce competitive behaviours among identical businesses. This risks the collapse of welfare systems and thus also employment at scale.</p>
<h2>Policies must strengthen informal welfare systems</h2>
<p>We concluded from our research that policies need to further enable, strengthen and then leverage the existing welfare systems of co-locating businesses to engender firm and employment growth. These are strongholds of cooperative behaviour that need to be protected rather than transformed or displaced. </p>
<p>One way this can be done is through the creation of transparent cooperative structures and exit pathways for individual businesses to grow. This would strengthen the welfare system and needs to be the starting point of policy discussions. </p>
<p>For example, targeted governance interventions could make chamas and Saccos more robust to safeguard them against fraud and enhance their self-organising capacity. Digital technologies can play a role here to bring these saving and investment schemes into the modern age. Once made robust, cash infusions by the government to support firms in the informal economy can then happen through these rather than through separate, government-run entities. </p>
<p>We do not rule out the potential for policy interventions seeking to support individual firms. Yet, these need to be context-sensitive so that they can enable businesses to scale without eroding the social order. </p>
<p>This is just a starting point. In light of the pressing challenge to bring about labour-intensive growth in African societies, it is paramount to not only focus on importing solutions from elsewhere but to be intentional about enabling and supporting homegrown solutions that already work.</p><img src="https://counter.theconversation.com/content/225582/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tim Weiss does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Identical informal businesses set up next to each other because they’ve created an informal welfare system.
Tim Weiss, Assistant Professor, Department of Management and Entrepreneurship, Imperial College London
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/211711
2024-02-27T16:31:20Z
2024-02-27T16:31:20Z
Delhi’s electronic bazaars are one of the city’s last non-elite commercial spaces
<figure><img src="https://images.theconversation.com/files/577571/original/file-20240223-16-muuey8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Delhi's bazaars offer an alternative infrastructure and economy.</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/richardsennett/45279912064">Richard Sennett|flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span></figcaption></figure><p>Public life in India, and South Asia more broadly, centres around the working-class camaraderie of an <em>adda</em> or gathering: people sitting and chatting often under a tree or at a tea stall. </p>
<p>In Delhi, the wealthy upper-middle classes have long flocked to new malls and supermarkets. The urban working classes, however, still favour the city’s bazaars, for the space they allow for both adda and for making a living.</p>
<p>The virtual economy, with its digital platforms, cashless payment systems and online shopping, has of course seen street-level economies, across the globe, decline. However, as I show in my book, <a href="https://www.sup.org/books/title/?id=31924">Traders and Tinkers</a>, bazaars remain dynamic public squares that have long fostered new forms of popular culture. </p>
<p>From the pirate CD industry to fashion knock-offs and DIY electronic goods, bazaars have nurtured a significant informal economy. These marketplaces affirm the existence of people – daily wage earners, pullers and loaders, small-scale tradesmen and street vendors – who live and work on the margins of society. </p>
<figure class="align-center ">
<img alt="A market street with signs and lights at night." src="https://images.theconversation.com/files/577564/original/file-20240223-24-efzw2o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/577564/original/file-20240223-24-efzw2o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/577564/original/file-20240223-24-efzw2o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/577564/original/file-20240223-24-efzw2o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/577564/original/file-20240223-24-efzw2o.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/577564/original/file-20240223-24-efzw2o.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/577564/original/file-20240223-24-efzw2o.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Kotla Mubarakpur market.</span>
<span class="attribution"><a class="source" href="https://unsplash.com/photos/a-busy-street-with-many-signs-UQyZ8h0L3H0">Ravi Sharma|Unsplash</a></span>
</figcaption>
</figure>
<h2>How Dehli’s electronic bazaars emerged</h2>
<p>Since 2012, I have conducted ethnographic research in three of Delhi’s marketplaces: Lajpat Rai market, Palika bazaar and Nehru Place. I have interviewed traders and vendors. I have taken part in addas. I have observed sales in shops and on the street.</p>
<p>In 1957, the Delhi Development Authority was established as part of the Ministry of State Housing and Urban Affairs. This statutory body devised what was known as the “master plan” of 1962 – an ambitious, modernist urban zoning project which divided the city into residential, commercial, work and industrial complexes.</p>
<p>Implementing the plan became difficult as the initial enthusiasm for building functional spaces faded. There was a fundamental difference between how ordinary people used these spaces and what planners had in mind. </p>
<figure class="align-center ">
<img alt="A covered passageway in a market with red columns." src="https://images.theconversation.com/files/577568/original/file-20240223-18-5xtkj2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/577568/original/file-20240223-18-5xtkj2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/577568/original/file-20240223-18-5xtkj2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/577568/original/file-20240223-18-5xtkj2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/577568/original/file-20240223-18-5xtkj2.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/577568/original/file-20240223-18-5xtkj2.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/577568/original/file-20240223-18-5xtkj2.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Lajpat Rai market.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/varunshiv/4143461854/in/photostream/">Varun Shiv Kapur|Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Instead of the ideal consumer spaces of orderly shops and civic transactions, ordinary people traded in the nooks and crannies of informal marketplaces. Bazaars emerged as unruly, chaotic spaces. There you could haggle for better prices. Anyone – slum dwellers, new migrants, unemployed youths – could find a way to survive. </p>
<p>This highly competitive, face-to-face economic exchange sits midway between the opaque world of high finance and the routines of <a href="https://www.ucpress.edu/book/9780520081147/civilization-and-capitalism-15th-18th-century-vol-i">everyday life</a>.</p>
<p>In the 1970s, Delhi’s electronic bazaars were where most people went to buy radio and electrical equipment. In the 1980s, vendors shifted to TV sets, VCRs and gaming consoles, as so-called suitcase entrepreneurs smuggled media products into the country and made them available to the broader public, despite official restrictions on imported products remaining in place. </p>
<p>After trade was deregulated in 1992, foreign products became more widely available and bazaars lost their monopoly. However, piracy – in computers, consoles, games and software – emerged as a lucrative way to attract those consumers who could not afford to buy originals. </p>
<p>A market for DIY assembled computers emerged in Nehru Place, to the south of New Delhi. People started selling unlocked gaming consoles so that you could play the latest games on older models. Vendors stocked pirated movies, software and games on cheap CDs and DVDs that cost half the price of new products. </p>
<figure class="align-center ">
<img alt="People in an indoor market." src="https://images.theconversation.com/files/577569/original/file-20240223-30-trso72.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/577569/original/file-20240223-30-trso72.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=337&fit=crop&dpr=1 600w, https://images.theconversation.com/files/577569/original/file-20240223-30-trso72.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=337&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/577569/original/file-20240223-30-trso72.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=337&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/577569/original/file-20240223-30-trso72.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=423&fit=crop&dpr=1 754w, https://images.theconversation.com/files/577569/original/file-20240223-30-trso72.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=423&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/577569/original/file-20240223-30-trso72.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=423&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Palika bazaar.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/foca/5817889039/in/photolist-9S7cHH-zJ9zPE-2oJjbbS-6rBizK-sCNfL-9S7d3v-oaWm2H-9S7cTa-6Bvyke-Mt7Zi-xYcUF-jHSXMq-HADJtb-bkSoNV-FKsJWG-i2a6U-awRhR-5rDjk-HXGfa-4Hvcoa-7bXFoz-aJj3C6-JACfK-676Sdy-a5n4oF-2gpgqwe-2gpgqyt-Mt7H4-zJ888Y-zJe73P-7DqXRz-7DqXRD-5yTsut-c5hc2N-7DqXRg-z4RvdT-2gpgPmD-2giLaP-2gpgPoC-cz2sid-aejj5F-zZAhXW-9BXa-8ne2Qj-6oHhYd-Q6NDF-6NDk4k-zYrgaA-2gpgqpR-6dq2jU">Nicolas Sanguinetti|Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<h2>When bazaar economies are disrupted</h2>
<p>The bazaar facilitates what author Ravi Sundaram terms a “<a href="https://www.routledge.com/Pirate-Modernity-Delhis-Media-Urbanism/Sundaram/p/book/9780415611749">pirate modernity</a>”. These everyday practices of recycling, remixing and copying media products in postcolonial India comprise both benign private consumption trends and more insidious forms of media circulation. Sundaram cites the example of far-right Hindu actors taping vitriolic messages on cassette tapes for broader circulation. </p>
<p>The German artist and author Hito Steyerl talks about “swarm circulation” to describe this kind of unofficial, underground copying. In facilitating this type of pirate economy – that relies on unsteady internet connections and DIY desktop computers bazaars – bazaars represent an alternative infrastructure. This is evident in both the way they spread out and the aesthetic they cultivate. </p>
<p>New business ventures can crop by the side of an existing shop, against a pillar, out on the pavement, down an alleyway. In Lajpat Rai market, I witnessed a young vendor at a desk by the roadside operating an on-the-spot repair station. He used scavenged parts from abandoned machines to fix a customer’s PlayStation 3 console. </p>
<figure class="align-center ">
<img alt="A market street seen from above." src="https://images.theconversation.com/files/577575/original/file-20240223-26-xz4dqv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/577575/original/file-20240223-26-xz4dqv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/577575/original/file-20240223-26-xz4dqv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/577575/original/file-20240223-26-xz4dqv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/577575/original/file-20240223-26-xz4dqv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/577575/original/file-20240223-26-xz4dqv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/577575/original/file-20240223-26-xz4dqv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Nehru Place.</span>
<span class="attribution"><a class="source" href="https://www.flickr.com/photos/acmpix/11958112873">Alan Morgan|Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
</figcaption>
</figure>
<p>This offers a crucial counterbalance for working-class people in Delhi. Street vendors <a href="https://www.compas.ox.ac.uk/article/mobility-prohibitions-and-shantytown-workers-in-delhi">largely live</a> in the city’s shantytowns or slums where space is at a premium and the threat of demolition is constant. </p>
<p>Further, the very broad range of customers bazaars host nurtures a unique aesthetic. Clothing on sale might feature heaps of accessories, from zippers to rivets. One knock-off garment might boast multiple brand logos. On display counters, you might find 1980s TV games and cassettes alongside the latest gaming consoles. </p>
<p>Dehli’s bazaars do not align with any top-down approach to urbanism that prioritises order and cleanliness over makeshift economies. And precisely because of this, since the 1990s, the government has increasingly cracked down on them. </p>
<p>Sociologist Amita Baviskar uses the term “<a href="https://anthropology.washington.edu/sites/anthropology/files/documents/research/house_uncivilcity_0.pdf">bourgeois environmentalism</a>” to describe these official clean-up operations in Delhi. She underlines that this contemporary characterisation of squatters and street vendors as a “nuisance” reproduces colonial ideas of hygiene and order. British colonisers too initiated clean-up operations in working-class neighbourhoods, citing overcrowding and poor ventilation. </p>
<p>Today, street vendors in Delhi also have to <a href="https://www.aljazeera.com/features/2016/1/5/indias-street-vendors-fearful-for-the-future">contend</a> not only with raids but how gentrification is changing local neighbourhoods. Their livelihoods are also under threat from the competition online shopping and e-commerce platforms have posed since the 2010s.</p>
<p>So far, though, people have found ways to adapt. Some are moving away from street-level to occupy similarly informal e-commerce platforms and social media marketplaces.</p>
<p>Delhi’s electronic bazaar are like sponges. They absorb different types of labour and product. They foster processes of dismantling and reassembling. As dynamic public spaces, they are invaluable.</p><img src="https://counter.theconversation.com/content/211711/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Maitrayee Deka does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Contemporary characterisations of squatters and street vendors as a “nuisance” reproduces colonial urbanism ideas of hygiene and order.
Maitrayee Deka, Senior Lecturer of Sociology, University of Essex
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/220181
2024-01-05T13:46:13Z
2024-01-05T13:46:13Z
The US invented shopping malls, but China is writing their next chapter
<figure><img src="https://images.theconversation.com/files/567756/original/file-20240103-29-8zgelg.jpg?ixlib=rb-1.1.0&rect=32%2C0%2C5449%2C3641&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">People walk under a light projection at a shopping mall in Beijing. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/people-walk-under-a-light-projection-at-a-shopping-mall-in-news-photo/1782952230">(Photo by Jade Gao / AFPJade Gao/AFP via Getty Images)</a></span></figcaption></figure><p>On a recent research trip to China, I wandered through the Oasis Mall in suburban Shanghai. Like many Chinese shopping centers, this complex was filled with empty stores that reflected the <a href="https://www.bloomberg.com/news/features/2020-02-07/ghost-malls-in-china-s-once-teeming-megacities?embedded-checkout=true">end of China’s 30-year-long economic expansion</a>. But there also were surprises. </p>
<p>Along a stretch of the mall’s interior walkway, a cluster of parents and grandparents sat on chairs. They were looking through a plate glass window, watching a dozen 5- to 7-year-old girls practice ballet steps, carefully following their teacher’s choreography. A space initially designed for retail had been turned into a dance studio.</p>
<p>From 1990 through 2020, <a href="https://www.taylorfrancis.com/books/mono/10.4324/9781315609065/shopping-malls-public-space-modern-china-nicholas-jewell">large, shiny shopping malls</a> embodied China’s spectacular economic growth. They sprouted in cities large and small to meet consumer demand from an emerging middle class that was keen to express its newfound affluence. These centers look familiar to American eyes, which isn’t surprising: U.S. architectural firms <a href="https://doi.org/10.1080/13467581.2023.2182639">built 170 malls in China during this period</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/567757/original/file-20240103-15-n9ojl6.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A curved modern building labeled Oasis, with towers in the background." src="https://images.theconversation.com/files/567757/original/file-20240103-15-n9ojl6.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/567757/original/file-20240103-15-n9ojl6.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=232&fit=crop&dpr=1 600w, https://images.theconversation.com/files/567757/original/file-20240103-15-n9ojl6.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=232&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/567757/original/file-20240103-15-n9ojl6.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=232&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/567757/original/file-20240103-15-n9ojl6.JPG?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=291&fit=crop&dpr=1 754w, https://images.theconversation.com/files/567757/original/file-20240103-15-n9ojl6.JPG?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=291&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/567757/original/file-20240103-15-n9ojl6.JPG?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=291&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Oasis (blue building) is one of some 6,700 shopping malls in Chinese cities. Hundreds of new centers open yearly.</span>
<span class="attribution"><span class="source">John Rennie Short</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>Like their <a href="https://www.businessinsider.com/shopping-mall-rise-fall-timeline-1950s-to-today-2023-1">U.S. counterparts</a>, many Chinese malls have fallen on hard times. The COVID-19 pandemic and the rise of online shopping have devastated foot traffic, leaving the nation with a huge overhang of retail space. But many Chinese malls are being re-imagined by owners and users as palaces of experience – civic areas for communities to meet and interact, with new configurations of public and private space. </p>
<p>As a <a href="https://scholar.google.com/citations?user=oMPNYhQAAAAJ&hl=en">longtime urban policy scholar</a>, I was fascinated by the new uses I saw for malls in China. In my view, these experiments could become models for new, creative uses of retail space in the U.S., where the mall was invented. </p>
<h2>Serving a new consumer class</h2>
<p>China <a href="https://www.brookings.edu/books/how-china-opened-its-door/">opened up to foreign trade and investment</a> less than 50 years ago. Since then, it has become the <a href="https://www.forbesindia.com/article/explainers/top-10-largest-economies-in-the-world/86159/1">world’s second-largest economy</a>, surpassed only by the U.S. </p>
<p>Rising incomes and a massive population shift from rural areas to cities have created a <a href="https://www.goldmansachs.com/intelligence/macroeconomic-insights/growth-of-china/chinese-consumer/">growing middle class</a> with significant purchasing power. GDP per capita increased <a href="https://finance.yahoo.com/news/china-squandered-golden-opportunity-overtake-110000713.html">from US$293 in 1985 to $12,500 by 2021</a>. </p>
<p>Today, approximately 350 million Chinese – 25% of the total population – <a href="https://onlinelibrary.wiley.com/doi/epdf/10.1111/cwe.12400">can be considered middle class</a>. More recent economic growth has generated growing income inequality that now is <a href="https://sccei.fsi.stanford.edu/china-briefs/rise-wealth-private-property-and-income-inequality-china">equivalent to U.S. levels</a>.</p>
<p>Malls became a motif of modernity during the country’s economic expansion. They offered consumers year-round protection from heat, humidity, cold and frost, as well as from busy streets and polluting traffic. Malls were safe environments where the steadily increasing numbers of more affluent Chinese families could shop and eat, stroll and meet.</p>
<p>Over the past 30 years, China’s malls have <a href="https://discovery.ucl.ac.uk/id/eprint/10154812/">faced economic booms and slumps</a>. For example, the <a href="https://www.atlasobscura.com/places/new-south-china-mall">New South China Mall</a> in Dongguan – which is twice the size of Minnesota’s Mall of America, its largest U.S. counterpart – opened in 2005. But most of its 2,300 storefronts remained closed for over a decade as China <a href="https://www.imf.org/external/pubs/ft/fandd/2010/06/yueh.htm">fought off recession</a> after the 2008 world financial crisis. </p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/5zPkm2SU1DM?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">This 2013 news report takes viewers inside the then-deserted New South China Mall in Dongguan.</span></figcaption>
</figure>
<p>China weathered that downturn through <a href="https://insight.kellogg.northwestern.edu/article/china-credit-expansion-unintended-consequences">aggressive economic stimulus policies</a>, and within a decade it replaced the U.S. as the <a href="https://www.reuters.com/article/idUSKBN1XF218/">world’s top driver of economic growth</a>. This expansion buoyed its retail sector, including <a href="https://www.chinadaily.com.cn/a/201901/11/WS5c380388a3106c65c34e3e65.html">shopping centers</a>. By 2018, a renovated and modernized New South China Mall was <a href="https://theculturetrip.com/asia/china/articles/worlds-biggest-shopping-mall-china-no-longer-ghost-mall">near full occupancy</a>. </p>
<p>Then COVID-19 struck in 2020. The Chinese government adopted a rigid <a href="https://www.voanews.com/a/what-is-china-s-zero-covid-policy-/6854291.html">zero-COVID policy</a>, in which local governments could impose lockdowns after detecting just a few cases. Hundreds of millions of people were restricted to their homes for weeks or months at a stretch. </p>
<p>This policy was lifted only <a href="https://publichealth.jhu.edu/2023/no-more-lockdowns-chinas-new-covid-landscape">in late 2022</a>. China’s economy has yet to fully recover, and many experts argue that it <a href="https://www.wsj.com/world/china/china-economy-debt-slowdown-recession-622a3be4">will never again reach its previous rates of growth</a>. An <a href="https://asia.nikkei.com/Spotlight/The-Big-Story/China-s-aging-population-threatens-a-Japan-style-lost-decade">aging population</a>, <a href="https://www.reuters.com/article/idUSKBN1ZF2YQ/">trade wars with the U.S.</a> and a government focused on centralizing power under the Communist Party are all acting as drags on the economy, and online shopping is drawing consumers away from stores. </p>
<p>As a result, Chinese media reports abound with stories about <a href="https://new.qq.com/rain/a/20230720A06YQI00">well-known stores</a> and <a href="https://www.jiemian.com/article/9356769.html">venerable malls</a> closing. In China, as in the U.S., what scholars once described as the “<a href="https://doi.org/10.1111/j.1467-8306.1993.tb01921.x">magic of the mall</a>” has become an “<a href="https://www.discoursemagazine.com/p/the-allure-of-ruins">allure of ruins</a>.” </p>
<h2>Malls with Chinese characteristics</h2>
<p>But the Chinese are making creative use of excess mall space. New users are filling nonretail areas, such as indoor walkways and atriums that now house café tables. Others have become children’s play spaces filled with giant inflatable figures. The <a href="https://www.capitaland.com/en/find-a-property/global-property-listing/retail/raffles-city-shenzhen.html">Raffles City Mall</a> in Shenzen has a rooftop pet playground, a stage, an art display area and a sun-shaded lawn. </p>
<p>China’s informal economy of food stalls and sidewalk merchants is also filling the void. Although street vending has a long history in China, government officials sought to suppress it in recent years, calling it <a href="https://epaper.chinadaily.com.cn/a/202009/18/WS5f63fbf0a31099a2343506f3.html">unsanitary and a throwback to pre-modern times</a>. Now, however, they are encouraging it as a way to reduce growing unemployment, especially among young people, which <a href="https://theconversation.com/chinas-youth-unemployment-problem-has-become-a-crisis-we-can-no-longer-ignore-213751">currently exceeds 20%</a>. </p>
<p>During my trip, I saw small-scale entrepreneurs selling produce, street food and crafts in mall parking lots and around public entrances. The <a href="https://www.routledge.com/Pseudo-Public-Spaces-in-Chinese-Shopping-Malls-Rise-Publicness-and-Consequences/Wang/p/book/9781032177991">distinction between public and private spaces</a> is being reconfigured as vendors set up stalls in areas that once were open space. </p>
<p>Empty store spaces are also being repurposed. Some have been converted into <a href="https://www.bloomberg.com/news/articles/2021-03-08/luxury-malls-are-the-new-car-showrooms-for-chinese-ev-makers?sref=Hjm5biAW">electric vehicle showrooms</a>, <a href="https://doi.org/10.1080/14702029.2022.2061750">art museums</a> and <a href="https://doi.org/10.1080/14733285.2022.2050675">children’s play centers</a> with dance studios, paddling pools, small skating rinks, gyms and yoga centers. Others have been redesigned as sites for art or cooking classes, or for <a href="https://thebusinessofesports.com/2021/07/02/china-opens-countrys-first-esports-themed-shopping-mall/">multiplayer electronic gaming</a> and <a href="https://franchise.sandboxvr.com/what-u-s-franchisees-can-learn-from-the-chinese-mall-experience/">virtual reality experiences</a>. The Dream Time Mall in Wuhan contains <a href="https://indoorsnownews.com/2023/03/03/wuhan-opens-indoor-snow-centre-as-part-of-worlds-new-largest-mall/">an indoor snow center</a> that offers ski lessons, ice mazes and tubing.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/567752/original/file-20240103-15-8btgm3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="People crowd into a curved atrium around a giant screen." src="https://images.theconversation.com/files/567752/original/file-20240103-15-8btgm3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/567752/original/file-20240103-15-8btgm3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/567752/original/file-20240103-15-8btgm3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/567752/original/file-20240103-15-8btgm3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/567752/original/file-20240103-15-8btgm3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/567752/original/file-20240103-15-8btgm3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/567752/original/file-20240103-15-8btgm3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">People at Joy City Shopping Complex in Yantai, China, watch a live broadcast of the 2023 League of Legends world championship final on Nov. 19, 2023. League of Legends is a multiplayer online battle arena video game.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/people-gather-at-joy-city-shopping-complex-to-watch-a-giant-news-photo/1802127612">Tang Ke/VCG via Getty Images</a></span>
</figcaption>
</figure>
<p>I see these experiments as a shift in the meaning of the mall. What began as a cathedral of retail consumerism is becoming a place where people can connect and enjoy individual and collective experiences that aren’t available online. </p>
<p>Some U.S. malls are <a href="https://www.retaildive.com/news/5-creative-ways-malls-are-repurposing-their-space/594580/">moving in this direction</a>, but China is doing it on a much larger scale. Just as former Chinese leader Deng Xiaoping once asserted that his government was pursuing <a href="https://www.cgtn.com/how-china-works/feature/What-does-path-of-socialism-with-Chinese-characteristics-mean.html">its own version of socialism, with “Chinese characteristics</a>,” the U.S.-designed mall is being rewritten with Chinese characters.</p><img src="https://counter.theconversation.com/content/220181/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Rennie Short does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
China has a lot of vacant retail space, including many underused shopping malls. An urban policy scholar describes how the Chinese are rethinking what the mall is for.
John Rennie Short, Professor Emeritus of Public Policy, University of Maryland, Baltimore County
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/218711
2023-12-13T19:04:24Z
2023-12-13T19:04:24Z
From sexual liberation to fashionable heels, new research shows how women are changing North Korea
<figure><img src="https://images.theconversation.com/files/565055/original/file-20231212-15-fz337w.jpg?ixlib=rb-1.1.0&rect=131%2C15%2C1793%2C1131&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Lesley Parker</span></span></figcaption></figure><p>Kang* was 20 years old when she left her official job as a potato researcher in North Korea. She wanted to join the women who had taken up illicit market activities, first to survive the “<a href="https://www.wilsoncenter.org/article/how-did-the-north-korean-famine-happen">Arduous March</a>” (as the famine years of the mid-1990s were known), then to build better lives for themselves and their families outside the tight controls of the government.</p>
<p>Kang began trading goods like rice, metals and petroleum to generate an income well beyond what she could have expected from state-sanctioned employment. Eventually, before reaching South Korea in 2013, her most lucrative business was a brokerage service for young women who wished to work in factories in China.</p>
<p>Kang was one of the women who took part in the research for our new book, <a href="https://www.routledge.com/North-Koreas-Women-led-Grassroots-Capitalism/Dalton-Jung/p/book/9780367536961">North Korea’s Women-led Grassroots Capitalism</a>. As she told us,</p>
<blockquote>
<p>What was most rewarding about the work was the money. I could pay for my younger sister’s university tuition, as well as my stepchildren’s. I could even buy [Workers’] Party membership for my husband, eventually making him a party secretary. I felt myself maturing through businesses. </p>
<p>It was as if we were like party officials providing for their children. I could make all that possible with the money I earned.</p>
</blockquote>
<p>The emergence of grassroots capitalism in North Korea, through women like Kang, provides a cautionary tale for patriarchal societies everywhere: underestimate women at your peril. </p>
<p>Ironically, we found in our research that by seeking to exclude women from the public sphere and formal economy, North Korea’s government has actually spurred them to become entrepreneurs, with cascading effects on society.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/565046/original/file-20231212-15-sehe17.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/565046/original/file-20231212-15-sehe17.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/565046/original/file-20231212-15-sehe17.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/565046/original/file-20231212-15-sehe17.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/565046/original/file-20231212-15-sehe17.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/565046/original/file-20231212-15-sehe17.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/565046/original/file-20231212-15-sehe17.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Little shops have sprung up around Pyongyang, mostly run by women, selling food and other small items.</span>
<span class="attribution"><span class="source">Lesley Parker</span></span>
</figcaption>
</figure>
<p>How did this happen? North Korean authorities continue to oppress the public with a terror and surveillance culture aimed at containing the spread of capitalism. But it is men who have been their main focus – not women. </p>
<p>North Korea’s women, underestimated and operating in the shadows, have become increasingly adept at circumventing official monitoring and controls to create the space to drive significant economic and social change. </p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/565053/original/file-20231212-27-ao9lb3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/565053/original/file-20231212-27-ao9lb3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=899&fit=crop&dpr=1 600w, https://images.theconversation.com/files/565053/original/file-20231212-27-ao9lb3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=899&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/565053/original/file-20231212-27-ao9lb3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=899&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/565053/original/file-20231212-27-ao9lb3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1130&fit=crop&dpr=1 754w, https://images.theconversation.com/files/565053/original/file-20231212-27-ao9lb3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1130&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/565053/original/file-20231212-27-ao9lb3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1130&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A woman in a skirt above the knee, high-heeled shoes and carrying a designer-style handbag.</span>
<span class="attribution"><span class="source">Lesley Parker</span></span>
</figcaption>
</figure>
<p>Our book explores the complex ways in which North Korean women have exercised their agency through everyday life. Our research was based on 52 interviews with North Korean female defectors, NGOs and several field trips to North Korea and northeast China. Far from stereotypical brainwashed automatons or helpless victims needing protection, we found that North Korea’s women are strong, resilient and creative. </p>
<p>Through acts of covert resistance, they have been driving change in family relationships, women’s sexuality and reproductive issues, and women’s cultural identities. </p>
<h2>5 ways women are changing North Korea</h2>
<p><strong>1) Women are driving grassroots capitalism</strong></p>
<p>Women have become active players in the <a href="https://beyondparallel.csis.org/markets-private-economy-capitalism-north-korea/">emerging informal economy</a> centred on local markets, which pre-COVID <a href="https://www.nkeconwatch.com/category/statistics/">accounted</a> for roughly 80% of household income and more than 60% of people’s food and basic needs. </p>
<p>In short, North Koreans depend on women’s labour, both in the household and the marketplace, to survive. </p>
<p>In most North Korean families, women have become the main breadwinners. This has created more opportunities for women – and challenges for those who seek to control them, including the state. </p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/565044/original/file-20231212-17-1s7r7z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/565044/original/file-20231212-17-1s7r7z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/565044/original/file-20231212-17-1s7r7z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/565044/original/file-20231212-17-1s7r7z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/565044/original/file-20231212-17-1s7r7z.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/565044/original/file-20231212-17-1s7r7z.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/565044/original/file-20231212-17-1s7r7z.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A woman transports goods using a hand-pulled cart in the countryside in the south.</span>
<span class="attribution"><span class="source">Lesley Parker</span></span>
</figcaption>
</figure>
<p><strong>2) Gender roles are shifting</strong></p>
<p>Women have been driving changes that are destabilising two fundamental pillars of North Korea: socialism and deep-rooted patriarchy. </p>
<p>Women’s involvement in market activities has given them access to scarce resources, including money, and a level of public visibility and social interaction previously reserved for men. </p>
<p>Economic independence and a greater say in domestic decision-making have strained long-established family dynamics and challenged broader social norms. As Seol* explains:</p>
<blockquote>
<p>As the rations waned, women took more initiative and went out and worked outside the home. It was the men who stayed home. We began to expect that men should cook
and do domestic work. I think women and men reversed roles.</p>
</blockquote>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/565051/original/file-20231212-15-v3ur4y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/565051/original/file-20231212-15-v3ur4y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/565051/original/file-20231212-15-v3ur4y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/565051/original/file-20231212-15-v3ur4y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/565051/original/file-20231212-15-v3ur4y.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/565051/original/file-20231212-15-v3ur4y.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/565051/original/file-20231212-15-v3ur4y.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">A schoolboy stops for an ice-cream from a street vendor in Pyongyang. Changing family dynamics, with women earning more than men, is causing tension in families.</span>
<span class="attribution"><span class="source">Lesley Parker</span></span>
</figcaption>
</figure>
<p><strong>3) A sexual revolution is underway</strong></p>
<p>The way women experience and approach sexuality, relationships and marriage has become far more complex. This includes delaying marriage and more divorces. Non-traditional relationships are also flourishing, such as premarital and extramarital couplings (which have led to growing numbers of single mothers) and older women married to younger men. A young woman named Bae* told us:</p>
<blockquote>
<p>As I make a lot of money, I have high standards for a husband. While busy with money-making, I don’t have time to think about marriage or get married. </p>
</blockquote>
<p>Meanwhile, younger party-affiliated, city dwellers are adopting more liberal attitudes to dating and sex and more romantic views of relationships. As Joo* said:</p>
<blockquote>
<p>Many young people are dating in public right now. After watching South Korean dramas, young ladies call their boyfriend ‘oppa’ (or ‘brother’) like South Koreans. The young couples are going around with their arms around each other’s shoulders.</p>
</blockquote>
<p>Some women have also been strategically engineering relationships with Chinese men as a means of settlement in China, to ensure their safety. </p>
<p><strong>4) It’s all about the heels</strong></p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/565048/original/file-20231212-21-71opww.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/565048/original/file-20231212-21-71opww.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=899&fit=crop&dpr=1 600w, https://images.theconversation.com/files/565048/original/file-20231212-21-71opww.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=899&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/565048/original/file-20231212-21-71opww.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=899&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/565048/original/file-20231212-21-71opww.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1130&fit=crop&dpr=1 754w, https://images.theconversation.com/files/565048/original/file-20231212-21-71opww.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1130&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/565048/original/file-20231212-21-71opww.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1130&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Women in Pyongyang now wear higher heels and more colourful clothes that in previous years.</span>
<span class="attribution"><span class="source">Lesley Parker</span></span>
</figcaption>
</figure>
<p>While appearing to conform to patriarchal versions of femininity, women are actually constructing a new version of the ideal, hyper-feminine, North Korean woman. This is typically a means to access material goods and social rewards. </p>
<p>Through fashion choices and conspicuous consumption, these women are playing a key role in how status is now determined in North Korea. For example, high heels are de rigeur. Bae said:</p>
<blockquote>
<p>Women are obsessed with high heels. Probably because we girls are short. Whether women live in the countryside or in the mountains, we prefer these shoes, even on unpaved roads.</p>
</blockquote>
<p>Like their South Korean counterparts, the younger generation has become more interested in slender bodies and long straight hair. More women have undertaken not only double eyelid surgery, but also dimple surgery or nose surgery. Another woman, Gho, told us:</p>
<blockquote>
<p>We young people are just like South Koreans. We watch South Korean TV dramas in secret and wear pants like South Koreans do [laughter], and we dye our hair yellow like South Koreans do.</p>
</blockquote>
<p>Through these actions, women are challenging narrowly conceived, domestic ideals of wives and mothers and creating new sets of social expectations and constructions of femininity. </p>
<p>The way Paik* describes her decision to dye her hair and wear earrings is an example of how women are also emulating the country’s fashionable first lady <a href="https://en.wikipedia.org/wiki/Ri_Sol-ju">Ri Sol-ju</a>:</p>
<blockquote>
<p>Officials used to inspect everybody wearing earrings. But then Ri Sol-ju appeared wearing earrings and now the authorities can’t do much about it. People started becoming rebellious. In North Korea, dyeing hair is not allowed. […] These days, a lot of people dye their hair. </p>
</blockquote>
<p><strong>5) New propaganda versions of the ideal woman</strong> </p>
<p>The state has responded to this social change by shifting the way it presents the “ideal” woman in its propaganda. </p>
<p>For example, it is now promoting women who embody an attractive and dynamic blend of old and new, of loyalty and modernity - including the leader’s sister, wife and now daughter. For example, Ri regularly appears in Prada, Christian Dior and Chanel, or in looks inspired by these designers.</p>
<p>By doing this, the regime is seeking to co-opt social trends to maintain its legitimacy.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/565043/original/file-20231212-15-u1vhzr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/565043/original/file-20231212-15-u1vhzr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=265&fit=crop&dpr=1 600w, https://images.theconversation.com/files/565043/original/file-20231212-15-u1vhzr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=265&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/565043/original/file-20231212-15-u1vhzr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=265&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/565043/original/file-20231212-15-u1vhzr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=333&fit=crop&dpr=1 754w, https://images.theconversation.com/files/565043/original/file-20231212-15-u1vhzr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=333&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/565043/original/file-20231212-15-u1vhzr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=333&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Pyongyang trendsetters love logo-emblazoned goods.</span>
<span class="attribution"><span class="source">Lesley Parker</span></span>
</figcaption>
</figure>
<p>(*For security reasons, we use pseudonyms for the North Korean women who took part in this research.)</p><img src="https://counter.theconversation.com/content/218711/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bronwen Dalton receives funding from the Australian Research Council.</span></em></p><p class="fine-print"><em><span>Kyungja Jung receives funding from the Australian Research Council and the Academy of Korean Studies. </span></em></p><p class="fine-print"><em><span>Lesley Parker does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Through acts of covert resistance, women have been driving change in family relationships, women’s sexuality and reproductive issues, and women’s cultural identities.
Bronwen Dalton, Professor, Head of Department of Management, UTS Business School, University of Technology Sydney
Kyungja Jung, Associate Professor, University of Technology Sydney
Lesley Parker, Adjunct Fellow, University of Technology Sydney
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/206027
2023-07-17T15:06:18Z
2023-07-17T15:06:18Z
They Eat Our Sweat - new book exposes daily struggles of transport workers in Lagos
<figure><img src="https://images.theconversation.com/files/535262/original/file-20230703-266873-aa70gw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A minibus driver and an agbero exchange blows at Ojota, Lagos. </span> <span class="attribution"><span class="source">Pius Utomi Ekpei/AFP via Getty Images </span></span></figcaption></figure><p>Daniel E. Agbiboa’s book <a href="https://global.oup.com/academic/product/they-eat-our-sweat-9780198861546?cc=us&lang=en&">They Eat Our Sweat: Transport Labor, Corruption, and Everyday Survival in Urban Nigeria</a> explores the world of drivers of minibuses (danfo) and motorcycles (okada) in Lagos, the economic capital of Nigeria. <a href="https://wcfia.harvard.edu/people/daniel-e-agbiboa">Agbiboa</a> is assistant professor of African and African American studies at Harvard University. His research interests include the informal economy, urban change, mobility and youth politics. </p>
<p>The book describes the everyday interactions between the drivers, their conductors, union members regulating the garages through which they pass daily, and police officers. The drivers work 10 to 12 hours a day, six days a week, but go home without much revenue after paying daily “fees” or “dues” to bus owners, police officers and union members. </p>
<p>To gather materials for the book, Agbiboa worked as a conductor in a minibus for several months. He witnessed everyday forms of exploitation of these drivers by the police and touts. One driver summed it up: </p>
<blockquote>
<p>I work tirelessly each day, while the ‘baboons’ (touts and police) stand in the roundabout and just chop (eat) my sweat.</p>
</blockquote>
<p>Agbiboa reveals the micro dynamics of corruption and the drivers’ obligation to pay street-level bureaucrats from the National Union of Road Transport Workers and police. </p>
<p>His book is very welcome as he explores in detail the everyday survival of minibus and okada transport workers. Like many informal workers, transport operators have no fixed income, no days off and no social protection. And, as elsewhere on the continent, drivers have to speed to make ends meet. A central argument of the book is that corruption levels are high on the road.</p>
<p>My view, as a scholar of <a href="https://www.sciencespo.fr/histoire/en/researcher/Laurent%20Fourchard/76183.html">Nigerian history and political sociology</a>, is that the book’s solid empirical base makes it an important study of transport working conditions in the country. Agbiboa usefully questions the distinction – recently established by critical scholars – between “capitalist owners” (of minibuses) and “proletarian workers” (who have only their labour to sell) in Africa’s cities. In Lagos, he suggests, the workers have the potential to earn more money than the owners. </p>
<p>The author also places Lagos in a larger conversation about informal transport in Africa’s cities, moving beyond any exceptional character of Lagos. He rightly insists there is order beyond the apparent chaos in African cities.</p>
<p>The book also documents the efforts of some transport associations to challenge state laws which deprive workers of their revenues. In an attempt to promote Lagos as a “world class city”, the <a href="https://pmnewsnigeria.com/2012/09/04/lagos-traffic-law-okada-riders-vow-resistance/">2012 Lagos State Law</a> banned motorbike riders from operating on the most important roads of the state and wealthy neighbourhoods. <a href="https://www.channelstv.com/2012/12/13/okada-riders-loss-battle-against-lagos-traffic-law/">Okada attempted to resist but eventually lost</a>. The <a href="https://theconversation.com/nigerias-okada-motorcycles-have-a-bad-image-but-banning-them-solves-nothing-154765">saga</a> revealed the imbalance of power and the official narrative that associated motorbike drivers with crime, danger and disorder.</p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/nigerias-okada-motorcycles-have-a-bad-image-but-banning-them-solves-nothing-154765">Nigeria's okada motorcycles have a bad image, but banning them solves nothing</a>
</strong>
</em>
</p>
<hr>
<p>. </p>
<h2>Extortion and complicity</h2>
<p>Agbiboa suggests the daily encounters between <em>agbero</em> (the agents who collect fees from drivers for the transport union), drivers and police agents are marked by extortion and complicity. </p>
<p>The book asserts complicity between <em>agbero</em> and police agents and never between <em>agbero</em> and drivers. My own observations in several motor parks in Lagos suggest, however, that there isn’t always complicity between <em>agbero</em> and police, and that complicity between <em>agbero</em> and drivers is very common. Most <em>agbero</em> and drivers work together daily in the same garage for years, sometimes for decades. They know each other and develop various forms of sociability that could not be reduced to violent exploitation. </p>
<p>To a large extent, the book presents the drivers’ perspective, more than that of union members, whose voices are rarely heard. Most drivers are not members of the <a href="https://web.facebook.com/nurtwabuja/?_rdc=1&_rdr">National Union of Road Transport Workers</a>, but former drivers are often union members. </p>
<p>The union is powerful in regulating transport and plays a key role in electoral politics, two dimensions that remain to be explored in more detailed empirical works. </p>
<p>The book presents the union mainly as a criminal organisation. The author defends the hypothesis of a predatory union-state alliance that “eats the sweat” of drivers. This view has merit but it probably needs further explanation. </p>
<p><a href="https://www.tandfonline.com/doi/full/10.1080/02255189.2022.2132924">My own research suggests</a> there are more ambivalent relationships between union members, state officials, police and military officers at the grassroots level. Union members are often in conflict with the police while negotiating with police officers for the release of their drivers from police stations or jails. None of them want the drivers working under their authority to be arrested, and many of them try to protect them against police extortion in order to keep business flowing.</p>
<p>Agbiboa makes a welcome distinction between <em>agbero</em> identified with a specific garage or motorpark and “area boys”, or “delinquents” associated with a particular neighbourhood. <em>Agbero</em> do not want to be associated with crime: they think of themselves as workers. Still, <em>agbero</em> are criminalised in the book. They are the easy target of public criticism. </p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/537269/original/file-20230713-23-fn0yq9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A book cover" src="https://images.theconversation.com/files/537269/original/file-20230713-23-fn0yq9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/537269/original/file-20230713-23-fn0yq9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=922&fit=crop&dpr=1 600w, https://images.theconversation.com/files/537269/original/file-20230713-23-fn0yq9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=922&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/537269/original/file-20230713-23-fn0yq9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=922&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/537269/original/file-20230713-23-fn0yq9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1158&fit=crop&dpr=1 754w, https://images.theconversation.com/files/537269/original/file-20230713-23-fn0yq9.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1158&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/537269/original/file-20230713-23-fn0yq9.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1158&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The book.</span>
<span class="attribution"><a class="source" href="https://global.oup.com/academic/product/they-eat-our-sweat-9780198861546?cc=us&lang=en&">Oxford University Press</a></span>
</figcaption>
</figure>
<h2><em>Agbero</em> seen as outlaws</h2>
<p>Drivers insist that <em>agbero</em> are making easy money from their work but, as my <a href="https://www.tandfonline.com/doi/full/10.1080/02255189.2022.2132924">research</a> has found, <em>agbero</em> are often in the same precarious conditions as transport workers themselves. Their leaders impose on them a daily revenue target to be taken from the drivers. Many of them hardly make a living from their work. </p>
<p>In my view, the <em>agbero</em> has become the new figure of a long history of <a href="https://www.jstor.org/stable/4100568">criminalisation of poor young urban men</a>. Transport in Nigeria could be better understood if <em>agbero</em> were analysed as the least powerful members of the union working for the benefit of more powerful and better connected members of society: union bureaucrats, government officials, politicians and law enforcement agents who have a common interest in keeping this revenue system intact. </p>
<p>These remarks aside, Agbiboa’s book is the most detailed and accurate account of Nigeria’s road transport system so far.</p><img src="https://counter.theconversation.com/content/206027/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Laurent Fourchard does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
A new book focuses on the politics of road transport, the everyday corruption and the hard-living world of transport workers in Lagos, Nigeria.
Laurent Fourchard, Research Fellow, Sciences Po
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/200379
2023-03-14T19:59:23Z
2023-03-14T19:59:23Z
In Brazil, the future of environmental sustainability needs a strong ally: collectors of recyclable materials
<p>When Luiz Inácio Lula da Silva was sworn in for his third term as president of Brazil on January 1, 2023, he invited a diverse group to accompany him as he ascended the ramp to his offices. Among them, two symbolised the giant step that the country was taking toward a more promising ecological future: Chief Raoni Metuktire, a 90-year-old indigenous leader who dedicated his life to the defence of the Amazon rainforest, and Aline Sousa, a 33-year-old collector of recyclable materials, an occupation pursued by her family for three generations. It was Sousa who placed the presidential sash on Lula, representing not only the Brazilian people but also a message of hope for a more sustainable government for the next four years.</p>
<p>While little noticed, collectors of recyclable materials are omnipresent in Brazil and other developing countries, and their work has long been a critical part of waste management, disposal, and recycling. Working individually, in families or groups, or as part of an association, they pick up materials from households, businesses, and other locations, separate and sell them to recycling firms. Because they increase the amount of materials that can be recycled, collectors are crucial agents in creating a more sustainable world.</p>
<h2>Overlooked and undervalued</h2>
<p>In part because of the modest nature of materials collection and recycling, there has been comparatively little study on their environmental impact. <a href="https://sites.google.com/view/headinthecloudswasteallaround/p%C3%A1gina-inicial">Our research</a> focuses on waste management during large-scale events attended by millions. In particular, we’re exploring how value is created and destroyed during Catholic pilgrimages in Brazil.</p>
<p>Brazil is an ideal context to study waste management. In 2018, around <a href="https://www.ipea.gov.br/cts/pt/central-de-conteudo/artigos/artigos/217-residuos-solidos-urbanos-no-brasil-desafios-tecnologicos-politicos-e-economicos">79 million tons of solid waste</a> were generated. Just under 60% was collected for transit to controlled landfills, while the remainder went to garbage dumps.</p>
<figure class="align-center ">
<img alt="Recyclable materials collectors at work in Brazil" src="https://images.theconversation.com/files/513802/original/file-20230306-28-emvs6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/513802/original/file-20230306-28-emvs6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=327&fit=crop&dpr=1 600w, https://images.theconversation.com/files/513802/original/file-20230306-28-emvs6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=327&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/513802/original/file-20230306-28-emvs6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=327&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/513802/original/file-20230306-28-emvs6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=411&fit=crop&dpr=1 754w, https://images.theconversation.com/files/513802/original/file-20230306-28-emvs6.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=411&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/513802/original/file-20230306-28-emvs6.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=411&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Recyclable materials collectors at work in Brazil.</span>
<span class="attribution"><span class="source">Author provided</span></span>
</figcaption>
</figure>
<p>In Brazil, <a href="https://agenciabrasil.ebc.com.br/geral/noticia/2022-06/indice-de-reciclagem-no-brasil-e-de-4-diz-abrelpe">only 4%</a> of what could be recycled actually is, a rate far lower than that of countries with similar income and economic development levels. As a comparison, Chile, Argentina, South Africa, and Turkey have an average of <a href="https://agenciabrasil.ebc.com.br/geral/noticia/2022-06/indice-de-reciclagem-no-brasil-e-de-4-diz-abrelpe">16% recycling</a>.</p>
<p>According to Brazil’s <a href="https://www.gov.br/mdr/pt-br/assuntos/saneamento/snis/produtos-do-snis/diagnosticos/DIAGNOSTICO_TEMATICO_VISAO_GERAL_RS_SNIS_2021.pdf">National Sanitation Information System</a>, in 2020 there were 1,667 duly registered solid waste cooperatives in the country, which were responsible for collecting 35.2% of the solid waste collected. Throughout the country, 35,700 recyclable material collectors are associated in these cooperatives, while as many as <a href="https://www.oecd.org/environment/waste/Session_2-Part_1-From-informal-to-providers-Flavio-de-Miranda-Ribeiro-CETESB-Brazil.pdf">500,000 work informally</a>. Even more impressive is the fact that these workers are responsible for <a href="https://www.sciencedirect.com/science/article/abs/pii/S0921344919305002">89% of municipal solid waste</a> returned to industries as raw material.</p>
<p>Despite <a href="https://doi.org/10.7591/9781501707964">considerable progress in recent years</a>, most recyclable materials collectors gather and haul tons of paper, glass and plastics across sprawling cities under difficult and unsanitary conditions. Recyclable materials collectors are often low-literate, low-income people of colour. <a href="https://www.iswa.org/wp-content/uploads/2022/09/A-Seat-at-the-Table.pdf">Female collectors experience even more vulnerable conditions</a> as, beyond collecting, they play multiple roles (e.g., taking care of their children, older and disabled family members and housework). For many, collecting recyclables is their only source of income.</p>
<p>Even though these workers provide an extremely useful service to society as a whole, they regularly face prejudice and stigma. During <a href="https://sites.google.com/view/headinthecloudswasteallaround/p%C3%A1gina-inicial">interviews</a>, collectors mentioned they are often sworn at or cursed, and they lamented that city residents, businesses, and other institutions neither recognise nor facilitate the vital services they provide. Sentiments of frustration and humiliation are often expressed.</p>
<h2>Spokespersons for building environmental awareness</h2>
<p><a href="https://sites.google.com/view/headinthecloudswasteallaround/p%C3%A1gina-inicial">Our ongoing research</a> has also observed the strategic relevance of collectors as key intermediaries connecting homes and businesses that produce waste and recycling facilities. These workers are crucial because they have two primary skills:</p>
<ul>
<li><p>Knowledge: collectors hold a vast array of knowledge on material components, citizens’ disposal practices, and the environment. They acquire this deep knowledge primarily through observation of and discussion with city residents, and also sharing information with other collectors.</p></li>
<li><p>Reach: often equipped with homemade wheelbarrows (Figure 2), collectors are able to reach households everywhere, including those that are out of reach to motorised vehicles. In so doing, they create a capillary network of routes to recycling materials and then back out to where they’ll be processed.</p></li>
</ul>
<p>Many recyclable materials collectors develop bonds with city residents, and so can play an influential role in educating them on the separation and disposal of waste. They can thus help build awareness and be helpful agents during large-scale public events. Their educational work helps residents think more clearly about what they consume and facilitate better disposal practices, leading to a more humanised and efficient recycling process.</p>
<p>This article aims to shed light on one of the most essential and yet marginalised roles in the recycling ecosystem: the recyclable materials collector. These workers can become game changers for societies’ environmental objectives if recognised and valorised. According to <a href="https://agenciabrasil.ebc.com.br/geral/noticia/2022-06/indice-de-reciclagem-no-brasil-e-de-4-diz-abrelpe">Brazilian Association of Public Cleaning and Special Waste Companies (Abrelpe)</a>, in 2019, the amount of recyclables that end up in landfills represents a loss of 14 billion Brazilian reals annually (around 2.5 billion euros).</p>
<p>Brazil’s <a href="https://www.teraambiental.com.br/blog-da-tera-ambiental/plano-nacional-de-residuos-solidos">National Solid Waste Plan</a> proposes an increase goal in waste recovery by 50% in 20 years. Some of the materials would be recycled, while others would be composted or used for energy recovery. Consequently, investing resources to improve how collectors are equipped, formalising their support, and facilitating their vital work in the recycling chain should be at the core of environmental initiatives and public policies.</p><img src="https://counter.theconversation.com/content/200379/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Les auteurs ne travaillent pas, ne conseillent pas, ne possèdent pas de parts, ne reçoivent pas de fonds d'une organisation qui pourrait tirer profit de cet article, et n'ont déclaré aucune autre affiliation que leur organisme de recherche.</span></em></p>
Collectors of recyclable materials are omnipresent in developing countries such as Brazil, and their work has long been a critical part of waste management, disposal, and recycling.
Jannsen Santana, Postdoctoral Researcher - Lifestyle Research Center, EM Lyon Business School
Daiane Scaraboto, Associate Professor of Marketing, The University of Melbourne
Flavia Cardoso, Assistant Professor, Universidad del Desarrollo
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/200600
2023-03-07T10:43:15Z
2023-03-07T10:43:15Z
Africa’s shift to low-cost manufacturing puts women at risk - 4 lessons from the Asian Tigers
<figure><img src="https://images.theconversation.com/files/512878/original/file-20230301-18-or4zk6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.shutterstock.com/image-photo/addis-ababa-ethiopia-january-30-2014-1313445374">Shutterstock</a></span></figcaption></figure><p>Economists have urged African countries to shift to low-cost manufacturing – the path that led countries such as <a href="https://www.imf.org/external/pubs/nft/op152/chap1.htm">Hong Kong</a>, <a href="https://www.amazon.com/Third-World-First-Singapore-1965-2000/dp/0060197765">Singapore</a>, <a href="https://kellogg.nd.edu/sites/default/files/old_files/documents/166_0.pdf">South Korea</a> and <a href="https://www.ide.go.jp/library/English/Publish/Periodicals/De/pdf/69_01_04.pdf">Taiwan</a> – to industrial prosperity. These East Asian economies – which recorded high growth rates of <a href="https://www.stlouisfed.org/on-the-economy/2017/may/tigers-tiger-cubs-economic-growth">at least 7%</a> between the 1950s and 1990s – are commonly referred to as the <a href="https://tesi.luiss.it/15269/1/176201.pdf">Asian Tigers</a>.</p>
<p>Starting in the 2000s, many of Africa’s top economies achieved high growth rates through <a href="https://www.imf.org/external/pubs/ft/dp/2013/dp1302.pdf">natural resource extraction</a>. Mineral resources such as oil, natural gas and coal were the main export items. </p>
<p>Economists have <a href="https://www.imf.org/external/pubs/ft/wp/2013/wp13188.pdf">cautioned</a> that growth based on natural resources is vulnerable to global price fluctuations. Other limitations include weak linkages to domestic economies, low employment creation, negative impacts on local communities, tax avoidance by multinationals involved and climate change impacts.</p>
<p>By contrast, economists regard growth that is driven by low-cost export-producing manufacturing as <a href="https://set.odi.org/wp-content/uploads/2016/04/Export-Based-Manufacturing-in-Africa_Full-paper.pdf">more beneficial</a> for development. This is because it is seen as globally competitive and able to create a lot of low-wage jobs. The Asian Tigers partly relied on it to achieve their economic prosperity. </p>
<p>As a result, <a href="https://www.mckinsey.com/featured-insights/middle-east-and-africa/lions-on-the-move-realizing-the-potential-of-africas-economies">economic commentators</a> have been urging African countries to embrace export-led manufacturing. </p>
<p>A <a href="https://www.hurstpublishers.com/book/the-asian-aspiration/">recent book</a> written by some of Africa’s influential leaders and advisors sums up the call:</p>
<blockquote>
<p>The relevance of Asia’s example comes as Africa is facing a population boom, which can either lead to crisis or prosperity; and as Asia is again transforming, this time out of low-cost manufacturing into hi-tech, leaving a void that is Africa’s for the taking.</p>
</blockquote>
<p>Many African countries have heeded the call, specialising mainly in the manufacture of textiles, cloth, food and beverages. They include <a href="https://www.econstor.eu/handle/10419/229218">Kenya</a>, which has mainly been producing textiles at its <a href="https://epzakenya.com/#">export processing zones</a> for sale to the US, and <a href="https://www.ajol.info/index.php/aref/article/view/162150/151664">South Africa</a>, where <a href="https://www.imf.org/external/pubs/ft/wp/2016/wp1624.pdf">manufactured products</a>, mostly <a href="https://theconversation.com/south-africa-is-exporting-more-food-but-it-needs-to-find-new-growth-frontiers-200747">food items</a>, are key exports. Others include <a href="https://www.ajol.info/index.php/boje/article/view/60205">Botswana</a>, which has been trying to diversify its mineral-driven economy, <a href="https://www.wto.org/english/res_e/booksp_e/cmark_chap1_e.pdf">Mauritius</a>, where export of services has taken root, and <a href="https://openknowledge.worldbank.org/handle/10986/8788">Madagascar</a>.</p>
<p>Between 2005 and 2014, manufacturing production across the continent more than doubled from <a href="https://odi.org/en/insights/why-african-manufacturing-is-doing-better-than-you-think/">US$73 billion to $157 billion</a>. This was faster than the global average. </p>
<p>But the call to emulate the Asian Tigers could be ill-advised. As I argue in a <a href="https://www.tandfonline.com/doi/10.1080/03056244.2022.2047632?utm_source=CPB&utm_medium=cms&utm_campaign=JOE09624&_ga=2.254742028.562234278.1676534586-1508998848.1676534586&_gl=1*m9mzqv*_ga*MTUwODk5ODg0OC4xNjc2NTM0NTg2*_ga_0HYE8YG0M6*MTY3NjUzNDU4Ni4xLjAuMTY3NjUzNDU5MC4wLjAuMA..">recent paper</a>, such a move has significant gendered implications. It can lead to increased discrimination, widening inequality and crises in family life.</p>
<p>In particular, there are four lessons Africa’s fastest growing economies should learn from the four Asian Tigers.</p>
<h2>Lessons from Asia</h2>
<p><strong>1. Exploitation and control of low-waged female labour</strong>. The Tigers have relied heavily on women’s labour as a specific asset which is cheap, productive and easy to control. Records <a href="https://www.ilo.org/public/english/standards/relm/ilc/ilc93/pdf/rep-i-b.pdf">show</a> that low wages, poor working conditions, frequent layoffs and a lack of rights and union protection for women working in manufacturing industries have been rife in Asia since the 1980s. </p>
<p>Rapid economic growth and wealth for a few have come at the expense of many, with wages often insufficient to support families and working conditions undermining family life.</p>
<p><strong>2. Pushing more women into the informal economy</strong>. As women have sought to supplement the meagre incomes they get from their manufacturing work, female participation in the informal economy has surged. <a href="http://www.oit.org/public/english/protection/ses/download/docs/gender.pdf">Studies from Asia</a> reveal a direct correlation between growth in female participation in formal manufacturing sectors and growth in female participation in informal sectors.</p>
<p>In Africa, women already dominate the <a href="https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_626831.pdf">informal economy</a>. In addition to the risks of unstable earnings and no access to health insurance or to other economic and social safety nets, women carry the double burden of informal work and care responsibilities in the home. They experience a disproportionate impact from lack of access to social protection. They are more likely to experience discrimination in accessing financial and other services. And they are more likely to be intimidated and abused by others in the informal sector.</p>
<p><strong>3. Growing inequalities accompany growth</strong>. Tigers have succeeded in reducing poverty to varying degrees. But inequality has increased. A wide range of studies track the <a href="https://www.adb.org/sites/default/files/publication/41630/inequality-asia-and-pacific.pdf">polarising impacts</a> of changes in labour market and income distribution at both economic and social levels across the region. There’s a common pattern: highly skilled workers with more education see their incomes rise as those of low-skilled workers either stagnate or reduce. This trend is disproportionately felt by women. The pay gap is apparent even in countries where women have higher education attainment than men, such as <a href="https://www.ios.sinica.edu.tw/people/personal/ccf/GenderInequalityinEarningsinIndustrializedEastAsia.pdf">Taiwan</a>. </p>
<p>Widening inequalities are already a feature of many African states. In the absence of state policies to regulate wages, such inequalities are likely to deepen.</p>
<p><strong>4. A crisis in social reproduction</strong>. The impossibility of juggling paid work with unpaid work at home and within the community has resulted in a crisis in social reproduction in Asia. <a href="https://www.researchgate.net/publication/338358582_The_Gender_Wage_Gap_in_Four_Asian_Countries_Japan_Singapore_South_Korea_and_Taiwan">Studies</a> show increases in marriage age, decreases in fertility rates and growing numbers of divorces across the region. This may signal a newfound independence among Asian women – but it also represents a broader crisis in family life. </p>
<p>This crisis also threatens the very economic system which depends on it. African countries don’t usually have state support for family and community care. A similar crisis seems inevitable on the continent, where the nature and composition of families is already rapidly changing.</p>
<h2>What can be done?</h2>
<p>Asia’s labour-intensive and export-driven manufacturing path does provide an alternative to the environmentally damaging and socially dislocating natural resource exploitation which is also of <a href="https://www.tandfonline.com/doi/full/10.1080/03056244.2019.1605589">limited benefit to Africa’s local economies</a>. Yet not everyone stands to benefit from it equally. </p>
<p>The overall lesson from Asia’s decades of experience is that export-led policy is not gender-neutral. The export-oriented manufacturing increases gendered inequalities and discrimination. African countries should not replicate Asian experiences, but instead learn from them. </p>
<p>African analysts and policymakers should promote fair and progressive pay and working conditions for all workers. Greater public investment in infrastructure and social services is needed. And there should be policies that support and redistribute unpaid domestic labour. </p>
<p>As the Asian experiences have demonstrated, failure to act will worsen existing gendered inequalities and discrimination, and eventually undermine the essential social base of economic growth.</p><img src="https://counter.theconversation.com/content/200600/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Niamh Gaynor does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Asia’s much touted low-cost, export-oriented manufacturing model increases gender discrimination.
Niamh Gaynor, Associate Professor of International Development, Dublin City University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/200842
2023-03-06T15:01:22Z
2023-03-06T15:01:22Z
The real Johannesburg: 6 powerful photos from a gritty new book on the city
<figure><img src="https://images.theconversation.com/files/513197/original/file-20230302-29-6rlu6d.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">An abandoned gold mine in Johannesburg, South Africa.</span> <span class="attribution"><span class="source">Mark Lewis/Wake Up, This Is Joburg</span></span></figcaption></figure><p><em><a href="https://www.dukeupress.edu/wake-up-this-is-joburg">Wake Up, This is Joburg</a> is a collaboration between photographer Mark Lewis and urban planner and writer Tanya Zack. Striking images and beautiful texts follow 10 stories the team discovered in urban Johannesburg, South Africa. Each chapter captures many overlapping stories that come together around a character, a place or an activity. The book is an ethnographic portrait of one of Africa’s most vibrant and intriguing cities. We asked for the stories behind six of its images.</em></p>
<hr>
<h2>1. Chopping s'kop</h2>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/513187/original/file-20230302-18-ot9q1p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Several men chop and handle meat on makeshift tables, animal parts strewn on the floor." src="https://images.theconversation.com/files/513187/original/file-20230302-18-ot9q1p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/513187/original/file-20230302-18-ot9q1p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/513187/original/file-20230302-18-ot9q1p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/513187/original/file-20230302-18-ot9q1p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/513187/original/file-20230302-18-ot9q1p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/513187/original/file-20230302-18-ot9q1p.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/513187/original/file-20230302-18-ot9q1p.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Chopping cowheads in Kazerne parking garage.</span>
<span class="attribution"><span class="source">Mark Lewis/Wake Up, This Is Joburg</span></span>
</figcaption>
</figure>
<p>The most marginal of the activities and spaces the stories explore is the informal butchers who chop up cow heads in a disused parking garage in the heart of the inner city. The condemned building is next to formal structures and within view of banking head offices. </p>
<p>The cow heads, or s'kop, are bought for R10 (US$0.55) each by nearby formal butcheries and delivered to them in shopping trolleys. Every part is sold in this marginal economy. Flesh is stripped off the skull, bones are taken to be crushed for bone meal, and skins enter a unique processing operation in invisible spaces in the city and transformed into an edible form. </p>
<p>Andile Nkomo from KwaZulu-Natal province is the most muscular of the six butchers on the day we first visit and, we soon discover, the most active. But he admits his output varies. On mornings after he’s worked as a bouncer at a <a href="https://theculturetrip.com/africa/south-africa/articles/10-things-to-know-about-hillbrow-johannesburgs-notorious-neighbourhood/">Hillbrow</a> nightclub, he is not in peak form. “On a good day I chop 60 heads,” he says as he slams his axe repeatedly into skulls on the wooden industrial cable spool that is the butchers’ block.</p>
<h2>2. Breakfast on the run</h2>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/513182/original/file-20230302-28-jk5p08.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A woman stands in a dark space under a bridge in a beam of bright light, taking bread from a bag behind a table used for food preparation." src="https://images.theconversation.com/files/513182/original/file-20230302-28-jk5p08.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/513182/original/file-20230302-28-jk5p08.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/513182/original/file-20230302-28-jk5p08.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/513182/original/file-20230302-28-jk5p08.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/513182/original/file-20230302-28-jk5p08.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/513182/original/file-20230302-28-jk5p08.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/513182/original/file-20230302-28-jk5p08.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Monica Chauke serves customised breakfasts.</span>
<span class="attribution"><span class="source">Mark Lewis/Wake Up, This Is Joburg</span></span>
</figcaption>
</figure>
<p>Competition within the informal economy is tight. At the <a href="https://theconversation.com/south-africas-minibus-taxi-industry-has-been-marginalised-for-too-long-this-must-change-142060">minibus taxi</a> binding point Zola, micro-entrepreneurs offer barber services and sell food, snacks, socks, window wipers, mobile phone accessories and bumper stickers.</p>
<p>Stallholder Monica Chauke, originally from Limpopo province, is unperturbed by the competition for the appetites of the 600 taxi drivers. She knows that by midday she will have sold out of her unique offering and made her US$16 daily profit. Her niche is simple: she serves only breakfast. But there’s nothing simple about it. Monica has, over four years, worked out who likes what and caters to the specific tastes of her customers. This means making six egg-and-tomato, three cheese-and-tomato and four chicken-mayonnaise sandwiches, as well as six cheeseburgers each morning. And baking scones, frying balls of dough called <a href="https://theculturecook.com/recipe-afrikaner-vetkoek.html">vetkoek</a>, preparing a soup of beans and bones and making a meat stew. Her commitment to providing variety no matter how small the quantity has earned her loyal customers.</p>
<p>Monica wakes at 2am to prepare and package the food and the equipment she brings here. “I want to work here because no one is controlling me. It’s for myself,” she says. “My boyfriend brings and fetches me each day.” In his car? “No, in my car. He drives it.”</p>
<h2>3. Bed room</h2>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/513185/original/file-20230302-14-irnppr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="An older woman rests in bed, looking directly at the camera without smiling, papers stuck to the wall above her." src="https://images.theconversation.com/files/513185/original/file-20230302-14-irnppr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/513185/original/file-20230302-14-irnppr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/513185/original/file-20230302-14-irnppr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/513185/original/file-20230302-14-irnppr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/513185/original/file-20230302-14-irnppr.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/513185/original/file-20230302-14-irnppr.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/513185/original/file-20230302-14-irnppr.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Birthial Gxaleka runs a shelter in a one-bedroom apartment.</span>
<span class="attribution"><span class="source">Mark Lewis/Wake Up, This Is Joburg</span></span>
</figcaption>
</figure>
<p>From her bed in a small Hillbrow apartment, Birthial Gxaleka – a nurse from the Eastern Cape province – runs a non-governmental organisation and shelter. Her tenants share her one-bedroomed space, sleeping and living on a large raft of beds that leaves only a narrow corridor of standing room. At any one time, there are up to 34 residents, because it is rare for Birthial to turn anyone away. </p>
<p>Each person wants to make their way in the world: find a job, reconnect with lost family, get access to healthcare or simply secure a decent place to sleep. </p>
<p>In the inner city’s high-rise flatland, at human densities 10 times greater than Hong Kong, people find ways to get on with things.</p>
<h2>4. Under the city</h2>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/513188/original/file-20230302-24-3c9y13.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A man with a spry expression leans against a broken balustrade, his tattered clothes covered in dust." src="https://images.theconversation.com/files/513188/original/file-20230302-24-3c9y13.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/513188/original/file-20230302-24-3c9y13.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/513188/original/file-20230302-24-3c9y13.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/513188/original/file-20230302-24-3c9y13.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/513188/original/file-20230302-24-3c9y13.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/513188/original/file-20230302-24-3c9y13.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/513188/original/file-20230302-24-3c9y13.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Nandos Simao digs for gold in abandoned mines.</span>
<span class="attribution"><span class="source">Mark Lewis/Wake Up, This Is Joburg</span></span>
</figcaption>
</figure>
<p>“This park is closed until further notice. Entry strictly forbidden.” This is the sign at the entrance to the place where the metal that would make this the wealthiest gold-producing city on the planet was <a href="https://www.britannica.com/place/Johannesburg-South-Africa/History">first discovered</a>. It does not deter anyone. Least of all those with the grit to seek a living or a fortune in the abandoned mine shafts of the Witwatersrand reef.</p>
<p>Known as zama zamas (those who keep trying), they work the dumps and cavities underneath the city. We visit the Langlaagte belt, which contains more unmined gold than any other vein in Johannesburg’s gold reef. They call it FNB (First National Bank). Here zama zamas of all ages, backgrounds and ethnicity use the same ancient pick and shovel method to wrestle with the rock face. </p>
<p>It is Nandos Simao, leaning in elegant repose against the remains of a concrete wall, who catches our attention. The 23-year-old Mozambican lives in the Orange Farm informal settlement with two fellow miners, his cousins. The youngest is 17.</p>
<p>There are many ways to die underground. But it’s a livelihood on which whole settlements depend. Indeed, MaLetsatsi Mamogele is digging for gold under her shack in Fleurhof, a working class suburb west of Johannesburg. </p>
<h2>5. Good riddance</h2>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/513191/original/file-20230302-28-6nw65j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="In dim light, men pull trolleys with shiny containers loaded with cardboard." src="https://images.theconversation.com/files/513191/original/file-20230302-28-6nw65j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/513191/original/file-20230302-28-6nw65j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/513191/original/file-20230302-28-6nw65j.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/513191/original/file-20230302-28-6nw65j.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/513191/original/file-20230302-28-6nw65j.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/513191/original/file-20230302-28-6nw65j.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/513191/original/file-20230302-28-6nw65j.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Lucas Ngwenya recycles cardboard.</span>
<span class="attribution"><span class="source">Mark Lewis/Wake Up, This Is Joburg</span></span>
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<p>Young Mozambican Lucas Ngwenya and his two South African friends have lined up. It’s 6am. There’s a cold wind blowing on this open piece of land suspended between the private estate of the <a href="https://www.forbes.com/profile/nicky-oppenheimer/?sh=604e34ce3b93">Oppenheimers</a>, South Africa’s wealthiest family, and the headquarters of Hollard Insurance. It’s 4°C as the men begin their 5km trip to the recycling depot in Newtown to sell the materials they’ve collected from suburban dustbins over a fortnight. It will take two-and-a-half hours to drag their gargantuan loads.</p>
<p>Lucas seemingly has the lightest burden, but points out that the cardboard, which occupies double the capacity of his plastic quilted bag, will weigh in at over 150kg. The plastic bottles and white paper will bring this to 265kg. His body mass is 61kg. When he arrives at the depot he will be asked for R10 “for cool drink” as he cashes in his load. Because, the cashier says, she has been generous with the amounts she has recorded.</p>
<h2>6. Tony dreams in yellow and blue</h2>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/513192/original/file-20230302-17-c8ng8v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A visually rich exterior of a house with vintage cars, a mural of a town near water, a windmill, a statue of a tower, concrete wagon wheels and creepers." src="https://images.theconversation.com/files/513192/original/file-20230302-17-c8ng8v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/513192/original/file-20230302-17-c8ng8v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/513192/original/file-20230302-17-c8ng8v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/513192/original/file-20230302-17-c8ng8v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/513192/original/file-20230302-17-c8ng8v.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/513192/original/file-20230302-17-c8ng8v.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/513192/original/file-20230302-17-c8ng8v.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Tony Martins creates a palace.</span>
<span class="attribution"><span class="source">Mark Lewis/Wake Up, This Is Joburg</span></span>
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</figure>
<p>Tony Martins built his first house in Madeira, Portugal, in his early 20s – because his wife’s mother “wouldn’t let me take her until I had a house to live in”. Some 30 years later he’s transforming his modest home in Johannesburg’s “old south” into a veritable castle – using objects he finds at waste dumps. Tony is an outsider artist.</p>
<p>He admits he cannot stop himself. “I sleep for two or three hours, and then I wake and think what else I can do. Then I have to do them in the day.”</p>
<p>The house is a wonder of lights and murals, of manikins in domes and on motorbikes on the roof, of a traffic light and windmill and of multiple staircases with balustrades fashioned from found tennis racquets and bicycle wheels. It is the sort of delightful outcome of a city not intervening in the authentic expression and private worlds that are possible in urban spaces where excess, waste and cosmopolitanism collide.</p>
<p><em>The book is <a href="https://www.dukeupress.edu/wake-up-this-is-joburg">available</a> from Duke University Press</em></p><img src="https://counter.theconversation.com/content/200842/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tanya Zack does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
From butchers to hawkers, and shelters to miners, this book reveals the informal economy and texture of the city.
Tanya Zack, Visiting researcher, University of the Witwatersrand
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/185428
2022-06-30T13:35:49Z
2022-06-30T13:35:49Z
COVID hurt West and Central Africa’s small-scale fishers. They need more support
<figure><img src="https://images.theconversation.com/files/470582/original/file-20220623-51187-g5ccgx.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Coastal communities in West and Central Africa were severely affected by COVID which brought many aspects of food and seafood supply chains to a halt. </span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>From Senegal through Ghana to Cameroon, small-scale fishing is both a livelihood and a way of life for people in coastal parts of West and Central Africa, with more than <a href="https://tbtiglobal.net/wp-content/uploads/2021/01/TBTI_SSF-in-Africa-e-book_F.pdf">two million small-scale fishers</a>. It has been this way for centuries – but that is changing.</p>
<p>Fishers are faced with diminishing fish stocks, competition from foreign industrial fleets, <a href="https://link.springer.com/article/10.1007/s40152-020-00197-9">illegal fishing</a>, unstable governance, and a lack of infrastructure to support fishing operations. Small-scale fisheries in these countries, as in other areas of the global south, are often part of the <a href="https://doi.org/10.3389/fmars.2019.00171">informal economy</a>. Despite being critical to local livelihoods – across sectors, informal employment <a href="https://www.undp.org/africa/events/informal-economy-africa-which-way-forward">accounts for over 80%</a> of all employment on the continent – small-scale fisheries are generally not regulated or protected by the state. </p>
<p>The COVID-19 pandemic only worsened the situation. It brought many aspects of <a href="https://doi.org/10.3389/fsufs.2021.614368">food and seafood supply chains to a halt</a>. Fisherfolk and coastal communities in West and Central Africa were severely affected.</p>
<p>Our newly published <a href="https://www.sciencedirect.com/science/article/abs/pii/S0308597X22001518?casa_token=YW10ykXN-KoAAAAA:MVmbgKAz2xswpVdmSLlwp6KeqNwgB_GoX5etAFHtaJbfiFk_KwL19_pBm3eD2LLj7ZxjYEGMwsk">research from Cameroon and Liberia</a> studied these effects. We found that small-scale fisheries brought in fewer fish and less income. Fish wastage was also a bigger problem than usual because storage facilities weren’t available for fisherfolks. </p>
<p>These experiences, coupled with the sector’s bigger systemic problems before the pandemic, deserve attention. Fishing communities in West and Central Africa receive little attention from academics and policymakers despite their contribution to the region’s <a href="https://www.sciencedirect.com/science/article/pii/S0964569115001039?casa_token=paf9-SZLVNAAAAAA:m-ynoIRAH-ebWv7P3ZS7CenFGKBGbgTN7Z_vGda7zwSgVbU9_mphXxi6Kvwepr6PIjsQmxBGI4w">food security and employment economics</a>.</p>
<p>From better <a href="https://www.frontiersin.org/articles/10.3389/fmars.2022.873397/full">ocean stewardship activities</a> to better governance of these resources and those who depend on them, there is much to be done for small-scale fisheries in this region. There is a need for better innovations and policies to help improve the fisheries sector in this region.</p>
<h2>Vibrant, diverse fisheries</h2>
<p>Small-scale fishers in West and Central Africa have a great deal to tell researchers. Small-scale fisheries are <a href="https://link.springer.com/chapter/10.1007/978-3-319-94938-3_4">central to food and nutritional security</a>. </p>
<p>They are also remarkably multicultural. It is common to see people from other nationalities settled and fishing in a neighbouring country. In Cameroon, for example, <a href="https://www.sciencedirect.com/science/article/pii/S0308597X22001518?casa_token=YW10ykXN-KoAAAAA:MVmbgKAz2xswpVdmSLlwp6KeqNwgB_GoX5etAFHtaJbfiFk_KwL19_pBm3eD2LLj7ZxjYEGMwsk">our research</a> has shown that many fisherfolks are migrants from Ghana and Nigeria. Similarly, fishers in Liberia are mostly Ghanaians who have obtained fishing permits to fish in the country.</p>
<p>These patterns of migration result in highly culturally diverse fishing communities; fishers bring not just their families to these neighbouring countries but also their traditions and customs. However, this brings in problems in terms of access and mobilisation of collective efforts to address problems as they arise.</p>
<p>COVID-19 exacerbated existing threats to this important informal sector. For instance, it confirmed how the lack of robust governance systems at the state level leaves workers vulnerable to shocks like pandemics and climate change impacts. Workers in these fisheries rarely benefit from any sort of state protections or services related to their employment and occupational safety. </p>
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Read more:
<a href="https://theconversation.com/how-covid-affected-markets-and-livelihoods-in-kenyas-fisheries-sector-171748">How COVID affected markets and livelihoods in Kenya's fisheries sector</a>
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<p>They also don’t have access to the kind of infrastructure that might have kept fish fresh for longer during periods when markets weren’t open or people were afraid to leave their homes because of the pandemic. One Liberian fisher told us:</p>
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<p>COVID-19 affects our business greatly. Like before, we used to have many customers coming to buy our fresh fish at the beach, but currently, our mothers dry the fish we caught and take to the market. After weeks from drying the fish and they are not bought it gets spoiled.</p>
</blockquote>
<p>So, how can small-scale fishers in these countries be better supported?</p>
<h2>The need for action</h2>
<p>The <a href="https://www1.undp.org/content/singapore-global-centre/en/home/sustainable-development-goals/goal-14-life-below-water.html?utm_source=EN&utm_medium=GSR&utm_content=US_UNDP_PaidSearch_Brand_English&utm_campaign=CENTRAL&c_src=CENTRAL&c_src2=GSR&gclid=Cj0KCQjwhqaVBhCxARIsAHK1tiP4qYip1RjSbIiTdNgbJ2tYxbG7KzwE1IvrI5ju5f8klfPMCNSu-KQaAhbZEALw_wcB">UN Sustainable Development Goal 14</a> emphasises the need to conserve ocean resources and to use them sustainably.</p>
<p>Coastal populations are <a href="https://link.springer.com/referenceworkentry/10.1007/1-4020-3880-1_115#:%7E:text=Sub%2DSaharan%20Africa's%2081%25%20increase,thirds%2Dof%20all%20population%20growth.">growing</a>, and the dependency on fishing and the ocean in these places will continue to increase. Coastal dwellers’ wellbeing and livelihood are at risk – and that’s a threat to both the short and long-term resilience of the fish food system in West and Central Africa.</p>
<p>With increasing environmental stresses and emerging systemic shocks such as COVID-19, there is a need for action to not only achieve this but also to ensure the well-being of those who depend on these resources.</p>
<p>For example, the digitalisation of the fisheries sector could be a sustainable response approach to shocks. In North America, fisherfolks use digital services such as smartphone apps to sell and deliver seafood <a href="https://www.frontiersin.org/articles/10.3389/fsufs.2021.614368/full?&utm_source=Email_to_authors_&utm_medium=Email&utm_content=T1_11.5e1_author&utm_campaign=Email_publication&field=&journalName=Frontiers_in_Sustainable_Food_Systems&id=614368">to the consumer</a>. This could be replicated in West and Central Africa. Fisherfolks can use local telephone networks and e-money services to facilitate communications and transactions.</p>
<p>Also, the establishment of <a href="https://www.fao.org/in-action/globefish/market-reports/resource-detail/en/c/346469/">community supported fisheries</a> programmes can help reorganise local fish marketing, reduce fish losses across the value chain, and build community resilience to shocks.</p>
<p>Whatever approach is taken, it’s crucial to include the fishers themselves in discussing possible pathways forward. They can help guide policy makers on how to ensure <a href="https://www.au-ibar.org/au-ibar-projects/enhancing-sustainable-fisheries-management-and-aquaculture-development-africa">sustainable fisheries practices</a>. Regional and international bodies also need to get more involved by providing funding and institutional support to enhance the fisheries sector.</p><img src="https://counter.theconversation.com/content/185428/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Richard A. Nyiawung receives funding from the Social Sciences and Humanities Research Council of Canada, and the University of Guelph, Canada.</span></em></p><p class="fine-print"><em><span>Philip A Loring receives funding from the Arrell Food Institute, the Social Sciences and Humanities Research Council of Canada, and the Natural Sciences and Engineering Research Council of Canada. </span></em></p>
There is a need for better innovations and policies to help improve the fisheries sector in this region.
Richard A. Nyiawung, PhD Candidate in Geography and International Development Studies, University of Guelph
Philip A Loring, Associate Professor and Arrell Chair in Food, Policy, and Society, University of Guelph
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/184090
2022-06-05T07:20:50Z
2022-06-05T07:20:50Z
Nigeria has just hiked interest rates: why it’s the wrong recipe for curbing inflation
<figure><img src="https://images.theconversation.com/files/466614/original/file-20220601-48776-fb6nf8.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Interest rate hike may not directly impact the average Nigerian</span> <span class="attribution"><span class="source">Photo by Amos Gumulira/AFP via Getty Images</span></span></figcaption></figure><p>The Central Bank of Nigeria recently announced an <a href="https://www.bloomberg.com/news/articles/2022-05-24/nigeria-central-bank-surprises-with-first-rate-hike-in-six-years">increase</a> in the interest rate, from 11.5% to 13%, a 1.5 percentage point hike that took effect immediately. </p>
<p>Whenever the Central Bank changes the monetary policy rate, otherwise known as the discount or interest rate, deposit and other financial institutions follow suit. Banks will therefore be raising their lending rates, which will increase the cost of borrowing and reduce the demand for money. </p>
<p>The accepted logic is that this will lead to a reduction in consumption and investment, thereby cooling off the overheated economy. </p>
<p>According to the Central Bank, the interest rate was <a href="https://www.cbn.gov.ng/Out/2022/CCD/Central%20Bank%20of%20Nigeria%20Communique%20No.%20142%20of%20the%20Monetary%20Policy%20Committee%20Meeting%20Held%20on%20Tuesday%2024th%20May%202022.pdf">raised</a> to reduce inflationary pressure, narrow the negative real interest rate margin, restore investor confidence and boost remittances. </p>
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Read more:
<a href="https://theconversation.com/inflation-should-be-viewed-as-public-enemy-number-1-heres-why-183193">Inflation should be viewed as public enemy number 1: here's why</a>
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<p>Nigeria’s inflation rate was about <a href="https://nigerianstat.gov.ng/elibrary?queries=cpi">16.8%</a> as of April 2022. The rate was at an all-time high of about 18% a year ago, but dropped to 15% in <a href="https://www.cbn.gov.ng/rates/inflrates.asp">November 2021</a>. It has been on an upward trend since then, which explains why the Central Bank took a pre-emptive measure to tame it. </p>
<p>But in my view, we shouldn’t assume that monetary policy will work in Nigeria the way it works in other countries. </p>
<p>Firstly, its effectiveness in curtailing inflation in Nigeria is blunted because price increases are caused mainly by supply constraints. These include insecurity in food-producing areas of the country, poor infrastructure, the war in Ukraine which has pushed up the price of commodities such as wheat, and falling imports due to currency depreciation.</p>
<p>In addition, Nigeria’s large informal sector has very weak linkages with the formal financial sector. About <a href="https://punchng.com/80-4-of-nigerian-employment-in-informal-sector-says-wbank/">80%</a> of Nigerians are employed in the informal sector. Unlike households in developed countries, many Nigerians will not change their economic decision-making because of the interest rate increase. </p>
<p>There are also concerns about the timing of the increase. Nigeria is facing high levels of <a href="https://nairametrics.com/2022/05/30/why-cbn-interest-rate-hike-will-not-reduce-inflation-rate-in-nigeria/">unemployment and poverty</a>. Higher rates will have knock-on effects in the broader economy. For example, the manufacturers association of Nigeria’s big <a href="https://www.thisdaylive.com/index.php/2022/05/27/manufacturers-fault-hike-in-monetary-policy-rate/">worry</a> is that the rate hike would increase input costs and weaken the demand for manufactured goods.</p>
<p>How compelling are these concerns? Should the poor and working class in Nigeria be perturbed by the Central Bank’s decision?</p>
<h2>Who shouldn’t be worried</h2>
<p>The rate increase will not have significant effects on most low-income Nigerians for a few reasons. </p>
<p>First, domestic credit to the private sector in Nigeria is very low. It was just <a href="https://data.worldbank.org/indicator/FS.AST.PRVT.GD.ZS?locations=NG">12%</a> of gross domestic product (GPD) in 2020, compared with an average of <a href="https://data.worldbank.org/indicator/FS.AST.PRVT.GD.ZS?locations=ZG">40%</a> for sub-Saharan Africa.</p>
<p>Nigeria is one of the 20 or so countries in the world with a domestic credit to private sector ratio of <a href="https://data.worldbank.org/indicator/FS.AST.PRVT.GD.ZS">below 15%</a> of GDP.</p>
<p>Credit allocation to individuals and households is also low. This is because banks usually impose onerous conditions that make it nearly impossible for many Nigerians to obtain loans. </p>
<p>As of May 2021, for instance, consumer credit accounted for only <a href="https://www.cbn.gov.ng/Out/2021/RSD/May%202021%20Economic%20Report.pdf">10.2%</a> of total credit to the private sector. </p>
<p>Unable to obtain credit from financial institutions, many Nigerians use <a href="https://punchng.com/loan-sharks-devise-underhand-tactics-inflict-pains-on-cash-strapped-nigerian-borrowers/">loan sharks</a>. </p>
<p>The inability of many Nigerians to access loans from banks means they will not have to worry about paying higher rates on mortgages, credit cards, autos, and student loans. </p>
<p>Additionally, the rate hike will not have an impact on the prices of goods and services typically consumed by low-income Nigerians. Hikes in the prices of these basic food stuffs are driven by factors such as insecurity concerns as well as poor infrastructure that makes getting food to markets expensive. </p>
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Read more:
<a href="https://theconversation.com/a-gloomy-may-day-awaits-nigerian-workers-181545">A gloomy May Day awaits Nigerian workers</a>
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<p>What about growth and employment? An increase in interest rate <a href="https://www.usbank.com/financialiq/invest-your-money/investment-strategies/how-do-interest-rates-affect-investments.html">raises</a> borrowing costs. This, in turn, reduces investment, production, and employment. </p>
<p>But Nigeria does not fit this narrative. Much of its economic growth is driven, not by the production of goods, but by the export of oil and gas. Though a small percentage of the GDP, oil generates <a href="https://www.dw.com/en/nigeria-faces-a-tough-time-diversifying-from-oil/a-59494125">much</a> of the foreign exchange and government revenue needed to support other sectors of the economy.</p>
<p>Because credit to the private sector in Nigeria is very low relative to GDP, the impact of the rate increase on real-sector production and employment will not be substantial.</p>
<h2>Who should be worried</h2>
<p>Nigerians in the public sector in some states of the federation should be wary of the rate hike. </p>
<p>The state governments routinely borrow from banks to cover their huge budget deficits, and government debt has been on the increase over the years. Some have accumulated <a href="https://nigeriannewsdirect.com/nlc-set-to-fight-govs-over-unpaid-salaries-pensions/">several months</a> of unpaid salaries, gratuities, and pensions. </p>
<p>The interest rate increase will raise the borrowing costs of the government and result in the allocation of a higher proportion of revenue to debt servicing. This will affect the ability of the government to meet its capital and recurrent expenditures. In turn, this could exacerbate the delays in, or non-payment of, salaries, gratuities and pensions.</p>
<h2>A dysfunctional system</h2>
<p>If Nigeria was a well-functioning economy, the rate increase would attract investors. According to the <a href="https://www.ig.com/en/trading-strategies/what-is-purchasing-power-parity--ppp---191106">purchasing power parity theory</a> of exchange rates, a fall in the inflation rate would shore up the value of the Naira.</p>
<p>In addition, the hike would lead to an increase in the value of the Naira through what’s called “Carry Trade” – when portfolio investors borrow money from countries with low interest rates and invest the proceeds to take advantage of the spread between Nigeria’s high interest rate and low rates in other countries. </p>
<p>But Nigeria isn’t a well-functioning country. It has high levels of insecurity and political uncertainty. In addition, financial regulation is weak and the financial sector is fragile. It is therefore unlikely that portfolio investors would jump at the bait of high interest rates. </p>
<p>If anything, investors are <a href="https://www.stearsng.com/premium/article/foreign-investors-are-leaving-nigeria/">pulling their money out</a> because of these uncertainties, which partly explains why the Naira has been depreciating inexorably.</p>
<h2>The wrong approach</h2>
<p>Only the middle and upper-class Nigerians would gain from any long-term positive payoffs from the interest rate hike. No matter how one views the Central Bank of Nigeria’s rate increase, it is hard to fathom how it would benefit most Nigerians.</p>
<p>In my view, the policy of influencing the direction of the economy through interest rates and money supply – known as <a href="https://www.imf.org/external/pubs/ft/fandd/2014/03/basics.htm">monetarism</a> – is not the best strategy for fostering inclusive, employment-generating and poverty-alleviating economic growth in Nigeria. </p>
<p>The challenges of high unemployment and poverty rates are more ominous than inflation in contemporary Nigeria. Many observers believe that the <a href="https://guardian.ng/opinion/columnists/boko-haram-and-the-harassment-hypothesis/">high level</a> of violence and insecurity in the country is a by-product of economic dis-empowerment, especially among the burgeoning youth population in Nigeria.</p>
<p>Prioritising inflation over inclusive economic growth, unemployment and poverty is, in my view, the wrong decision. </p>
<p>What the country needs now is <a href="https://www.imf.org/external/pubs/ft/fandd/2014/09/basics.htm">Keynesianism</a> – an economic policy regime that would mobilise funds for massive job-creating investments in infrastructure, agriculture, labour-intensive manufacturing, and agro-processing.</p>
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Read more:
<a href="https://theconversation.com/nigeria-will-have-to-dig-deep-to-overcome-entrenched-patterns-of-poverty-177855">Nigeria will have to dig deep to overcome entrenched patterns of poverty</a>
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<p>The Central Bank already does this, albeit in a small way. To boost real-sector production and employment, it has been using “<a href="https://businessday.ng/financial-inclusion/article/cbn-introduces-11-intervention-schemes-for-non-interest-financial-institutions/">intervention funds”</a> to support strategic sectors of the economy. About 385 billion Naira (approximately $1.2 billion at the official exchange rate of 415 Naira = $1) was <a href="https://www.cbn.gov.ng/rates/mnycredit.asp">reserved</a> for intervention projects as of March 2022. </p>
<p>The funds are used to provide concessionary credit to sectors that boost the productive capacities of the economy. The aim is to ease supply constraints and ameliorate inflationary pressures. </p>
<p>Nigeria needs more of this approach.</p><img src="https://counter.theconversation.com/content/184090/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Onyeiwu does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
It is hard to fathom how Nigeria’s Central Bank interest rate increase would benefit most Nigerians.
Stephen Onyeiwu, Andrew Wells Robertson Professor of Economics, Allegheny College
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/182353
2022-05-10T13:57:06Z
2022-05-10T13:57:06Z
Insights from Zimbabwe on how to link formal and informal economies
<figure><img src="https://images.theconversation.com/files/461197/original/file-20220504-23-vm31z6.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A Zimbabwean broom vender pushes his bike on the streets of Chitungwiza outside Harare.</span> <span class="attribution"><span class="source"> ALEXANDER JOE/AFP via Getty Images</span></span></figcaption></figure><p>In 2003, Thabo Mbeki – then president of South Africa – described <a href="https://www.news24.com/Fin24/Mbeki-SA-has-two-economies-20031009">South Africa’s economy as being like a two-storey house</a>. The top floor was quite plush, with all the fittings packed neatly together. He referred to this as the modern, diversified economy within South Africa. Below that level, however, was an informal economy where the poor were trapped in poverty, with little or no skills. </p>
<p>Mbeki’s analogy went further: there was no interconnecting staircase between the two floors. In effect, South Africa had two economies and there was no bridge between them.</p>
<p>What Mbeki was describing is a common problem in developing countries, including South Africa’s neighbour Zimbabwe. My colleague Baldwin Guchu and I recently <a href="https://www.tandfonline.com/doi/full/10.1080/23322373.2022.2039052">conducted research</a> on an initiative in Zimbabwe that is trying to address the problem. In the paper we examined the role intermediaries are playing in connecting formal and informal economies in the country. South Africa can learn from this.</p>
<p>Since 1994 South Africa has built on the existing two-storey infrastructure without paying much attention to a stairway. At least, not one wide or sturdy enough to encourage upward movement. This poses a serious developmental problem – one shared by many developing economies.</p>
<p>Academic <a href="https://www.encyclopedia.com/social-sciences-and-law/sociology-and-social-reform/sociology-general-terms-and-concepts/economic-0">research</a> typically labels this as being a function of dualism and the lack of institutional connections between these dual economies: although institutions establish the “rules of the game” governing economic activity in each of these economies, the institutions do not bridge the two disparate economies and so they coexist but in isolation. </p>
<p>How often do we hear the refrain that big business does not do business with small business?</p>
<p>The result of this missing link is that the two economies struggle to engage with each other, leading to inefficiencies and substantial lost opportunities. Worse still, it entrenches social and economic divisions, and deepens inequality. We see this manifest in various ways in South Africa. </p>
<p>South Africa has deep and liquid financial markets, together with a highly functioning and well-regulated banking industry, which means our top-floor financial system measures well against any of the leading economies around the world. Access to capital should therefore be widely available.</p>
<p>But it’s not. Swathes of small businesses fail to meet the criteria set for top-floor financing. In developed economies, small businesses have a range of alternatives for financing from banks or other capital markets, including secured and unsecured options. </p>
<p>How can this be fixed? Claiming “it’s the government’s job” ignores other players who have the ability to play a more innovative intermediary role.</p>
<p>If South Africa’s two-storey economy is pronounced, Zimbabwe’s is severe. Its house is pyramid shaped. Yet there are attempts underway to connect the different levels. <a href="https://www.tandfonline.com/doi/full/10.1080/23322373.2022.2039052">Our research</a> looked at what these are.</p>
<h2>The role of intermediaries</h2>
<p>Zimbabwe has a reputation for weak and extractive political and economic institutions. The <a href="http://databank.worldbank.org/" title=" ">World Bank</a> estimates that the informal economy makes up approximately 60% of the total economy; roughly 90% of those considered “employed” work in the informal economy.</p>
<p>This is especially true in the agriculture space, where the combined legacy of colonialism and more recently, land grabs, has carved a chasm between large-scale commercial farmers and small-scale, often subsistence farmers.</p>
<p>These smaller agriculture producers cooperate in their villages through a system of mutual trust, but this way of doing things does not extend beyond the villages. Tight legal contracts are needed to sell to the bigger retail industry players. In addition, small-scale farmers need some level of financing to ensure access to machinery, and a sustainable supply of input commodities necessary to plant, harvest, and store their crops. </p>
<p>This is impossible without collateral to guarantee a loan, or without buying contracts from retailers. The result is that they are trapped in a vicious cycle – they can’t borrow money to produce, nor are they able to produce to borrow money.</p>
<p>That’s where an organisation like the private, for-profit entity <a href="https://thepalladiumgroup.com/about">Palladium</a> can step in. Its approach is collaborative. In this case it backed a donor funded project, acting as a bridge between the formal and informal economies connecting small-scale farmers to formal markets. In other words, the staircase between the two floors.</p>
<p>Palladium functions as an intermediary in various ways. It facilitates contract farming by connecting input suppliers with small-scale farmers, who then agree to sell the produce back to them at a pre-agreed future price. This addresses input financing and provides a guaranteed market for the farmers’ output. </p>
<p>It also builds partnerships with the private sector to enable mobile buying systems. This frees farmers from having to find a market, and ensures them a fair price; furthermore, it relieves them of the problem of storage and packaging. </p>
<p>As part of a consignment stock initiative, the intermediary also keeps an electronic transaction history farmers can use to access credit in the future by providing records and information that would otherwise be missing.</p>
<h2>Solutions</h2>
<p>All these interventions are better served by intermediaries rather than through bureaucratic government overreach. This is particularly true where government institutional capacity is weak and corruption is common.</p>
<p>Governments with little or no entrepreneurial mindset fail at this because they don’t see a gap they can fill in a sustainable way. What governments can do is enable policies that support these intermediaries to function effectively, and to recognise that the traditional boundaries between the public and private sectors are increasingly blurred and hybrid partnerships provide the potential for innovative solutions. </p>
<p>For its part big business needs to realise that maintaining the status quo of dual economies delegitimises markets and results in lost opportunities.</p>
<p>The question for intermediaries is to imagine ways in which bridging support can extend beyond project initiatives. These projects are time-bound, with limited budgets. If not implemented with longevity in mind, such interventions can create dependencies rather than solve them. That’s why longer-term, more sustainable solutions must be imagined, to bring the formal and informal economies closer together. And also to ensure permanent integration.</p>
<p>Without this kind of lateral thinking countries like Zimbabwe and South Africa will continue to have two-storey houses with no stairway, leaving the majority of citizens stranded on the ground floor, looking upwards. Such structural inequality is unsustainable.</p>
<p><em>Baldwin Guchu is a co-author of this article. He has a background in financial management. His work focuses on the nexus between institutions and financial markets in developing regions.</em></p><img src="https://counter.theconversation.com/content/182353/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Luiz does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
The informal sector in Zimbabwe is massive. Finding ways to connect it to the formal sector is vital.
John Luiz, Professor of International Business Strategy & Emerging Markets at the University of Sussex Business School, and the Graduate School of Business, University of Cape Town
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/180886
2022-05-08T08:02:05Z
2022-05-08T08:02:05Z
Street traders in South Africa play a vital role: how their rights can be protected
<figure><img src="https://images.theconversation.com/files/460945/original/file-20220503-18-ep6b19.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Street traders continue to be harassed by municipal officials.</span> <span class="attribution"><span class="source">GettyImages</span></span></figcaption></figure><p>The South African informal economy <a href="https://www.statssa.gov.za/publications/P0211/P02111stQuarter2021.pdf">accounts for 17%</a> of employment. <a href="http://www.statssa.gov.za/publications/P0276/P02762017.pdf">Street trading</a> is the largest. Street traders are scattered around the many corners of the country’s towns and cities. They sell a vast range of products.</p>
<p>Despite the significant role they play in economic and social development, street traders continue to be harassed by municipal officials. They face sustained forceful evictions, incessant confiscation of their goods, and the soliciting of bribes by police officials. These actions are indicative of the repressive relationship between the street traders and local government in South Africa.</p>
<p>The <a href="https://www.saflii.org/za/cases/ZACC/2014/8.pdf#page=17">justification</a> is often that street trading is unruly, chaotic, and disruptive, driving municipal authorities to forcefully remove and relocate street traders.</p>
<p>The issue has ended up before the country’s courts, including the <a href="https://www.saflii.org/za/cases/ZACC/2014/8.pdf">Constitutional Court</a>. The cases have included the <a href="http://www.saflii.info/za/cases/ZAKZDHC/2015/7.pdf">unlawful confiscation of goods</a> belonging to traders, <a href="https://www.seri-sa.org/images/SAITF_Judgment_CC.pdf">the removal of street traders</a> from their stalls and <a href="http://www.saflii.org/za/cases/ZASCA/2014/143.pdf">their arrest</a>. But as the <a href="https://www.saflii.org/za/cases/ZACC/2014/8.pdf#page=17">Constitutional Court has pointed out</a> the ability of people to earn money and support themselves and their families is an important component of the right to human dignity.</p>
<h2>Fulcrum of development</h2>
<p>We explored these issues in <a href="https://bit.ly/3twqJrP">recent research</a> on street trading and local economic development in South Africa. We found that a relationship of mutual understanding between street traders and local authorities would help advance local economic development. We argue that the informal sector constitutes the fulcrum of local economic development.</p>
<p><a href="https://bit.ly/3HNMOr1">Local economic development</a> is a process through which municipal authorities, community-based organisations, and local communities stimulate economic activity to create employment. It involves building on the resources of a local area. These include human, capital and institutional resources.</p>
<p>South Africa’s constitution <a href="https://www.gov.za/sites/default/files/images/a108-96.pdf#page=52">mandates</a> municipalities to drive local social and economic development. The mandate is fleshed out in the <a href="https://www.gov.za/sites/default/files/gcis_document/201409/whitepaper0.pdf">White Paper on Local Government</a> and the <a href="https://www.saflii.org/za/legis/consol_act/lgmsa2000384/">Municipal Systems Act</a>.</p>
<p>This effectively commands municipalities to forge relationships that can help them improve the livelihood of local communities. It also empowers municipalities to use legislative and other means to create environments that enable formal and informal businesses to thrive.</p>
<p>Local economic development can therefore be a tool for facilitating the growth of local economies, the creation of employment, and the reduction of poverty. And street trading can arguably help achieve these objectives. More so with <a href="http://www.statssa.gov.za/publications/P0211/Media%20release%20QLFS%20Q4%202021.pdf">rising unemployment</a> in South African. </p>
<p>In addition, street trading is widely regarded as a <a href="https://www.gov.za/sites/default/files/gcis_document/201409/ndp-2030-our-future-make-it-workr.pdf">“safety net”</a> against poverty.</p>
<h2>Principles, rights and duties</h2>
<p>We argue that the principles, values, rights and duties embedded in the Constitution are directly relevant to the advancement of the street trading as a tool for local economic development.</p>
<p>The principle of constitutionalism for instance, states that the regulatory powers, duties, and functions of municipalities are derived from and also limited by the Constitution.</p>
<p>This means that all the instruments such as bylaws that municipalities use to regulate street trading must comply with the Constitution. In practical terms, the conduct of every municipal official must always be informed by the Constitution.</p>
<p>But a review of some of the actions against street traders contradict the values, rights and duties set out in the Constitution. This has been confirmed by various high and constitutional court rulings.</p>
<p>Constitutionalism suggests that city authorities must balance the development and enforcement of regulatory instruments such as bylaws or municipal policies against the rights of street traders. These include the right to dignity, freedom of trade and occupation, property rights as well as access to information and the courts. These rights are all reinforced by the constitutional principles of legality, human dignity and <a href="https://www.gov.za/documents/constitution/chapter-1-founding-provisions#1">equality</a>. </p>
<p>Constitutionalism also requires that city authorities ensure that their powers and duties in regulating the informal sector are aligned with established constitutional principles. These include legality and the rule of law.</p>
<h2>Constitutional compass</h2>
<p><a href="https://bit.ly/3twqJrP">Our research</a> shows that there is merit in adopting a constitutional law approach to street trading. The constitutional compass would allow the sector to thrive. In turn this would help strengthen local economies. </p>
<p>For the authorities, the constitutional compass serves as a barometer for the conduct of officials.</p>
<p>It also dictates that the development, implementation and enforcement of local laws and policies should follow a more humane approach, grounded on the values of the Constitution. This requires an overhaul of rigid and callous local laws and policies that fall short of the humane constitutional approach.</p>
<p>In our view, street traders would be guaranteed a range of constitutional rights if local authorities complied with the dictates of the Constitution. This would enhance their ability to trade and help promote local economic development. </p>
<p>On the other hand, street traders should respect local laws and policies that are constitutionally compliant. This is in line with the governing powers of municipalities.</p><img src="https://counter.theconversation.com/content/180886/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nonhlanhla Ngcobo is a PhD Researcher of the NRF South African Research Chair in Cities, Law and Environmental Sustainability (CLES) at the North-West University. This research was partly funded by the National Research Foundation (NRF) (Grant number:115581). All viewpoints and errors are the authors' own.</span></em></p><p class="fine-print"><em><span>Anél du Plessis is the incumbent of the NRF South African Research Chair in Cities, Law and Environmental Sustainability (CLES) at the North-West University. This research was partly funded by the National Research Foundation (NRF) (Grant number: 115581). All viewpoints and errors are the authors' own. </span></em></p><p class="fine-print"><em><span>Oliver Fuo works for:
The North-West University, South Africa</span></em></p>
Street traders in South Africa play a significant role in the country’s economic and social development and deserve to be protected in terms of the Constitution.
Nonhlanhla Ngcobo, PhD Researcher South African Research Chair: Cities, Law and Environmental Sustainability (CLES) Faculty of Law, North-West University
Anél du Plessis, Professor of Law & NRF South African Research Chair in Cities, Law and Environmental Sustainability, North-West University
Oliver Fuo, Professor of Law, North-West University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/177466
2022-02-28T14:32:30Z
2022-02-28T14:32:30Z
Nigeria’s pandemic lockdown measures were hard on informal workers
<figure><img src="https://images.theconversation.com/files/447531/original/file-20220221-26-tboddj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A deserted Lagos road during the pandemic lockdown in April 2020. </span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/obanikoro-axis-of-ikorodu-road-lagos-nigeria-is-deserted-on-news-photo/1208999439?adppopup=true">Adekunle Ajayi/NurPhoto via Getty Images</a></span></figcaption></figure><p>During the first wave of the pandemic in Nigeria, security forces were <a href="https://www.vanguardngr.com/2020/03/covid-19-igp-orders-zonal-aigs-command-cps-to-enforce-social-restriction-orders/">mandated</a> to enforce lockdown and stay-at-home orders. Intended as public health measures, these controls inflicted collateral damage. </p>
<p>The damage included <a href="https://www.vanguardngr.com/2020/05/2310-violators-of-covid-19-lockdown-order-arrested-in-lagos/">arrests</a> and detention, harassment, <a href="https://www.premiumtimesng.com/news/headlines/392435-11-killed-by-nigeria-security-agents-others-during-lockdown-rights-commission.html">extrajudicial killings</a>, destruction of wares, maiming and torture. The controls also trampled on the human rights and economic rights of workers in the informal economy.</p>
<p>Nigeria’s informal economy accounts for <a href="https://www.boi.ng/wp-content/uploads/2018/05/BOI-Working-Paper-Series-No2_Economic-Development-through-the-Nigerian-Informal-Sector-A-BOI-perspective.pdf">65%</a> of the country’s total GDP and employs more than 90% of the workforce. </p>
<p>About <a href="https://www.theafricareport.com/600/lagos-the-taxman-cometh/">5.58 million people </a> 2.38 million men and 3.2 million women – make a living in the informal economy of Lagos. This <a href="https://guardian.ng/opinion/informal-economy-a-hidden-engine-of-growth/">represents</a> about three quarters of the State’s 7.5 million labour force. </p>
<p>These estimates show that a large percentage of Nigeria’s population depends on the informal economy for their livelihood. It follows that the adverse impact of the COVID-19 control measures on informal workers would be huge. The measures are hard on informal workers because they tend to need to work outside the home every day.</p>
<p><a href="https://www.tandfonline.com/doi/abs/10.1080/21622671.2021.1976262?journalCode=rtep20">Our research</a> focused on violations of human rights of informal workers in Nigeria by state actors. We call for an approach to pandemic control that recognises the nuances of local cultures and social economy. </p>
<h2>Studying the state’s actions</h2>
<p>We sourced data from the <a href="https://covid19.who.int/">WHO</a>, <a href="https://covid19.ncdc.gov.ng/">Nigeria Centre for Disease Control</a> publications portal, <a href="https://covid19.ncdc.gov.ng/media/files/COVID_19_BOOKLET_.pdf.pdf">policy documents</a> of the <a href="https://statehouse.gov.ng/wp-content/uploads/2020/04/PTF-COVID-19-Guidance-on-implementation-of-lockdown-policy-FINAL.docx-2.pdf">Nigerian government</a>, journal and newspaper articles, <a href="https://www.brookings.edu/blog/future-development/2020/07/02/how-well-has-nigeria-responded-to-covid-19/">blog posts</a> from press briefings and media interviews of government officials.</p>
<p>During the lockdown, movements were restricted and we couldn’t conduct face-to-face interviews and surveys. Thus we relied on a desk review of literature on COVID-19 control responses.</p>
<p>At the onset of the first wave of COVID-19 in Nigeria, the government <a href="https://nipc.gov.ng/wp-content/uploads/2020/04/COVID-19_REGULATIONS_2020_20200330214102.pdf?">declared</a> a state of emergency. It directed state actors, including security agencies, to take measures necessary to maintain law and order and protect citizens’ lives and property. They were also asked to keep essential public services working, and direct relief materials to the areas of greatest need. State actors enforced restrictions on movement and travel, bans on public gatherings, and closure of markets, businesses and schools.</p>
<p>Despite the <a href="https://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=25828">warning</a> by the United Nations High Commissioner for Human Rights that states should not violate human rights under the guise of exceptional or emergency measures, some actions of Nigerian security agencies violated the rights of informal workers. Of particular concern were those whose survival depends on <a href="https://journals.sagepub.com/doi/full/10.1177/0021909620960163">daily earnings</a> from outside the home. These include street vendors, petty traders, artisans, cart pushers, waste pickers, commercial motorcycle operators, and roadside motor mechanics.</p>
<p>The pandemic and the related containment measures <a href="https://unhabitat.org/sites/default/files/2020/10/wcr_2020_report.pdf">worsened</a> various forms of social, cultural and economic exclusion and inequality. This strongly affected vulnerable groups like <a href="https://www.wiego.org/sites/default/files/resources/file/Impact_on_livelihoods_COVID-19_final_EN_1.pdf">informal workers</a>. </p>
<p>Some states in Nigeria such as Abia, Ekiti, Lagos, Kaduna and Rivers recorded incidents of abuse such as destruction of traders’ wares by security operatives enforcing the lockdown policy. <a href="https://saction.org/human-rights-violations-during-covid-19-lockdown-in-nigeria/">Cases</a> were reported where security agencies were implicated in harassment, killings, maiming and torture.</p>
<p>Public transport services were shut down, leading to loss of income. Informal workers were left with little option than to walk long distances between their homes and places of work. Many who dared to move around were harassed and arrested by the security agencies. These impacts have been captured in <a href="https://www.bbc.com/news/world-africa-52317196">media reports</a>.</p>
<p>The lockdown policy <a href="https://theconversation.com/ghanas-lockdown-hit-vulnerable-workers-hard-what-needs-to-happen-next-time-156876">severely reduced</a> income-generating activities for informal workers and presented the dilemma of either ‘dying from the virus or dying from hunger’.</p>
<p>Nigeria has a <a href="https://www.jstor.org/stable/43950553?casa_token=-YZfMJmdPYMAAAAA%3AmT2Yra0l3HHh8HQDKuL1kZ4BcVZDbA-EveMKqgp65mwFI72qei45y1_6Vt-MlGQTdkTFOhdh0aDbBGCSlqx2RMBsyK9NDstDnoZkE_lKDdHMZzEzh9Lg&seq=1#metadata_info_tab_contents">Bill of Rights</a>, and these <a href="https://lawpadi.com/11-rights-every-nigerian-should-know-about/">rights</a> are contained in Chapter IV of the 1999 constitution. They include the right to life, right to dignity, right to personal liberty, right to freedom of movement, and right to freedom of assembly and association. State actors violated these rights under lockdown. </p>
<h2>How state actors got it wrong</h2>
<p>While the Nigeria Police <a href="https://guardian.ng/news/covid-19-igp-unveils-protocols-guidelines-for-police-other-law-enforcement-officers/">issued</a> some guidelines on enforcement of COVID-19 control measures, it left room for <a href="https://www.unodc.org/documents/nigeria//NPF_COVID-19_Guidance_Booklet_Final.pdf">discretionary use of force</a>. </p>
<p>The <a href="https://www.unodc.org/documents/nigeria//NPF_COVID-19_Guidance_Booklet_Final.pdf">guidelines</a> prescribed “use of force when absolutely necessary and to the extent proportionate to achieve the required result and in accordance with existing national legislation.” They didn’t consider the daily income earners who cannot survive without leaving their homes. Consequently, many Nigerians who obeyed the COVID-19 lockdown policy did not have food and income that their families needed. </p>
<p>The lockdown also closed schools and disrupted students’ education. While the children of the elite took online lessons and used digital platforms for learning, the children of informal workers had no such opportunity. </p>
<p>COVID-19 containment programmes raised important legal, constitutional and <a href="https://blog.petrieflom.law.harvard.edu/2020/06/04/the-law-and-human-rights-in-nigerias-response-to-the-covid-19-pandemic/">human rights concerns</a>. </p>
<h2>What we suggest</h2>
<p>Any future lockdown strategies must consider the risks to both lives and livelihoods. Approaches like lockdown and stay-at-home orders may not benefit societies dominated by <a href="https://theconversation.com/why-african-cities-should-have-engaged-non-state-actors-in-the-fight-against-covid-19-147926">informal economies</a>. </p>
<p>We <a href="https://www.tandfonline.com/doi/full/10.1080/21622671.2021.1976262">argue</a> that the enforcement of COVID-19 containment policies in Nigeria neglected social structures and the way the local economy works. It undermined the human rights of informal workers who depend on daily social interactions for their livelihood. </p>
<p>The nuances of culture also should be taken into consideration before large scale adoption of these control practices. And security agents need training on human rights as part of effective implementation of COVID-19 containment measures in Nigeria.</p><img src="https://counter.theconversation.com/content/177466/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Lockdown and stay-at-home orders may not benefit societies dominated by informal economies.
Chidi Nzeadibe, Professor of Environmental Management & Sustainability, University of Nigeria
Christian Ezeibe, Senior Lecturer, Political Science, University of Nigeria
Kelechi Elijah Nnamani, Lecturer and Researcher, Department of Political Science, University of Nigeria
Nkemdilim Patricia Anazonwu, Lecturer and researcher, Social Work, University of Nigeria
Nnabuike Osadebe, Lecturer, Sociology and Anthropology , University of Nigeria
Obiora Anichebe, Associate Professor of Social and Political Philosophy, University of Nigeria
Peter Mbah, Professor of Political Science, Department of Political Science, University of Nigeria
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/170325
2021-11-07T08:45:19Z
2021-11-07T08:45:19Z
The World Bank and IMF are using flawed logic in their quest to do away with the informal sector
<figure><img src="https://images.theconversation.com/files/429993/original/file-20211103-15-1ta72bz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Informal head porter workers Percent Boatemaq (left) and Lusaka Fuseina (right) carrying goods on their heads at Agbogbloshie market in Accra, Ghana. </span> <span class="attribution"><span class="source">Photo by Jonathan Torgovnik/Getty Images</span></span></figcaption></figure><p>Many low and middle-income countries face a myriad of challenges. But policies that can address them are few and far between. The challenges include high and rising inequality, budget crises and the ongoing pandemic. </p>
<p>In a set of recent outputs, the <a href="https://thedocs.worldbank.org/en/doc/37511318c092e6fd4ca3c60f0af0bea3-0350012021/related/Informal-economy-full-report.pdf">World Bank</a> and the <a href="https://www.elibrary.imf.org/view/books/071/29292-9781513575919-en/29292-9781513575919-en-book.xml?cid=va-cin-compd-ieatw&BookTabs=BookTOC">International Monetary Fund</a> (IMF) presented an approach that they argue can tackle all three crises at the same time: fighting informal economies.</p>
<p>Their arguments are premised on the claim that informality <a href="https://www.worldbank.org/en/news/press-release/2021/05/11/widespread-informality-likely-to-slow-recovery-from-covid-19-in-developing-economies">undermines</a> efforts to both slow the spread of the pandemic and boost economic growth. They also believe that <a href="https://www.worldbank.org/en/news/podcast/2021/05/24/as-covid-19-wreaks-havoc-on-service-workers-is-the-informal-sector-increasing-global-inequality-the-development-podcast">abolishing informality</a> will lead to more tax revenues. </p>
<p>However, based on our organisations’ extensive research into informality and taxation we argue that their analysis is fundamentally flawed in its understanding of both the causes and consequences of informality. This is not a mere academic issue. Their reports endorse policies that will fail to deliver on their promises of higher growth and tax income. Blaming informal workers, rather than the structural conditions that leave them with no option but informal work, effectively blames the victims of global inequality while wondering why they’re not picking themselves up by their bootstraps.</p>
<p>In addition, what’s put forward as pro-poor interventions in the reports in fact risk actively increasing inequality and further disadvantaging vulnerable populations. </p>
<h2>Blame the symptoms or the structures?</h2>
<p>Recent <a href="https://thedocs.worldbank.org/en/doc/37511318c092e6fd4ca3c60f0af0bea3-0350012021/related/Informal-economy-full-report.pdf">flagship</a> <a href="https://www.elibrary.imf.org/view/books/071/29292-9781513575919-en/29292-9781513575919-en-book.xml?cid=va-cin-compd-ieatw&BookTabs=BookTOC">reports</a> and <a href="https://www.worldbank.org/en/news/press-release/2021/05/11/widespread-informality-likely-to-slow-recovery-from-covid-19-in-developing-economies">accompanying commentary</a> by both the IMF and the World Bank demonstrate a somewhat flippant approach to causality. They do this by framing informality as a cause, rather than a symptom of a weak or faltering economy. </p>
<p>The authors of both reports start off on safe ground. They observe that countries with high levels of income inequality also generally have high rates of informal employment (informality).</p>
<p>They also correctly note that they can’t demonstrate causality and that there is no ‘one size fits all’ policy approach.</p>
<p>But the reports then go on to abandon their own caveats when they get to the analysis or policy recommendations. </p>
<p>Demonstrating a similar logic, one World Bank blog, for instance, insinuates that an increase in <a href="https://blogs.worldbank.org/jobs/blame-covid-19-blame-informality-too-or-maybe-more">unemployment in Peru</a> is the result of informality, rather than the COVID pandemic.</p>
<p>This is not just a harmless analytical sleight of hand or benign semantic error. The result is that <a href="https://thedocs.worldbank.org/en/doc/37511318c092e6fd4ca3c60f0af0bea3-0350012021/related/Informal-economy-Chapter-6.pdf">the bulk of the policy recommendations</a> that stem from this analysis aim to eliminate the informal economy. They suggest that by simply removing informality, inequality would then decrease. </p>
<p>The World Bank’s odd approach to causality allows it to frame any policy that cracks down on informality as also addressing inequality, while largely ignoring <a href="https://www.wiego.org/support-informal-workers-during-after-economic-crises">a wider set of targeted interventions</a> that aim to improve the livelihoods, security, stability and earnings of the most vulnerable workers. </p>
<h2>Informality and taxes</h2>
<p>The second fundamental flaw in the reports’ analysis relates to the <a href="https://www.elibrary.imf.org/view/books/071/29292-9781513575919-en/ch010.xml">assumption</a> that eliminating informality will automatically increase tax revenues. This relies on the idea that tax evasion is “at the core of informality”. This is then baked into key concepts and measurements. </p>
<p>However, this simply does not match the reality of either <a href="https://opendocs.ids.ac.uk/opendocs/bitstream/handle/20.500.12413/16869/ICTD_WP127.pdf?sequence=1&isAllowed=y">informality</a> or <a href="https://opendocs.ids.ac.uk/opendocs/bitstream/handle/20.500.12413/15661/ICTD_WP111.pdf?sequence=1&isAllowed=y">taxation</a> in much of the Global South. </p>
<p>Tax evasion does indeed exist, including in a subset of the informal economy. But the analysis still mischaracterises the majority of the sector. Critically, it conflates deliberate evasion with the non-payment of taxes by workers who would typically be far below any tax thresholds.</p>
<p>Indeed, much employment in the informal sector is comprised of survivalist own-account operators. These are likely to be earning too little to be ‘evading’ tax in any substantial way. </p>
<p>In emerging and developing countries, <a href="https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/documents/publication/wcms_626831.pdf">direct measures</a> of informal employment show that 78.1% of all economic units are own-account workers in the informal sector. This is even higher in African countries at 87.3%. By contrast, only 4.4% are informal sector employers. </p>
<p>As a further indication of limited tax liability, the share of the working poor in informal employment ranges from 50.4% to about 98% in developing and emerging countries (at US$3.10 PPP per capita per day).</p>
<p>Informal workers do pay taxes – notwithstanding these low levels of earnings. The regressive way in which the informal sector is already (over) taxed is <a href="https://actionaid.org/sites/default/files/publications/informal_sector_taxes.pdf">well documented</a>. For instance, a <a href="https://editorialexpress.com/cgi-bin/conference/download.cgi?db_name=CSAE2012&paper_id=500">2013 World Bank study</a> of informal micro-enterprises in Uganda found that 70% were below the national business tax but still paid a substantial share of their profits to local authorities. The poorest payed the highest share of profits.</p>
<h2>Carrot and stick</h2>
<p>Based on their flawed premises, these analyses further assume that the informal economy can be eliminated by lowering taxes for formal enterprises (the carrot) while increasing taxes for unregistered or informal businesses (the stick). </p>
<p>For example, <a href="https://www.worldbank.org/en/news/press-release/2021/05/11/widespread-informality-likely-to-slow-recovery-from-covid-19-in-developing-economies">the World Bank argues</a> that it is necessary to </p>
<blockquote>
<p>streamline tax regulation to lower the cost of operating formally and increase the cost of operating informally. </p>
</blockquote>
<p>But this understanding of the root causes of informality and the benefits of formalisation is ungrounded. It also leads to policies that don’t raise much tax revenue, while actively distracting from <a href="https://www.wiego.org/informal-worker-demands-during-covid-19-crisis">policies that can help those in informal employment</a>. </p>
<p>This often happens in two ways. First, policy interventions to better ‘include informal economies in the tax net’ – or formalise them – are often sold with bold promises about the potential public revenue that they can generate. This suggests that informality is hiding a ‘<a href="https://news.bloombergtax.com/daily-tax-report-international/taxing-the-informal-sector-nigerias-missing-goldmine">gold mine</a>’ for public coffers. </p>
<p>But many informal workers aren’t eligible for national taxation due to very low incomes. The risk, therefore is, <a href="https://opendocs.ids.ac.uk/opendocs/bitstream/handle/20.500.12413/16574/ICTD_SummaryBrief%2024_Online.pdf?sequence=1&isAllowed=y">that not a lot of revenue is actually brought in</a> – all while adding further financial burdens on the poorest groups in society. </p>
<p>Critically, they may serve as <a href="https://opendocs.ids.ac.uk/opendocs/bitstream/handle/20.500.12413/15661/ICTD_WP111.pdf?sequence=1&isAllowed=y">distractions</a> from taxing economic actors that could bring in significant revenue. These include politically connected businesses or <a href="https://opendocs.ids.ac.uk/opendocs/bitstream/handle/20.500.12413/15181/ATAP17.pdf?sequence=1">unregistered independent professionals</a> such as lawyers and dentists.</p>
<p>Second, focusing on taxation risks crowding out meaningful support that people in informal work require. There are real and complex challenges faced by people in informal economies: they range from harassment by authorities to unsafe working spaces to low incomes and a lack of access to finance or social safety nets. </p>
<p>Focusing primarily on eliminating informality risks creating an impression that formalisation can happen simply by getting people on tax registers or lowering the ‘costs of formality’. This ignores the question of what the benefits of formality are and how accessible they are. And it risks drawing attention away from the wide and complex set of reforms that are needed to support people both in informal work, and vulnerable work more widely.</p>
<h2>A more productive way forward</h2>
<p>The policy recommendations that follow from this reasoning won’t be helpful in addressing inequality. In fact, they may actually increase it by not addressing the underlying issues that lead to informality and informal employment. </p>
<p>Indeed, the suggestion that redistributive policies are bad for the poor in the informal economy, but that heavier taxation is good for them is a puzzling, at best, and deeply cynical, at worst, conclusion of the reports. </p>
<p>Rather than focusing on eliminating the informal economy, influential international actors like the World Bank and the IMF and domestic policymakers would have a greater impact on inequality by focusing on <a href="https://www.ictd.ac/blog/how-tax-after-pandemic-covid/">progressive taxation</a> and the <a href="http://eprints.lse.ac.uk/110525/1/275_Article_Text_448_1_10_20210413.pdf">expansion of social protection</a> for the poor, regardless of employment status.</p><img src="https://counter.theconversation.com/content/170325/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mike Rogan is a Research Associate with the global-research-advocacy network WIEGO (Women in Informal Employment: Globalizing and Organizing). </span></em></p><p class="fine-print"><em><span>Max Gallien is a Research Fellow with the Institute of Development Studies and the International Centre for Tax and Development.</span></em></p><p class="fine-print"><em><span>Vanessa van den Boogaard is a Research Fellow at the International Centre for Tax and Development. </span></em></p>
Influential international actors like the World Bank and the IMF should focus on expanding social protection rather than focusing on eliminating the informal economy.
Mike Rogan, Associate professor, Rhodes University
Max Gallien, Research Fellow, Institute of Development Studies
Vanessa van den Boogaard, Research Fellow, Institute of Development Studies
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/168897
2021-09-29T09:08:41Z
2021-09-29T09:08:41Z
How to ensure global debates about inequality are informed by views from developing countries
<figure><img src="https://images.theconversation.com/files/423772/original/file-20210929-18-198n7q9.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Bag sellers at Kumasi market in Ghana. Over 80% of workers on the continent work in the informal sector.</span> <span class="attribution"><span class="source">Photo by DeAgostini/Getty Images</span></span></figcaption></figure><p>In the last decade inequality has been placed at the centre of the agenda for global social and economic policy. This has been driven in large part by the pioneering work of the British economist <a href="https://www.tony-atkinson.com/">Sir Tony Atkinson</a>, French economist <a href="https://www.ineteconomics.org/research/experts/tpiketty">Thomas Piketty’s</a> Capital in the Twenty-First Century, and the work of sociologists like <a href="https://www.therborn.com/">Goran Therborn</a>.</p>
<p>All of the key United Nations development targets such as the <a href="https://sdgs.un.org/">Sustainable Development Goals</a> are informed by, and have as their key targets, the need to address growing levels of inequality across the globe. </p>
<p>Global attention on inequality is also informed by a set of issues that have given rise to more virulent right-wing politics in the US, the UK and much of Europe. This is the outcome of growing levels of inequality and high levels of discontent among so-called “blue-collar” workers, and the consequent rise of <a href="https://cddrl.fsi.stanford.edu/publication/identity-demand-dignity-and-politics-resentment">identity politics</a>.</p>
<p>But, in our view, debates about inequality have not been <a href="https://www.routledge.com/Inequality-Studies-from-the-Global-South/Francis-Valodia-Webster/p/book/9780367235680">sufficiently informed</a> by perspectives from the global South. </p>
<p>If we are to address inequality across the globe the issue of inequality between countries – and the historical and political factors giving rise to this – cannot be ignored.</p>
<p>Given this reality, we have identified four main issues that we believe should drive the research agenda in the global South. Notwithstanding the focus across the globe on the issue of inequality, in reality, very little has been achieved to fix the problem. This is most starkly shown by the COVID-19 pandemic, which has exposed massive inequalities across the globe.</p>
<p>Part of the reason for this is that the realities of inequality in the global South, and the forces driving these patterns, aren’t sufficiently understood. For example, according to the <a href="https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_627189/lang--en/index.htm#:%7E:text=In%20Africa%2C%2085.8%20per%20cent,in%20Europe%20and%20Central%20Asia.">International Labour Organisation</a> in Africa around 85.8% of employment is informal. These workers do not form part of how labour markets are traditionally understood. </p>
<p>Another big difference is that in much of the global North, fiscal transfers are able to improve inequality outcomes. The global South has limited fiscal scope because it lacks the ability to raise large tax revenues.</p>
<h2>Focus areas</h2>
<p>Based on our insights from setting up the <a href="https://www.wits.ac.za/scis/">Southern Centre for Inequality Studies</a>, and our first four years of research, we have identified four areas that we believe should be at the forefront of the research agenda of academics in the global South. </p>
<p>We set them out below.</p>
<p><strong>Technical solutions:</strong> These include fiscal transfers. While important, they are not by themselves sufficient to address inequality. What is needed is a fuller understanding of the political, social and economic factors driving the growth in inequality. This includes how these forces may be different in the global South. Inequality is a global problem, but this does not mean its causes are universal. Inequality is in essence an issue of power, which is socially constructed. For this reason, context matters. While inequality is a global problem, its growth is most pronounced and the political, social and economic challenges it poses are most complex and pronounced in the global South.</p>
<p><strong>Money-metric assessments:</strong> One example of these assessments is the <a href="https://corporatefinanceinstitute.com/resources/knowledge/economics/gini-coefficient/">Gini coefficient</a>, which measures levels of inequality. These assessments have been useful for measuring inequality but don’t offer useful solutions. Inequality studies and policies need to move away from a preoccupation with these measures. This is important if we are to understand inequality as a violation of human dignity. Here, a multidisciplinary approach is called for if we are to solve the inequality challenge. History, sociology, gender studies, anthropology, philosophy, the natural sciences, and health sciences have as much to contribute as economics. </p>
<p>It is for this reason for example that UNAIDS executive director <a href="https://www.unaids.org/en/resources/presscentre/pressreleaseandstatementarchive/2019/august/20190814_unaids-exd">Winnie Byanyima </a> will present the <a href="https://www.wits.ac.za/scis/">Southern Centre for Inequality Studies’</a> annual Inequality Lecture. Ms Byanyima was previously Executive Director of <a href="https://www.oxfam.org/en">Oxfam International</a> and director of Gender and Development at the <a href="https://www.undp.org/about-us">UNDP</a>.</p>
<p><strong>Differences in capacity:</strong> It’s important to understand the differences in the fiscal capacities of countries in the global North and the global South to address inequality. High-income countries can ameliorate somewhat the high levels of inequality because they have high levels of taxation and significant state capacity. But this isn’t possible in much of the global South – at least not to the same extent. This generates complex social and economic challenges which require policy attention.</p>
<p><strong>Joined at the hip:</strong> This points to the need to understand that inequality within countries is inextricably linked with the forces shaping inequality between countries. The problem can’t be solved simply in one geography. Inequality between countries needs to be tackled simultaneously.</p>
<h2>What next</h2>
<p>The COVID-19 pandemic has brought into sharp relief how very differently countries are experiencing the burden of the pandemic.</p>
<p>The heaviest tolls have been exacted on the most economically marginalised countries. In South Africa, for example, job and income losses <a href="https://theconversation.com/south-africas-labour-market-trends-from-2009-to-2019-a-lost-decade-167645">have been most pronounced</a>. Low-paid workers, the young and workers in the informal economy and in service sectors <a href="https://theconversation.com/young-people-and-women-bear-the-brunt-of-south-africas-worrying-jobless-rate-167003">have borne a disproportionate burden</a> of job and income losses. Women, who make up a substantial portion of workers in the services economy, have been the hardest hit.</p>
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<strong>
Read more:
<a href="https://theconversation.com/young-people-and-women-bear-the-brunt-of-south-africas-worrying-jobless-rate-167003">Young people and women bear the brunt of South Africa's worrying jobless rate</a>
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<p>Countries in the global North have been able to protect their economies from the impact of the COVID-19 pandemic through a stimulus package of unprecedented levels. The US stimulus package has been estimated at <a href="https://www.brookings.edu/blog/up-front/2021/01/28/the-macroeconomic-implications-of-bidens-1-9-trillion-fiscal-package/">US$1.9 trillion</a>. Developing and emerging economies, on the other hand, have been thrown into <a href="https://www.imf.org/en/Publications/WEO/Issues/2021/07/27/world-economic-outlook-update-july-2021">a deep-seated economic crisis</a> due to the pandemic.</p>
<p>The COVID-19 pandemic has also <a href="https://www.who.int/news/item/22-07-2021-vaccine-inequity-undermining-global-economic-recovery">highlighted inequality</a> between countries. This is most starkly evident in the way in which access to vaccines has been determined. This is undermining the recovery in both developing and developed countries and points to the need for inequality to be tackled as a global issue, between countries and within countries.</p>
<p>For all of the excellent academic research on inequality, the COVID-19 pandemic shows us that very little has been achieved at the policy level to actually address the challenge and to move to a more equal world. If we are to do that, global policies have to address the realities of how unequal economic and social patterns are across the globe. </p>
<p>Moreover, the realities of inequality from the perspective of the global South need to inform these policy changes. If we don’t pursue such an ambitious policy agenda, the COVID-19 pandemic will be yet another shock, like the 2008 global financial crisis, that exposes the fragility and inequalities in our economic and social systems, but that we quickly forget about – that is, until the next global shock.</p>
<p><em>This article is part of a media partnership between the Southern Centre for Inequality Studies’s and The Conversation Africa for its 2021 annual Inequality Lecture, which was presented on Thursday, 30 September. You can watch the full lecture <a href="https://www.facebook.com/conversationAfrica/videos/660007621560449?_rdc=1&_rdr">here</a>.</em></p><img src="https://counter.theconversation.com/content/168897/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span> Imraan Valodia receives funding from a number of local and international organizations that support research.</span></em></p>
While inequality is a global problem, its growth is most pronounced and the political, social and economic challenges it poses are most complex and pronounced in the global South.
Imraan Valodia, Dean of the Faculty of Commerce, Law and Management, and Head of the Southern Centre for Inequality Studies, University of the Witwatersrand
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/162701
2021-06-14T15:07:59Z
2021-06-14T15:07:59Z
Millions of young South Africans are without jobs: what are the answers?
<figure><img src="https://images.theconversation.com/files/406154/original/file-20210614-66119-ddawbj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Students at the University of Cape Town in South Africa. Joblessness has hit even those with degrees.</span> <span class="attribution"><span class="source">Photo by © Louise Gubb/CORBIS SABA/Corbis via Getty Images</span></span></figcaption></figure><p>African countries are experiencing an unprecedented level of unemployment among young people. The unemployment numbers are expected to increase given the booming youth population in Africa.</p>
<p>Not only are more young people without jobs, the vast majority are employed in the informal economy. The <a href="https://www.ilo.org/global/publications/books/WCMS_626831/lang--en/index.htm">International Labour Organisation</a> puts the proportion of 15-24 year olds employed in the informal economy in the world at 95% in 2018. The proportion in sub-Saharan Africa is in the same ballpark. </p>
<p>If not arrested, this situation presents a ticking time bomb with adverse political and socioeconomic consequences.</p>
<p>The problem is particularly acute in South Africa. <a href="https://www.worldbank.org/en/country/southafrica/overview">World Bank</a> statistics show that in 2019 the youth unemployment rate in South Africa stood at 58%, which is one of the highest in sub-Saharan Africa. For <a href="http://www.statssa.gov.za/?p=13379">South Africa</a>, the unemployment numbers are expected to increase. Over 60% of the unemployed at the start of 2020 were aged 15-34.</p>
<p>The South African economy has consistently underperformed in the past decade, with growth in real GDP per capita declining since 2011. While South Africa experienced political emancipation in 1994, the population still suffers from high inequality. The country’s <a href="https://www.worldbank.org/en/country/southafrica/overview">GINI coefficient</a> stood at 0.63 in 2015 – one of the highest in the world. </p>
<p>South Africa is desperate for a more dynamic, employment intensive and innovative growth trajectory – even more so after the pandemic of COVID-19. </p>
<p>A sustainable and inclusive economic recovery that guarantees decent jobs will require an integrated response from policy makers, in partnership with the private, academic and community sectors.</p>
<p>We argue that promoting entrepreneurship has a role. But the data show that South Africa needs to step up entrepreneurship development for it to catalyse youth employment.</p>
<h2>Joblessness and education</h2>
<p>Unemployment is not limited to those with basic or lower levels of education. The trend of unemployed young people with tertiary education is also on the rise. According to the 2021 <a href="https://data.worldbank.org/indicator/SL.UEM.ADVN.ZS">World Bank World Development Indicator</a> the percentage of the labour force with an advanced level of education that is unemployed rose from 3.7% in 2007 to 14% in 2019. </p>
<p>Gone are the days when a university graduate was guaranteed a job.</p>
<p>A gender gap is also evident in the unemployment figures among people with advanced education. The unemployment rates of 2.3% in 2007 and 12% in 2019 for males with advanced education were lower than those of their female counterparts, which grew from 4.7% to 15%. </p>
<p>This status risks long-term scarring effects for young people along with increases in informal working and <a href="https://journals.sagepub.com/doi/abs/10.1177/0959680119840570">social isolation</a>.</p>
<p>Rising unemployment has a severe effect on the wellbeing of families, in terms of hunger and mental health. According to <a href="https://cramsurvey.org/wp-content/uploads/2021/05/1.-Spaull-N.-Daniels-R.-C-et-al.-2021-NIDS-CRAM-Wave-4-Synthesis-Report..pdf">research</a> done at the University of Stellenbosch, roughly one in five (18%) families reported someone going hungry at the end of 2020, compared to 14% (one in seven) in 2018. At the same time, a <a href="https://www.tandfonline.com/doi/full/10.1080/23322039.2020.1799480">recent study</a> found that a 1% increase in youth unemployment led to a 1.6%-1.8% increase in murder crimes.</p>
<p>The already dire situation has been compounded by the COVID-19 crisis with its adverse economic and labour market fallouts. According to <a href="http://www.statssa.gov.za/?p=14423">Statistics South Africa</a>, the economy is still 2.7% smaller than it was in the first quarter of 2020 before the COVID-19 pandemic started.</p>
<p>And evidence suggests that the impact is disproportionately affecting young people with many more losing their jobs, or being driven into the informal sector.</p>
<h2>Entrepreneurship</h2>
<p>Entrepreneurship has been cited as a key lever to transform local and global communities and societies. </p>
<p>We agree that entrepreneurship has a major role in promoting innovation, improving productivity and developing a business culture. And, importantly, it has the potential to create employment. </p>
<p>But data from the <a href="https://www.gemconsortium.org/">Global Entrepreneurial Monitor</a>, coordinated by the <a href="https://www.usb.ac.za/">University of Stellenbosch Business School</a>, indicate that South Africa’s <a href="https://www.gemconsortium.org/economy-profiles/south-africa">Total Early-Stage Entrepreneurial Activity</a> between 2001 and 2016 was below average compared to most other similar countries. </p>
<p><a href="https://www.style-research.eu/wp-content/uploads/2017/06/STYLE_Policy_Brief_WP7_Business_Start_ups_and_Youth_Self_Employment_FINAL.pdf">Research</a> shows that this measure has dropped below half that of the more entrepreneurial economies. </p>
<p>This suggests that South Africa isn’t doing enough. </p>
<p>A greater focus on entrepreneurship would permit the development of more enterprises to formalise many aspects of the South African economy.</p>
<p>Having said that, the evidence from across the world shows that entrepreneurs do not always create jobs. Indeed, <a href="http://www.statssa.gov.za/?p=13379">research</a> shows that many entrepreneurs are sole traders and involved in activities with limited potential to create employment. </p>
<p>Put simply, South Africa needs entrepreneurs that create jobs rather than simply setting up informal stores (known as spaza shops, which number more than <a href="https://theconversation.com/south-africas-spaza-shops-how-regulatory-avoidance-harms-informal-workers-130837">100,000</a> in the country). </p>
<p>South Africa should encourage entrepreneurship with three characteristics:</p>
<ul>
<li><p>social entrepreneurship. This is the kind that addresses issues such as inequality, healthcare, hunger and environmental sustainability. These are based on business models that create tangible economic value at scale.</p></li>
<li><p>entrepreneurship that embodies the Schumpeterian idea of <a href="https://www.youtube.com/watch?v=RQSG_d0mmf0">creative destruction</a> – developed by Austrian political economist <a href="https://www.econlib.org/library/Enc/bios/Schumpeter.html">Joseph Schumpeter</a>, the idea is that inferior solutions get replaced (partly or completely) with new products, services and business models.</p></li>
<li><p>entrepreneurship that unlocks multiplier effects for other small businesses to create employment. This would include fintech like <a href="https://www.yoco.com/za/">Yoco</a>, <a href="https://socialfintech.org/do-you-know-about-m-pesa-you-should-do/">M-PESA</a> and <a href="https://www.jumo.world/about/">JUMO</a>.</p></li>
</ul>
<p>The challenge for policy makers is to understand, develop and nurture the support that helps entrepreneurs develop. And enables them to move on to become employers and creators of jobs as well as innovating products and services.</p>
<h2>Next steps</h2>
<p>For innovative businesses to thrive, effective and supportive environments have to be created. This should include access to resources, such as capital or knowledge and a market for their innovation. </p>
<p>These supportive environments require an educational system that infuses intensive technical skill-based vocational education complemented with practical, innovative training at all levels. This would give young people the foundation, skills and mindset they need to become entrepreneurs.</p>
<p>Access to finance by youth enterprises and entrepreneurs is critical. But this needs to be tailored to their needs. Examples include loan guarantee schemes, direct loans and equity as well as structured finance. </p>
<p>There are signs of some progress. For example, the <a href="https://www.afdb.org/en">African Development Bank</a> is developing <a href="https://vimeo.com/551451857">Youth Entrepreneurship Investment Banks</a> to finance youth entrepreneurship and innovation in Africa. </p>
<p>And the South African government has introduced programmes and schemes that provide finance for enterprises including those owned by young people. These could be strengthened.</p>
<p>Mentorship for young entrepreneurs is also needed. As is the creation of incubators and innovation hubs where young entrepreneurs can experiment with business ideas and learn from others.</p>
<p>Ultimately, critical capacity development in the field of entrepreneurship is needed. For South Africa this would include capacity in research, training, and advice with the aim to boost dynamism, growth and inclusion through entrepreneurship for more members of society.</p><img src="https://counter.theconversation.com/content/162701/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>The authors do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Promoting entrepreneurship will help reduce unemployment in South Africa. But the government has to step up its game.
Mark Smith, Director & Professor, Stellenbosch University
Jako Volschenk, Senior lecturer in Strategy and Sustainability, Stellenbosch University
Meshach Aziakpono, Professor of Economics and Development Finance, Stellenbosch University
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/160673
2021-06-03T12:23:38Z
2021-06-03T12:23:38Z
The pandemic has slowed tourism to Thailand’s Buddhist temples, but the impact is more than economic
<figure><img src="https://images.theconversation.com/files/404051/original/file-20210602-19-13qultw.jpg?ixlib=rb-1.1.0&rect=70%2C0%2C4638%2C3123&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">International tourism dropped considerably to Thailand Buddhist temples as a result of the COVID-19 pandemic.</span> <span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/woman-scented-water-on-a-buddha-statue-as-they-celebrate-news-photo/1232284817?adppopup=true">Anusak Laowilas/NurPhoto via Getty Images</a></span></figcaption></figure><p>The economies of countries dependent on tourism are clearly hurting, with visitor numbers plummeting as a result of the pandemic.</p>
<p>In Thailand alone, a country where tourism accounts for <a href="https://www.reuters.com/article/us-thailand-economy-tourism-idUSKBN2BL1F7">11%-12% of the GDP</a>, the <a href="https://www.reuters.com/article/thailand-economy-tourism/thailands-december-tourist-arrivals-down-99-8-y-y-to-6500-idUSL4N2K02E7">number of international tourists dropped by 83% in 2020</a>. During December 2020 – typically a peak tourism month – the country received just over 6,000 foreign tourists – a <a href="https://www.reuters.com/article/thailand-economy-tourism/thailands-december-tourist-arrivals-down-99-8-y-y-to-6500-idUSL4N2K02E7">99.8% drop from December 2019</a>, when there were nearly 4 million foreign tourists. </p>
<p>The Thai government estimates a <a href="https://www.researchgate.net/publication/348757926_COVID-19_Pandemic_-A_Testing_Time_for_Tourism_and_Hospitality_in_Thailand">loss of 100 billion</a> Thai baht (over US$3 billion) in the first quarter of 2020 and a loss of about <a href="https://www.reuters.com/article/us-thailand-economy-tourism-idUSKBN2BL1F7">1.45 million jobs</a> as a result of this slump in tourism. </p>
<p>However, the actual loss cannot be captured in these numbers alone. Many cross-cultural exchange opportunities have been lost as well. </p>
<p>I spent much of the previous decade living in Chiang Mai, a medium-sized city in northern Thailand, <a href="https://www.scmp.com/lifestyle/travel-leisure/article/3121542/worlds-friendliest-city-chiang-mai-suffering-covid-19">which relies heavily on tourism</a>. As a scholar who was studying the <a href="https://www.rhodes.edu/bio/brooke-schedneck">relationship between tourism and Buddhist temples</a> in the region before the pandemic started, I am able to assess the impact of COVID-19 on these sites of religious importance. </p>
<p>Some Buddhist temples that relied heavily on donations from foreign tourists are now <a href="https://www.bangkokpost.com/thailand/general/1928600/a-return-to-the-old-ways">struggling to outlast the pandemic</a>. Additionally, small businesses around temples have been badly hurt, as is the knowledge exchange with international visitors.</p>
<h2>Temples and tourism</h2>
<p>Before the pandemic, Wat Phra Chetuphon, known more commonly as Wat Pho and one of the most-visited temples in Bangkok, would receive about <a href="https://www.prachachat.net/d-life/news-601305">6,000-10,000 tourists per day</a>. Foreign tourists pay an entry fee of 200 baht, or $6.40, while Thai people enter free of charge. </p>
<p>In an <a href="https://www.prachachat.net/d-life/news-601305">interview</a> in January 2021 with Thai news outlet Prachachat, the assistant abbot of Wat Pho stated that the temple can weather this period without tourists for now, but not for much longer. With donations from Thai people, they were able to pay basic expenses of water and electricity and employ cleaning and security staff. But without the foreign tourist fees, it would become difficult to meet the <a href="https://www.prachachat.net/d-life/news-601305">monthly budget of about $96,000</a>.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/404053/original/file-20210602-21-eacca3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="Visitors enjoy the magnificent views of Wat Phra Kaew, temple of the emerald buddha, which is situated in Bangkok's Grand Palace" src="https://images.theconversation.com/files/404053/original/file-20210602-21-eacca3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/404053/original/file-20210602-21-eacca3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=392&fit=crop&dpr=1 600w, https://images.theconversation.com/files/404053/original/file-20210602-21-eacca3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=392&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/404053/original/file-20210602-21-eacca3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=392&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/404053/original/file-20210602-21-eacca3.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=492&fit=crop&dpr=1 754w, https://images.theconversation.com/files/404053/original/file-20210602-21-eacca3.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=492&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/404053/original/file-20210602-21-eacca3.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=492&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">The Wat Phra Kaew, or the Temple of the Emerald Buddha, in Bangkok’s Grand Palace, which typically attracts visitors from all over the world, has seen fewer visitors because of COVID-19.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/visitors-enjoy-the-magnificent-views-of-wat-phra-kaeo-news-photo/174707639?adppopup=true">Ben Davies/LightRocket via Getty Images</a></span>
</figcaption>
</figure>
<p>Foreign visitor numbers are also scarce in the most famous temple in Bangkok, Wat Phra Kaew, or the Temple of the Emerald Buddha. This temple is part of the Grand Palace, the Thai royal family’s former residence. In 2016, the Grand Palace was named one of the world’s <a href="https://www.tatnews.org/2016/06/bangkoks-iconic-grand-palace-makes-worlds-50-most-visited-tourist-attractions-list/">50 most-visited tourist attractions</a> in the world by Travel + Leisure magazine, with over 8 million visitors per year. </p>
<p>Typically, the high tourist season would see a long line for entry and crowds of people inside, with foreigners paying $16 for entrance to the temple and the Grand Palace. Again, there is no entrance fee for Thai citizens. </p>
<p>Losses have been significant, for members of the monastic community and small businesses that thrive near these famous temple complexes. Many vendors who sell water, street food and souvenirs around the temple have <a href="https://www.bangkokpost.com/thailand/general/2052015/river-kwai-bridge-vendors-bemoan-lack-of-tourists">lost their incomes</a>. Many of these people work within Thailand’s informal economy. A 2018 survey found <a href="https://www.bot.or.th/Thai/MonetaryPolicy/ArticleAndResearch/FAQ/FAQ_156.pdf">55.3% of Thailand’s total population</a> found employment through this informal economy.</p>
<h2>Cultural exchange</h2>
<p>Much of the the loss of the engagement between foreign tourists and the monastic community cannot be measured in monetary terms. <a href="https://uwapress.uw.edu/book/9780295748924/religious-tourism-in-northern-thailand/">My recent book</a> highlights the energy and effort student monks put into creating programs for foreign tourists to learn about their religion, many aimed at travelers or student groups on college or gap-year programs.</p>
<p><a href="https://uwapress.uw.edu/book/9780295748924/religious-tourism-in-northern-thailand/">In my research</a>, I have found these cultural exchange programs to be beneficial for tourists and the goals of Buddhist monasticism. Several <a href="https://www.google.com/books/edition/Volunteer_Tourism/Pb2XCwAAQBAJ?hl=en&gbpv=1&dq=Mary+Mostafanezhad&pg=PT5&printsec=frontcover">visitors volunteer while traveling</a> in developing or underdeveloped nations to provide support to those in need. At the same time, these volunteer tourists immerse themselves in different cultures, religions and ways of life.</p>
<p>In Thailand, volunteer tourists typically teach English and could also live in a temple for several months. In my interviews, these tourists said that the experience enabled them to learn about themselves, reflect on their own values and consider <a href="https://www.berghahnjournals.com/view/journals/journeys/18/1/jys180103.xml">new ideas for how to live a happy life</a>. </p>
<p>Buddhist monks see it as <a href="https://www.jstor.org/stable/41308138?seq=1">their duty to spread their teachings</a> to all who are curious. One program, called <a href="http://www.monkchat.net/web2020/index.php">Monk Chat</a>, which is hosted by the Buddhist temple Wat Suan Dok and the MahaChulalongkorn Buddhist University, facilitates <a href="https://doi.org/10.1017/S0026749X16001013">one-on-one and small-group conversations</a> between monks and foreign travelers in English.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/404114/original/file-20210602-21-1hxeerw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="A group of monks talking with foreign tourists." src="https://images.theconversation.com/files/404114/original/file-20210602-21-1hxeerw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/404114/original/file-20210602-21-1hxeerw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=369&fit=crop&dpr=1 600w, https://images.theconversation.com/files/404114/original/file-20210602-21-1hxeerw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=369&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/404114/original/file-20210602-21-1hxeerw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=369&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/404114/original/file-20210602-21-1hxeerw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=463&fit=crop&dpr=1 754w, https://images.theconversation.com/files/404114/original/file-20210602-21-1hxeerw.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=463&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/404114/original/file-20210602-21-1hxeerw.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=463&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Monk Chat program hosts group conversations as well as one-on-one conversations with foreign tourists at the Buddhist temple Wat Suan Dok in June 2018.</span>
<span class="attribution"><span class="source">Brooke Schedneck</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span>
</figcaption>
</figure>
<p>Monks who participate in these programs say that they often develop new ways of thinking based on their discussions with foreigners – from becoming more accepting of cultural differences to being pushed to think deeply about the monastic lifestyle. </p>
<p>For example, when I asked, “How have you changed as a result of meeting foreign tourists?” <a href="https://uwapress.uw.edu/book/9780295748924/religious-tourism-in-northern-thailand/">one monk replied</a> that he used to just accept the monastic rules and practices without considering their purpose. However, after tourists asked why he shaved his head and wore yellow robes, he considered the ways that his lack of hair and uniform were part of a simple lifestyle. He understood more deeply that monks must give up such expressions of individuality as hairstyle and fashion preferences. </p>
<p>Because of the pandemic, Monk Chat has switched to an online outreach. Since April 2020, <a href="https://www.facebook.com/MonkChatCNX/">MonkChat Live</a> is streamed almost every week via Facebook, where various guests, usually monks, prepare some reflections on a specific topic related to Buddhism in the modern world, such as life lessons from COVID-19. </p>
<p>Facebook Live is a good alternative for now, but it does not have the same impact as talking directly with foreigners. The format is more formal, with little chance for personal sharing or observing the playful ways monks interact with one another. </p>
<p>It is difficult to measure these losses, but undoubtedly they will leave a deep impact for some time to come.</p><img src="https://counter.theconversation.com/content/160673/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Brooke Schedneck does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Thailand’s Buddhist temples, important centers of culture and commerce, rely on donations from international visitors. Because of a steep drop in tourism, these temples have been hit hard.
Brooke Schedneck, Assistant Professor of Religious Studies, Rhodes College
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/159288
2021-05-04T14:16:02Z
2021-05-04T14:16:02Z
How COVID-19 is likely to slow down a decade of youth development in Africa
<figure><img src="https://images.theconversation.com/files/398392/original/file-20210503-15-cv964h.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Unemployed Liberian young men seeking daily jobs at the industrial district of Bushrod Island, Monrovia, Liberia.
</span> <span class="attribution"><span class="source">EFE-EPA/Ahmed Jallanzo</span></span></figcaption></figure><p>World Youth SkillsUntil COVID-19 hit, the quality of life of youth (age 15-24) in sub-Saharan Africa had been steadily improving. According to the <a href="https://databank.worldbank.org/source/world-development-indicators">World Bank</a>, by 2019 the youth literacy rate stood at 73%. Gross secondary school enrolment rates increased from 13 % in 1971 to 43 % by 2018. Youth unemployment rates have remained fairly stable, at around 9%, even below the world average of 13.6%.</p>
<p>Across sub-Saharan Africa, extreme poverty among young workers declined from 60% in 1999 to 42% in 2019. Moreover, the youth literacy <a href="https://data.worldbank.org/indicator/SE.ADT.1524.LT.FM.ZS">gender parity index</a>, measuring the ratio of females to males ages 15-24 who can both read and write, has improved significantly, reaching 93% in 2019. And for this first time, the unemployment rate of young women are similar to that of young men (9.4%). </p>
<p>As an economist interested in entrepreneurship and technological innovation, I recently contributed to UN’s <a href="https://www.un.org/development/desa/youth/world-youth-report/wyr2020.html">2020 World Youth Report</a>. In particular, chapter 4 of the report concerns how the youth can leverage new digital technologies for social entrepreneurship to advance sustainable development. Though written before the COVID-19 pandemic, the message may have become even more urgent. This, because COVID-19 may slow down or even reverse the positive trends in youth development noted. </p>
<p>There are fears that the pandemic will result in a <a href="https://www.ilo.org/wcmsp5/groups/public/@dgreports/@dcomm/documents/briefingnote/wcms_745963.pdf">lockdown generation</a>, characterised by structurally higher youth poverty and unemployment.</p>
<p>Lockdowns, by slowing down the spread of the disease, generate <a href="https://www.minneapolisfed.org/research/staff-reports/health-versus-wealth-on-the-distributional-effects-of-controlling-a-pandemic">benefits</a> that “accrue disproportionately to older households”. But, the <a href="https://www.minneapolisfed.org/research/staff-reports/health-versus-wealth-on-the-distributional-effects-of-controlling-a-pandemic">costs</a> of reduced economic activity are disproportionately born by younger households. They bear the “brunt of lower employment”.</p>
<h2>Reinforcing inequalities</h2>
<p>Younger people, especially young women, are more intensively employed in sectors such as hospitality and entertainment. About 80% of youth jobs in sub-Saharan Africa are in the <a href="https://www.un.org/youthenvoy/2014/01/africas-youth-employment-challenge-addressed-by-new-un-report/">informal sector</a>. These sectors – hospitality, entertainment and informal - have been among the worst affected.</p>
<p>Lockdowns also interrupt schooling and education. In one <a href="https://www.worldbank.org/en/topic/education/publication/simulating-potential-impacts-of-covid-19-school-closures-learning-outcomes-a-set-of-global-estimates">calculation</a>, this could generate global future “learning losses with a present value of $10 trillion”.</p>
<p>The closure of schools will reinforce social and economic inequalities and exclusion. Youth from more well-off households may be less affected, for instance in having access to private internet and laptops. </p>
<p>While these impacts are troubling everywhere, in Africa they are magnified due to the high rate (21%) of youths who were already not in employment, education or training before the pandemic struck. The <a href="https://sdgs.un.org/goals/goal8">8th sustainable development goal</a> requires of all countries that, by 2020, they substantially reduce this rate.</p>
<p>Given the complications introduced by the pandemic, how can this development goal be best achieved?</p>
<h2>Youth entrepreneurship</h2>
<p>With formal employment growth sluggish at the best, countries are pinning their hopes on <a href="https://www.piie.com/blogs/realtime-economic-issues-watch/startups-boom-united-states-during-covid-19">entrepreneurship</a>. But, entrepreneurship support policy remains a notoriously <a href="https://link.springer.com/article/10.1007/s11187-016-9712-2">complex</a> topic. This is especially true when it comes to young people. </p>
<p>Younger entrepreneurs are on average more likely to fail, and older entrepreneurs’ firms on average perform <a href="https://www.aeaweb.org/articles?id=10.1257/aeri.20180582">better</a>. This is often due to market failures. Banks do not have information about the quality of younger entrepreneurs (who often lack collateral). In education, meanwhile, the market will under-supply in the absence of subsidies.</p>
<p>Where these market failures are prevalent, the youth may fail to obtain finance for their ventures or accumulate enough skills. Supporting youth entrepreneurship would, therefore, require not policies to focus exclusively on entrepreneurship <em>per se</em>, but to fix market failures elsewhere in the system. </p>
<p>The benefits of catalysing youth entrepreneurship could be huge in Africa. With the world’s <a href="https://www.un.org/africarenewal/magazine/may-2013/africa%E2%80%99s-youth-%22ticking-time-bomb%22-or-opportunity">youngest</a> population at a time of unprecedented innovations in <a href="https://www.amazon.com/Machine-Platform-Crowd-Harnessing-Digital/dp/1543615791">digital technologies</a> across the world, the African continent has a unique opportunity. It has two key advantages: digital savvy and a willingness to take risks. </p>
<p>Young people may have a <a href="https://www.ilo.org/wcmsp5/groups/public/---dgreports/---dcomm/---publ/documents/publication/wcms_737648.pdf">comparative</a> advantage in adopting and using new digital technologies. Moreover, many African countries have not only <a href="https://www.forbes.com/sites/francoisbotha/2019/04/02/why-africa-has-the-ability-to-leapfrog-the-rest-of-the-world-with-innovation/?sh=4b9e470a5ece">leapfrogged</a> in the adoption of mobile communication tech, but have been experiencing an <a href="https://theconversation.com/african-countries-cant-industrialise-yes-they-can-125516">upsurge</a> in tech entrepreneurship. </p>
<p>There is a deep underlying entrepreneurial reservoir in Africa. As much as 80% of youth labour market participation is in <a href="https://www.sciencedirect.com/science/article/pii/S0306919216303876">household enterprises</a> or as self-employed activities; only 20% in standard wage employment. </p>
<h2>Digital entrepreneurial ecosystems</h2>
<p>Youthfulness itself should not be a serious liability for entrepreneurship anymore. </p>
<p>Given the scarcity of resources on the continent, turning potential into reality and best addressing the market failures mentioned will require countries to prioritise investment in, and regulation of, their <a href="https://link.springer.com/article/10.1007/s11187-017-9867-5">digital entrepreneurial ecosystems</a>. </p>
<p>It will require redoubling efforts to expand access to new digital technology and infrastructure, including the data needed on which to build new products and services. It will also require investing in information and communications technology skills – fixing market failures in provision of public goods and education. </p>
<p>Increasing digital absorption in this way will pay good dividends. As I argued in chapter 4 of the UN’s <a href="https://www.un.org/development/desa/youth/world-youth-report/wyr2020.html">2020 World Youth Report</a>: consider for instance, that countries that do better to absorb digital technologies also tend to have a lower share of youths not in employment, education or training.</p>
<p>The direction of causality between digital adoption and utilisation of the youth is likely bi-directional. Better adoption of digital technologies is likely to engage the youth in either learning, education or employment. Better engagement of the youth is likely to lead to faster adoption of digital technologies – propelling a virtuous cycle. </p>
<p>With the COVID-19 pandemic threatening to halt a decade of progress in youth development in Africa, at a minimum a three-pronged approach is now urgent. This entails bridging the digital divide; investing more in youth education in information and communications technology and science, engineering and mathematics fields. It also requires building digital entrepreneurial ecosystems.</p><img src="https://counter.theconversation.com/content/159288/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Wim Naudé does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Since 1999, extreme poverty has declined while rates of young people in education and employment have risen. Without investment though, the impact of the pandemic could see this progress imperilled,
Wim Naudé, Professor of Economics, University College Cork
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/143008
2020-10-11T09:06:36Z
2020-10-11T09:06:36Z
Fixing South Africa’s minibus taxi industry is proving hard: tracing its history shows why
<figure><img src="https://images.theconversation.com/files/355351/original/file-20200828-14-64tavb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">A policeman stands guard during a protest by minibus taxi operators against a new bus service for Johannnesburg.
</span> <span class="attribution"><span class="source">Alexander Joe/AFP via Getty Images</span></span></figcaption></figure><p>The South African government has initiated a process to formalise and regulate the country’s large, yet informal minibus taxi industry, with a view to making it <a href="https://www.gov.za/speeches/minister-fikile-mbalula-addresses-launch-taxi-lekgotla-public-discourse-platform-20-aug">viable and free of violence</a>. </p>
<p>The government envisions the industry being restructured “along legally recognised business units” that pay corporate tax and comply with labour laws. Formalisation will eventually pave the way for taxi commuters to benefit from public transport subsidies, resulting in cheaper fares.</p>
<p>According to <a href="https://www.gov.za/speeches/transport-release-discussion-documents-taxi-lekgotla-11-sep-2020-0000">Transport Minister Fikile Mbalula</a></p>
<blockquote>
<p>Training of operators and taxi workers across the value chain should be an integral part of the industry development and skilling programme. </p>
</blockquote>
<p>The effort, if it succeeds, will resolve the anomaly whereby the government relies on the informal transport sector to provide <a href="https://theconversation.com/south-africas-minibus-taxi-industry-has-been-marginalised-for-too-long-this-must-change-142060">a key public transport service</a>. Minibus taxis are the preferred mode of transport for most South Africans because they are more efficient and more widely available than buses and trains.</p>
<p>Having <a href="http://www.scholink.org/ojs/index.php/wjssr/article/view/2194">studied</a> the various approaches to the industry over the decades, I believe its integration into the country’s public transport plans is long overdue.</p>
<p>It will also bring to an end the industry’s long struggle for economic justice. The following overview provides just a glimpse of the key moments in the history of the industry’s development and struggle for recognition. It is by no means comprehensive. </p>
<h2>Historical overview</h2>
<p>The minibus taxi industry in South Africa was <a href="https://pdfs.semanticscholar.org/6e6b/192ced49cd9f2e0a0d3dbb1c039aa8449639.pdf?_ga=2.156824443.1117060481.1595075748-240641775.1595075748">established by black people</a> and continues to serve mostly that community.</p>
<p>As far as I could establish, the industry traces its origins back to the 1930s, when five-seater sedan cars were used. Then regulation stipulated that taxis could <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---ifp_seed/documents/publication/wcms_117698.pdf">carry four passengers</a>.</p>
<p>The black taxi industry’s battles mirror those of black people against racial oppression and economic exclusion. </p>
<p>Black people were considered temporary residents in the country’s urban areas, and to “belong” instead to ethnically defined, mostly rural areas called <a href="https://www.sahistory.org.za/article/homelands">bantustans</a>. These were characterised by extreme underdevelopment and poverty. </p>
<p>Blacks were not allowed to live and trade in urban areas unless they qualified for urban rights under the <a href="https://omalley.nelsonmandela.org/omalley/index.php/site/q/03lv01538/04lv01646/05lv01810.htm">Urban Areas Act of 1945</a>. Being in urban areas legally was made even more difficult by the <a href="https://www.sahistory.org.za/article/pass-laws-south-africa-1800-1994">“pass law”</a>, introduced under apartheid in 1952. It was compulsory for black people to carry identity documents – called passes – that controlled their movements in urban areas. </p>
<p>The early taxi operators used sedan cars and only for trips within black communities. Minibus taxis operated illegally, as public carrier permits were difficult to obtain. At the same time, bus and rail transport was regulated and subsidised, but inefficient.</p>
<p>Black people were only allowed to be involved in one business. Companies and partnerships were prohibited, as were black financial institutions, industries and wholesale concerns.</p>
<p>This changed in the late 1970s when black people were allowed to establish small businesses. Further relief for taxi operators came through the Breda Commission of Inquiry into transport deregulation in 1977. This led to the Road Transportation Act of 1977, which <a href="http://www.qualitativesociologyreview.org/ENG/Volume47/QSR_14_4_Matebesi.pdf">recommended</a> freer competition and less regulation of the industry, making it easier for black people to enter the transport industry.</p>
<p>Its <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---ifp_seed/documents/publication/wcms_117698.pdf">definition</a> of a bus opened the way for taxi operators to introduce <a href="https://www.longdom.org/articles/exploring-the-minibus-taxi-as-a-means-to-improving-public-transportation-in-south-africa.pdf">ten-seater vehicles</a>. This made the industry more profitable, attracting many new entrants and creating strong growth.</p>
<p>But there were still barriers. The operators were limited to only one vehicle each, in keeping with <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---ifp_seed/documents/publication/wcms_117698.pdf">policies</a> designed to exclude the majority black population from playing a meaningful role in the economy.</p>
<h2>Deregulation</h2>
<p>The demand for minibus taxi transport far outstripped supply. As too few taxi permits were being issued, the number of taxis operating without permits ballooned as operators sought to satisfy the growing demand. </p>
<p>The government established the Welgemoed Commission in 1983 <a href="https://www.aridareas.co.za/wp-content/uploads/2015/Papers/Ingle%20M%20-%20An%20historical%20overview%20of%20problems%20associated%20with%20the%20formalization.pdf">to study the industry</a>. It recommended that no more permits to operate taxis should be granted.<br>
Even more taxis then operated largely illegally. Taxi operators were subjected to fines, and often had their vehicles impounded and forfeited to the state. Despite the limitations, the demand for taxi services continued to grow fast. Competition over routes grew and often became violent.</p>
<p>Eventually, the <a href="https://www.gov.za/documents/transport-deregulation-act-18-may-2015-1306">Transport Deregulation Act of 1988</a>, in conjunction with the <a href="https://www.gov.za/documents/national-transport-policy-white-paper">White Paper on Transport Policy</a>, tabled in January 1987, eased restrictions. The government decided to let market forces prevail. Any applicant who wanted to enter the industry was granted a <a href="https://www.ilo.org/wcmsp5/groups/public/---ed_emp/---emp_ent/---ifp_seed/documents/publication/wcms_117698.pdf">permit to operate a minibus taxi</a>. </p>
<p>The industry kept growing. Profits were <a href="https://repository.up.ac.za/bitstream/handle/2263/26930/00dissertation.pdf?sequence=1&isAllowed=y">reinvested</a> to buy new taxi fleets. Thus, the minibus taxi industry was one of the first in which black people could accumulate capital and gain economic power. </p>
<p>Minibus taxis have special significance as a black-owned industry which <a href="https://www.researchgate.net/publication/301276127_A_VIOLENT_LEGACY_The_taxi_industry_and_government_at_loggerheads">survived apartheid laws and without any subsidies</a> to provide an essential service for <a href="https://core.ac.uk/download/pdf/145050556.pdf">black people</a>. </p>
<h2>Delayed formalisation</h2>
<p>After apartheid, from April 1994, efforts were made to bring the industry under some form of regulation and to formalise its operations. </p>
<p>The democratic government established the <a href="https://repository.up.ac.za/bitstream/handle/2263/26930/00dissertation.pdf?sequence=1&isAllowed=y">National Taxi Task Team</a> in 1995 to look for ways to improve safety and profitability and end violent conflicts over routes. The task team recommended that the industry be regulated and formalised. </p>
<p>The state failed due to the lack of willingness to implement the recommendations (and refusal from the industry to be formalised). It continued to support only the formalised bus and train services.</p>
<p>In 1999, the government took another shot at formalising the industry. It introduced the <a href="http://www.qualitativesociologyreview.org/ENG/Volume47/QSR_14_4_Matebesi.pdf">Taxi Recapitalisation Programme</a> to remove old, unsafe minibuses and replace them with safer ones. </p>
<hr>
<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/south-africas-minibus-taxi-industry-has-been-marginalised-for-too-long-this-must-change-142060">South Africa's minibus taxi industry has been marginalised for too long. This must change</a>
</strong>
</em>
</p>
<hr>
<p>The government envisioned a <a href="https://repository.up.ac.za/bitstream/handle/2263/26930/00dissertation.pdf?sequence=1&isAllowed=y">new, regulated taxi industry</a>, using larger 18-seater and 35-seater diesel powered vehicles. The old, smaller taxis were to be phased out to reduce the number of vehicles on the road and improve safety. Operators who agreed to scrap their old taxis were paid R50,000 for each, to buy a new, compliant one.</p>
<p>The programme was revised in 2019 and the scrapping allowance was <a href="https://www.gov.za/speeches/minister-blade-nzimande-revised-taxi-recapitalisation-programme-26-apr-2019-0000?gclid=EAIaIQobChMIuJ7nz_fW6gIVFODtCh3CnQueEAAYASAAEgJU1fD_BwE">increased</a>. </p>
<p>But only 72,690 old vehicles had been scrapped by the end of September 2018, in the 12 years since 2006, against a readjusted target of 135,894. </p>
<h2>Shaping a future industry</h2>
<p>The minibus taxi industry plays an important role in the economy of the country. Besides being the preferred transport mode for most commuters, it’s also a <a href="https://theconversation.com/south-africas-minibus-taxi-industry-has-been-marginalised-for-too-long-this-must-change-142060">significant contributor to tax revenue and employment</a>.</p>
<p>Equally importantly, it is one sector of the economy that is dominated by the black community, which was marginalised during colonialism and apartheid.</p>
<p>It is vital that the latest move by government towards formalisation results in an industry that is safe, reliable and viable so that it can keep contributing to the country’s economy. But the history of imposing unreasonable rules tells us that for this to succeed, the industry must be included in planning the route to its own future.</p><img src="https://counter.theconversation.com/content/143008/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Siyabulela Christopher Fobosi receives funding from the National Research Foundation. </span></em></p>
It is vital that the latest move by government towards restructuring succeeds in making the industry safe, reliable and viable, contributing to the country’s economy.
Dr Siyabulela Christopher Fobosi, Senior Researcher, UNESCO 'Oliver Tambo' Chair of Human Rights, University of Fort Hare, University of Fort Hare
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/144582
2020-08-30T08:31:34Z
2020-08-30T08:31:34Z
Kenya’s urban poor are being exploited by informal water markets
<figure><img src="https://images.theconversation.com/files/353178/original/file-20200817-22-1lxhw5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Residents of Kibera slum carry jerrycans to fill them with water from a bowser. </span> <span class="attribution"><span class="source">Gordwin Odhiambo/AFP via Getty Images</span></span></figcaption></figure><p>Informal urban water markets – as opposed to piped water – have <a href="https://pubs.iied.org/pdfs/10529IIED.pdf">long supported</a> many of Kenya’s urban areas. Those that use them are either unserved, or inadequately served, by public utilities. </p>
<p>A large number of people depend on them as only about <a href="http://extwprlegs1.fao.org/docs/pdf/ken180685.pdf">20%</a> of the Nairobi residents who live in low income areas have piped water. The rest depend on uncovered wells, rivers, open springs and informal water markets. </p>
<p>There are different types of informal water markets. Some sell water legally, some illegally. There are also different ways in which people buy water. If they have water storage facilities, and live in an area accessible to water vendors, water can be bought in bulk from vendors who source it from private boreholes. </p>
<p>But most people won’t have storage facilities and will usually buy water from water vendors and carry it home. These water vendors get their supplies from a variety of sources including; rivers, wells, households with connections, communal standpipes and water ATMs. Water ATMs, installed by NGOs, <a href="https://www.bbc.com/news/world-africa-33223922">provide users with</a> cheap, clean water on demand. They swipe a smart-card and collect.</p>
<p>Water vendors also sometimes get water illegally by cutting through municipal piped networks. </p>
<p>In a <a href="https://www.tandfonline.com/doi/full/10.1080/02508060.2020.1768022?needAccess=true">recent study</a> I looked at how informal water markets operate and how they serve the urban poor. My research focused on Mathare, a large informal settlement in Nairobi. About <a href="https://kenya.opendataforafrica.org/msdpnbc/2019-kenya-population-and-housing-census-population-by-county-and-sub-county?county=1003940-mathare">206,000 people</a> live there.</p>
<p>I found that – despite high water prices (in comparison to water sold in standpipes and water ATMs), poor quality and inconvenience – the urban poor continued to buy water from private vendors because it’s still their best option. The other options were either too unreliable or hard to reach.</p>
<p>Nairobi’s county government is taking steps to formalise informal water vendors as a way of providing more people with water. Though urban informal water markets have the potential to deliver water to the unserved poor, they can also trap the poor in highly unjust water delivery arrangements. More must be done to prevent this from happening.</p>
<h2>Last, better option</h2>
<p>Mathare is characterised by unsafe and overcrowded housing. Most people live in shacks made of corrugated iron and lack access to essential services, such as sanitation and electricity. Around <a href="https://static1.squarespace.com/static/58d4504db8a79b27eb388c91/t/58e6a6991b10e38c7e857581/1491510980376/Mathare_Zonal_Plan_25_06_2012_low_res.pdf">90%</a> of residents do not have piped water. </p>
<p>I conducted interviews, surveys and focus group discussions with 258 households and 20 water vendors in Mathare in 2016 and 2017. I also interviewed six key government officials.</p>
<p>More than half of the residents from my survey accessed water from informal water vendors. And about 36% households depended exclusively on them. </p>
<p>But the quality of water was inconsistent. Residents I interviewed said they sometimes found debris in the water, or that it sometimes tasted bad. This could be because when vendors illegally cut municipality pipes, the water becomes contaminated. </p>
<h2>High prices</h2>
<p>The water vendors’ prices also fluctuated. They ranged from Ksh2 (US$0.02) to Ksh50 (US$0.50) per 20 litres depending on where the clients lived and the availability of alternative sources of water. During periods of drought, when their water supplies might run dry, vendors would recoup costs by driving up prices. </p>
<p>In some cases, high prices were artificially created. Water vendors sometimes cut municipal pipes to create artificial shortages or colluded with cartels <a href="https://static1.squarespace.com/static/58d4504db8a79b27eb388c91/t/58e6a6991b10e38c7e857581/1491510980376/Mathare_Zonal_Plan_25_06_2012_low_res.pdf">who controlled</a> community yard taps. </p>
<p>The vendors also had erratic schedules. People would sometimes be late for work or miss work and forgo their daily wages to buy water. </p>
<p>While some clients reported having strong bonds with their vendors, the majority said they were rude and inconsiderate. </p>
<p>Differential treatment among different clients belonging to a particular tribe or of a particular economic status was another major bone of contention. Nevertheless, the customers were fearful about questioning the vendors. </p>
<h2>Last option</h2>
<p>There were several reasons why, despite these issues, people opted to use water vendors.</p>
<p>Water ATMs, though cheapest (about US$0.50 for 20 litres of water), were very few in number and located around the main road of the slum. It’s very difficult to carry heavy water over the undulating slum terrain. The ATM tanks <a href="http://www.ewra.net/wuj/pdf/WUJ_2019_22_01.pdf">were also often</a> empty, making them an unpredictable and unreliable supply source. As for the standpipes, they operated only twice or three times a week but with no fixed timing or price. </p>
<p>And, even if in-house municipality connections are available, many poor households cannot afford the initial set-up cost. A new connection fee <a href="https://www.nairobiwater.co.ke/index.php/en/watertariffs">can vary</a> between Ksh2500 (about US$25) and Ksh15000 (about US$150). The average household income in Mathare is <a href="https://knowyourcity.info/wp-content/uploads/2015/04/Mathare_Zonal_Plan_25_06_2012_low_res-2.pdf">less</a> than US$3 a day. </p>
<p>Water vendors are a last option but residents depend on them. They’re more easily accessible and give people more control over their daily costs. For instance, people may use Mathare river to wash clothes or flush toilets, and buy water just for drinking and cooking.</p>
<h2>Policy implications</h2>
<p>The main reason for the growth of the informal water market is government failure to deliver adequate public services. To address the deficit, private vendors are gradually <a href="https://iwaponline.com/wp/article-abstract/21/5/1034/69738/Can-shared-standpipes-fulfil-the-Sustainable?redirectedFrom=fulltext">being regulated</a>. Kenyan municipalities <a href="http://waterfund.go.ke/watersource/Downloads/National%20Water%20Services%20Strategy%20Draft.pdf">have asked</a> authorised private water providers to make supply arrangements in informal settlements a compulsory prerequisite for licence renewals. </p>
<p>But more must be done to prevent corruption and the creation of cartels.
Vendors must also develop their strength through association and business training to help them lobby and defend their rights. Creating a union will also create rules for water transactions and prices. </p>
<p>Finally, when providing licences, the government should demarcate the areas where vendors operate to reduce conflict between vendors. This will also make it easier for utility officers to monitor their prices and modes of water transactions.</p><img src="https://counter.theconversation.com/content/144582/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Anindita Sarkar does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
Despite high prices, poor quality and inconvenience, Kenya’s urban poor continued to buy water from private vendors because it’s still their best option.
Anindita Sarkar, Associate professor, University of Delhi
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/141675
2020-07-08T12:14:10Z
2020-07-08T12:14:10Z
Street vendors make cities livelier, safer and fairer – here’s why they belong on the post-COVID-19 urban scene
<figure><img src="https://images.theconversation.com/files/345842/original/file-20200706-3953-1ijm9ge.jpeg?ixlib=rb-1.1.0&rect=0%2C0%2C3094%2C2208&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Street vending at Eastern Market, Washington, D.C. </span> <span class="attribution"><span class="source">John Rennie Short</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span></figcaption></figure><p><em>Leer <a href="https://theconversation.com/la-venta-callejera-hace-mas-vivas-seguras-y-justas-las-ciudades-por-eso-pertenece-a-la-escena-urbana-post-covid-19-143869">en español</a></em></p>
<p>Cities around the world are emerging from pandemic shutdowns and gradually allowing activities to resume. National leaders are keen to promote economic recovery, with appropriate public health precautions. </p>
<p>Recently, Chinese Premier Li Keqiang announced economic growth plans that included creating 9 million new jobs and reducing urban unemployment to less than 5.5%. One surprise was his emphasis on <a href="https://qz.com/1865144/beijing-counts-on-street-vendors-to-revive-economy/">street vending</a>. After decades of <a href="https://www.washingtonpost.com/world/asia_pacific/in-china-anger-grows-over-abuse-of-street-vendors/2013/03/31/b9728ed6-984c-11e2-b68f-dc5c4b47e519_story.html">trying to clear city streets of vendors</a>, the Chinese state is now embracing them as a <a href="https://www.theguardian.com/world/2020/jun/12/chinas-lifeblood-street-hawkers-make-surprise-return-to-fire-up-ailing-economy">new source of employment and economic growth</a>. </p>
<p>I study <a href="https://scholar.google.com/citations?user=oMPNYhQAAAAJ&hl=en">urban policy</a> and have researched the “informal economy” – activities that are not protected, regulated or often socially valued, including street vending. <a href="https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_627189/lang--en/index.htm#:%7E:text=employed%20population%20...-,More%20than%2060%20per%20cent%20of%20the%20world's%20employed%20population,work%20and%20decent%20working%20conditions.">More than 2 billion people worldwide</a> – over half the planet’s employed population – work in the informal economy, mainly in developing countries. In my view, encouraging street vending as part of COVID-19 recovery makes sense for many reasons.</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/RubX0sIYQsI?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Street vendors often face official harassment. Days after Chinese Premier Li Kequiang praised street vendors for generating jobs, Beijing officials forced these vendors to disperse.</span></figcaption>
</figure>
<h2>A long tradition</h2>
<p>Hawkers selling almost everything – food, books, household goods, clothes – used to be a common element of U.S. city life. The first pushcart in New York City appeared on Hester Street in 1886. By 1900 there were <a href="https://www.eldridgestreet.org/history/pushcarts-the-hustle-to-the-american-dream/">25,000 pushcart vendors</a> in the city selling everything from eyewear to mushrooms. </p>
<p>Street vending was a low-cost entry job for recent immigrants. It served as the vital first rung on the ladder of success and still performs this role in <a href="https://www.ucpress.edu/book/9780520319851/fruteros">many U.S. cities</a>. </p>
<p>[<em>Deep knowledge, daily.</em> <a href="https://theconversation.com/us/newsletters/the-daily-3?utm_source=TCUS&utm_medium=inline-link&utm_campaign=newsletter-text&utm_content=deepknowledge">Sign up for The Conversation’s newsletter</a>.]</p>
<p>But in New York and elsewhere, urban reformers viewed street vendors as nuisances and public health hazards, and tried to <a href="https://doi.org/10.1177/0956247816653898">evict them or move them to marginal sites</a>. Shopkeepers often complained of <a href="https://patch.com/new-york/prospectheights/grocery-fight-pits-store-owners-against-street-vendors">unwanted competition</a>. The wealthy looked down on hawkers for being poor, foreign or both. As urban public spaces were regulated and configured to clear the streets of vendors, large-scale retail capitalism came to dominate the shopping experience. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/346167/original/file-20200707-194405-15noy92.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/346167/original/file-20200707-194405-15noy92.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/346167/original/file-20200707-194405-15noy92.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=476&fit=crop&dpr=1 600w, https://images.theconversation.com/files/346167/original/file-20200707-194405-15noy92.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=476&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/346167/original/file-20200707-194405-15noy92.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=476&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/346167/original/file-20200707-194405-15noy92.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=598&fit=crop&dpr=1 754w, https://images.theconversation.com/files/346167/original/file-20200707-194405-15noy92.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=598&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/346167/original/file-20200707-194405-15noy92.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=598&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Mulberry Street in New York City, c. 1900.</span>
<span class="attribution"><a class="source" href="https://www.gettyimages.com/detail/news-photo/mulberry-street-in-new-york-city-ca-crowded-with-life-news-photo/514877700?adppopup=true">Bettman/Getty Images</a></span>
</figcaption>
</figure>
<h2>Street vendors and the informal urban economy</h2>
<p>Despite these challenges, street vending still thrives in many cities around the world. </p>
<p>For example, in a 2017 study I analyzed street vending in Cali, Colombia with scholar <a href="https://www.icesi.edu.co/profesores/cv/lina-martinez">Lina Martinez</a>. We found a <a href="https://www.witpress.com/Secure/ejournals/papers/SDP120403f.pdf">sophisticated operation with multiple levels</a>. They ranged from a well-established sector in the busy downtown, with better working conditions and relatively high incomes, to less-accessible markets that provided a gateway opportunity for the poor and recent rural migrants. We also <a href="https://doi.org/10.1016/j.cities.2017.03.010">unearthed significant flows of money</a>, and discovered that street vending often provided higher wages than the formal economy. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/345927/original/file-20200707-27863-8n66vk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/345927/original/file-20200707-27863-8n66vk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/345927/original/file-20200707-27863-8n66vk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=401&fit=crop&dpr=1 600w, https://images.theconversation.com/files/345927/original/file-20200707-27863-8n66vk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=401&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/345927/original/file-20200707-27863-8n66vk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=401&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/345927/original/file-20200707-27863-8n66vk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=504&fit=crop&dpr=1 754w, https://images.theconversation.com/files/345927/original/file-20200707-27863-8n66vk.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=504&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/345927/original/file-20200707-27863-8n66vk.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=504&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Street stall in Cali, Colombia.</span>
<span class="attribution"><span class="source">John Rennie Short</span>, <a class="license" href="http://creativecommons.org/licenses/by-nd/4.0/">CC BY-ND</a></span>
</figcaption>
</figure>
<p>Many development programs in low-income countries from the 1950s through the early 2000s sought to eradicate street vending. Local governments often took aggressive actions to <a href="https://doi.org/10.1016/j.cities.2017.06.007">remove street vendors from public spaces</a>. </p>
<p>Recently, however, many nations have embraced street commerce as a way to <a href="https://doi.org/10.1371/journal.pone.0223535">reduce poverty</a> and <a href="https://www.wiego.org/sites/default/files/publications/files/Public%2520Space%2520Toolkit.pdf">boost marginal groups</a>, especially poor women from ethnic and racial minorities. As one example, since 2003 it has been illegal to remove street vendors from public spaces in Colombia without offering them compensation or guaranteed participation in income-support programs.</p>
<p>Nor did street vending disappear entirely from cities in wealthy countries. It survived in traditional <a href="https://www.tripsavvy.com/top-flea-markets-1313571">flea markets</a> and farmer’s markets. These lively urban spaces are now augmented by the motorized version of vendor’s street food: <a href="https://www.webstaurantstore.com/blog/2042/top-food-truck-cities-in-america.html">food trucks</a>. </p>
<p>Building on food trucks’ success, more cities now are seeking to promote street vending. Advocates in New York City have campaigned since 2016 to increase the number of permits and licenses for street vending, which has been <a href="https://liftthecaps.wordpress.com/about/">tightly limited since the early 1980s</a>. And street food has become a <a href="https://www.escapehere.com/inspiration/the-absolute-best-cities-for-street-food-in-america/">tourist draw</a> across the U.S.</p>
<p><div data-react-class="Tweet" data-react-props="{"tweetId":"1276548567302365186"}"></div></p>
<h2>Street vending during a pandemic</h2>
<p>In my view, street vending offers many pluses for cities restarting after COVID-19 shutdowns. First, it can blunt some of the economic pain of the pandemic. Second, it can be configured to encourage social distancing more easily than the internal spaces of crowded shopping malls. Third, many cities are already being <a href="https://www.theatlantic.com/international/archive/2020/06/coronavirus-pandemic-urban-suburbs-cities/612760/">reconfigured and reimagined</a> through steps such as widening sidewalks and creating traffic-free streets. These actions create more opportunities for street commerce. </p>
<p>Initial U.S. economic stimulus measures <a href="https://time.com/5814076/coronavirus-stimulus-bill-corporate-bailout/">favored big business and the well-connected</a>. Grants, training programs and low-interest loans, designed to help more street vendors get established, would steer support to Americans who are <a href="https://www.huduser.gov/portal/periodicals/cityscpe/vol20num3/ch13.pdf">less wealthy and more ethnically diverse</a>. Encouraging this kind of entrepreneurship, with its low entry cost, is a small but significantly more equitable way to stimulate the economy. </p>
<p>Street vending offers still more benefits. It <a href="https://www.cnn.com/style/article/cities-design-coronavirus/index.html">enlivens urban public spaces</a> and increases public safety by <a href="https://www.curbed.com/2019/11/14/20963057/street-vendors-public-space-safety">making streets vibrant and welcoming</a>. Promoting street vending can generate employment, keep people safe and create the vitality and comity that is the hallmark of livable <a href="https://www.goodreads.com/book/show/12426037-the-humane-city">humane cities</a>. </p>
<p>COVID-19 has forced us to rethink city living. I believe we should take the opportunity to reimagine a livelier, more interesting and more equitable post-pandemic city.</p><img src="https://counter.theconversation.com/content/141675/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Rennie Short does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
After trying to remove street vendors from its cities for years, China is supporting them to help jump-start its economy. An urban scholar explains why other cities should do the same.
John Rennie Short, Professor, School of Public Policy, University of Maryland, Baltimore County
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/135449
2020-05-04T09:15:13Z
2020-05-04T09:15:13Z
How South African stokvels manage their lending activities outside the courts
<figure><img src="https://images.theconversation.com/files/329474/original/file-20200421-82699-ir7jcv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Stokvel members prefer to manage their affairs through non-state means.</span> <span class="attribution"><span class="source">Getty Images</span></span></figcaption></figure><p>The South African stokvel sector is massive and controls vast financial resources. It <a href="https://www.africanresponse.co.za/stokvel-surveys/">holds</a> an estimated R49.5 billion in member savings and has some 11.6 million participants. A <a href="https://nasasa.co.za/about-stokvels/">stokvel</a> is a type of informal credit union in which members agree to contribute a fixed amount of money to a common pool weekly, fortnightly or monthly. </p>
<p>Similar informal financial associations are found in many different cultures <a href="https://en.wikipedia.org/wiki/Rotating_savings_and_credit_association">around the world</a>. It is not known, however, whether this practice arose spontaneously in each country or through borrowing. <a href="https://en.wikipedia.org/wiki/Stokvel">Folklore</a> has it that stokvels in South Africa date back to gatherings of African farm workers at 19th century agricultural “stock fairs” in the Eastern Cape. </p>
<p>But, with a sector this size, why do so few stokvels or their members appear before South African courts? We set out to try to understand why. We conducted <a href="https://www.tandfonline.com/eprint/BQY8GUTQW6J2BNA3QR8R/full?target=10.1080/07329113.2020.1728493">a study</a> to test how stokvels are ordered. </p>
<p>Our findings suggest that the answer may lie in the fact that stokvel members prefer to manage their own affairs through non-state means. This is what economists would call <a href="https://www.uantwerpen.be/en/research-groups/personal-rights-and-property-rights/drivers-for-research/private-ordering/">“private ordering”</a>. In stokvels this process begins with contracting.</p>
<h2>A case that tells a story</h2>
<p><a href="http://www.saflii.org/cgi-bin/disp.pl?file=za/cases/ZAECHC/2005/34.html&query=mndi%20v%20malgas">One of very few cases</a> dealing with a stokvel in the <a href="https://juta.co.za/catalogue/south-african-law-reports-1947-to-date-the-online_22181/">South African Law Reports</a> arose more than two decades ago. Since cases which reach at least high court level and lead to a development of the law tend to be reported, this scarcity is revealing.</p>
<p>The story behind the case offers some suggestions on why this may be so.</p>
<p>In January 1998, Ms Malgas borrowed R6,000 from her friend Ms Mndi. The source of the capital lent was Ms Mndi’s stokvel, the Masikhule Club. The capital was advanced by the club to Ms Mndi at a rate of 30% per month. Ms Mndi in turn lent the money, on the same terms, to Ms Malgas. It took Ms Malgas some time to repay this loan. Eventually in December 1998, she repaid R34,692.60 to Ms Mndi, who then transferred this sum to her stokvel. </p>
<p>Ms Malgas clearly felt aggrieved at having to repay such a large amount, since she later instituted a claim against Ms Mndi in the magistrate’s court for return of the money paid. Indeed, the sum paid was above what was at the time lawfully chargeable as a fee for the use of money. She won her case, but due to the intricacies of the law of unjustified enrichment, she received only R4,435.40 back from Ms Mndi. This amount represented Ms Mndi’s personal share of the profits on the loan according to her stokvel’s rules. </p>
<p>This case illustrates how stokvel practices may not always be lawful and that it can be difficult to address this effectively through the courts. </p>
<p>If many stokvels operate outside the law, then how do they remain functional?</p>
<p>We spoke to 20 individual stokvel members in Khayelitsha, Cape Town, and held two focus groups. Our participants were all members of stokvels which had the object of saving money and providing loans to members. </p>
<p>Participants spoke of using stokvels to build and improve homes in Khayelitsha and in the Eastern Cape; to finance the purchase of cars and household appliances; to provide for children; and to finance cultural processes (such as the initiation of a child, customary marriage payments and funerals). </p>
<p>Members also spoke of a desire to uplift friends, family and neighbours through teaching financial discipline. The stories we heard were a positive antidote to the <a href="https://www.iol.co.za/business-report/economy/south-africans-in-higher-demand-for-personal-loans-as-consumer-debt-goes-through-the-roof-38057625">gloom of the consumer debt news</a> one often reads.</p>
<p>Despite this, the interest rate charged by Ms Mndi and her stokvel was typical in our sample. This case could just as likely have arisen in Khayelitsha among our participants.</p>
<h2>Governance structures</h2>
<p>Most stokvels will have <a href="https://nasasa.co.za/membership/constitution/">a constitution</a>. If a stokvel applies for a bank account, a written version of this constitution will be <a href="https://www.nedbank.co.za/content/nedbank/desktop/gt/en/personal/save-and-invest/savings-accounts/stokvel-account1.html?cmpid=psea:goo:ret:Stokvel::odd&gclid=Cj0KCQjwpfHzBRCiARIsAHHzyZqHoFDnkGXXlSEtXtGnEA8ItiG548U2loSpsN2_op1TQnciNZ9aAUkaArKBEALw_wcB&gclsrc=aw.ds">required</a>.</p>
<p>The constitution provides the blueprint for how meetings are run and how office bearers are elected, as well as determining the rules of the stokvel and debt collection procedures. In our view, the constitution forms a contract between a member and the group. There are elaborate procedures for obtaining consent to a constitution. This is sometimes done through oral ceremonies or even through formalising written consent through an affidavit at the local police station.</p>
<p>Importantly, the processes in the constitution are seen as binding on members. As with any contract, an obligation is created by agreement which then binds the parties. Stokvels involve loans. If a loan was not repaid, most of our participants would resolve the situation themselves through negotiation, or use group pressure through club members. This confirms <a href="https://www.researchgate.net/publication/334754076_Stokvels_as_an_instrument_and_channel_to_extend_credit_to_poor_households_in_South_Africa">other reports </a> in the literature. </p>
<p>If this failed, members would approach a street committee, or even the local taxi-men for dispute resolution assistance. As a last resort, the debtor’s property might be attached and sold by the group without resorting to the courts. Only one participant had ever approached a magistrate’s court. This may account for why Mndi v Malgas, discussed above, is such a legal rarity.</p>
<h2>A privately ordered system</h2>
<p>What does this tell us about stokvel ordering processes? </p>
<p>First, stokvels are part of the informal economy and as such are largely <a href="https://www.westerncape.gov.za/police-ombudsman/files/atoms/files/khayelitsha_commission_report_0.pdf">beyond the reach of the law</a>. Members prefer their own devices for managing conflict and enforcing debts. </p>
<p>Secondly, contracts are the basis of this private system, and contracts must be upheld. Thirdly, despite some of the harshness which was reported to us in enforcing stokvel debts, most participants said that default was rare in their stokvel. The system works. The reason for this was reported to be the careful selection of members. By working with trustworthy individuals, the risk of default was reduced.</p>
<p>South African law is not part of the stokvel contract enforcement process, and indeed some practices reported to us would be illegal under formal sector law. Rather, a working system has been devised to govern communities where money is short, access to justice is unaffordable, and debts must be repaid for the good of all.</p><img src="https://counter.theconversation.com/content/135449/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Andrew Hutchison receives funding from the National Research Foundation of South Africa (grant number 111748). </span></em></p>
Millions of South Africans exchange billions of rands annually but disputes involving these transactions hardly ever appear before the country’s courts.
Andrew Hutchison, Associate Professor of Commercial Law, University of Cape Town
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/137175
2020-05-03T09:30:42Z
2020-05-03T09:30:42Z
Explainer: why COVID-19 provides a lesson for Africa to fund social assistance
<figure><img src="https://images.theconversation.com/files/331080/original/file-20200428-110752-6sraav.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Lockdowns to curb the coronavirus have shut down Africa's dominant informal economy, destroying livelihoods</span> <span class="attribution"><span class="source">Simon Maina/AFP/GettyImages</span></span></figcaption></figure><p>African countries have responded swiftly to the threat of COVID-19 by implementing various measures to contain its spread. Most of the continent is in lockdown or under curfew, or a combination of both. </p>
<p>Unfortunately, these measures have resulted in the loss of livelihoods for many people, particularly in the informal sector. An estimated <a href="https://www.ilo.org/global/about-the-ilo/newsroom/news/WCMS_627189/lang--en/index.htm">85.5% of workers</a> across the continent work in the informal sector.</p>
<p>To shield the formal and informal economies from lasting damage, and vulnerable households from income and food shortages, a range of social protection steps have been taken by African governments. </p>
<p>Rwanda, in East Africa, has a temporary relief programme that delivers free food to households that have been adversely affected by the ongoing lockdown. It aims to <a href="https://www.iol.co.za/news/africa/rwanda-to-deliver-free-food-to-20-000-households-during-coronavirus-lockdown-45756889">reach 20,000 such households</a>. Tunisia, in North Africa, made available <a href="https://www.aljazeera.com/news/2020/04/food-tunisians-struggle-coronavirus-lockdown-200411142312791.html">$155 million</a> to assist poor families or those who have lost their jobs. South Africa introduced an unemployment income grant and increased the amount of <a href="https://www.gov.za/coronavirus/socialgrants">existing social grants</a>. </p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/zimbabwes-shattered-economy-poses-a-serious-challenge-to-fighting-covid-19-135066">Zimbabwe's shattered economy poses a serious challenge to fighting COVID-19</a>
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<p>Most responses introduced on the continent are temporary, instead of institutionalised, social assistance measures. But what is the state of social assistance programmes in Africa, and how suited are they to shield people against the loss of livelihood?</p>
<h2>Social assistance in Africa</h2>
<p>State-run social assistance includes institutionalised cash transfers, food transfers (not school feeding) and public works programmes.</p>
<p>Cash transfers dominate, constituting <a href="https://social-assistance.africa.undp.org/data">72% of social assistance</a> in Africa. Most of these programmes are found in Southern Africa. They include child grants, disability grants, old age pensions and war veterans’ grants. </p>
<p>Only three countries in Central Africa have cash transfers – <a href="https://social-assistance.africa.undp.org/data">Cameroon, Republic of Congo and São Tomé and Principe</a>.</p>
<p>Public works constitute 23% of social assistance in Africa, food transfers 2%, and the remainder <a href="https://social-assistance.africa.undp.org/data">combine cash, food or public works</a>. Ethiopia’s Productive Safety Net Programme, for instance, delivers a combination of <a href="https://www.ids.ac.uk/projects/ethiopia-productive-safety-net-programme/">cash transfers, food transfers and public works to as many as 8 million rural citizens</a>. </p>
<p>Social assistance programmes in Central Africa are mostly designed and funded by international partners, such as the <a href="https://www.ifad.org/en/">International Fund for Agricultural Development</a>, which funds <a href="https://www.ilo.org/africa/countries-covered/burundi/facet/WCMS_324680/lang--fr/index.htm">rural youth jobs in Burundi</a>. Their reach is low in comparison to the number of people living in poverty in these countries. And they are mostly inadequate to lift the recipients out of poverty. </p>
<p>For instance, the cash transfers in the <a href="https://www.sahistory.org.za/place/republic-congo">Republic of Congo</a> reach only 5% of the children who need them. The amount of per capita cash transfer a day is also below the World Bank’s <a href="https://social-assistance.africa.undp.org/data">daily per capita international poverty line</a>.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/331086/original/file-20200428-110738-36qcu5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/331086/original/file-20200428-110738-36qcu5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/331086/original/file-20200428-110738-36qcu5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/331086/original/file-20200428-110738-36qcu5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/331086/original/file-20200428-110738-36qcu5.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/331086/original/file-20200428-110738-36qcu5.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/331086/original/file-20200428-110738-36qcu5.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Fewer people on the streets mean fewer customers vendors in Cape Town.</span>
<span class="attribution"><span class="source">EFE-EPA/Nic Bothma</span></span>
</figcaption>
</figure>
<p>By contrast, social assistance programmes in Southern Africa and East Africa are institutionalised and are domestically funded. They are larger in scale and their transfers are adequate.</p>
<p>For instance, the social assistance programme in Mauritius reaches all the children who need it, and the per capita cash transfers exceed the <a href="https://social-assistance.africa.undp.org/data">international poverty line</a>. The same is true for <a href="https://social-assistance.africa.undp.org/data">Botswana and South Africa</a>.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/mauritius-heads-into-coronavirus-storm-with-strong-social-welfare-buffers-135702">Mauritius heads into coronavirus storm with strong social welfare buffers</a>
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</em>
</p>
<hr>
<p>Several countries in East and Southern Africa are struggling, though, to fund social assistance programmes to improve their reach and adequacy. These include Madagascar, Malawi, Zambia and Zimbabwe. Some countries such as Eritrea, Somalia and South Sudan do not have any state-run social assistance programmes in place.</p>
<p>Most social assistance in Africa is targeted at poor and vulnerable children and older people. People with disabilities, the youth and other adults are typically left out. Vulnerable people with disabilities are not covered by any cash transfers in all countries in Central Africa.</p>
<h2>COVID-19 emergency relief responses</h2>
<p>Countries that either have institutionalised social assistance or rely on domestic resources to fund their social assistance programmes did not hesitate to provide emergency relief to mitigate the effects caused by the COVID-19 containment measures. These countries include <a href="http://www.ugogentilini.net/?p=823">Egypt, Kenya and South Africa</a>.</p>
<p>By 2 April, several North, West and Southern African countries had introduced <a href="http://www.ugogentilini.net/?p=823">emergency relief measures</a> in response to the challenges posed by lockdowns. By 9 April, some countries in East Africa had also <a href="http://www.ugogentilini.net/?p=840">followed suit</a>. As of 24 April, new countries that introduced social protection measures included <a href="https://www.ugogentilini.net/">Angola, Chad, Libya and Nigeria</a>.</p>
<p>The emerging pattern of COVID-19 responses in the past month shows that countries with weak state-run social assistance, such as those in Central Africa, lag far behind in shielding livelihoods and the economy from lasting damage.</p>
<p>It is hard to expect that these countries will get any significant foreign assistance. That’s because their global partners, among them France, the United States and the United Kingdom, are themselves badly affected by the pandemic. They are thus unlikely to focus their attention elsewhere. In any event, even before COVID-19, the international assistance provided to these <a href="https://social-assistance.africa.undp.org/country">countries</a> was not enough.</p>
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<p>
<em>
<strong>
Read more:
<a href="https://theconversation.com/coronavirus-poses-ethical-concerns-a-view-on-the-choices-being-made-in-kenya-135338">Coronavirus poses ethical concerns: a view on the choices being made in Kenya</a>
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<h2>What needs to be done</h2>
<p>African countries need to find domestic sources, through taxation, to finance social assistance programmes to provide for their citizens. There are three basic reasons this needs to happen.</p>
<p>First, domestic funding will always be necessary in the event there is a global crisis or pandemic such as COVID-19, and global partners are not able to assist significantly.</p>
<p>Second, it is hard to teach an old dog new tricks. Countries that depend on donor funding struggle to fund emergency relief for those affected by COVID-19 lockdowns themselves. They are not used to it. To the contrary, countries that are used to funding their own social assistance have been quick to fund emergency relief to mitigate the effects of lockdowns, especially on poor people.</p>
<p>Third, international funding, though necessary and much needed on the continent, has unintended consequences. That’s because it tends to remove the incentive for African governments to put in place their own social assistance programmes. And the mostly short-term nature of the finances from the global partners means they can’t be used as the basis to create long-term, large-scale social assistance programmes. </p>
<p>That’s why the <a href="https://unctad.org/meetings/en/SessionalDocuments/ares69d313_en.pdf">African Union</a> advocates the use of domestic resources for social assistance.</p><img src="https://counter.theconversation.com/content/137175/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Gift Dafuleya has provided consultancy services for UNDP, UNECA and IDEP. </span></em></p>
The loss of livelihoods flowing from the efforts to combat the pandemic highlights the dearth of social protection measures on the continent.
Gift Dafuleya, Lecturer in Economics, University of Venda
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/135066
2020-04-12T14:04:15Z
2020-04-12T14:04:15Z
Zimbabwe’s shattered economy poses a serious challenge to fighting COVID-19
<figure><img src="https://images.theconversation.com/files/326155/original/file-20200407-85423-12r0p9p.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Hawkers' stalls in Harare, Zimbabwe, lie deserted following lockdown in a bid to slow down the spread of the coronavirus.
</span> <span class="attribution"><span class="source">EFE-EPA/Aaron Ufumeli</span></span></figcaption></figure><p>The COVID-19 pandemic has left Zimbabwe in an extremely difficult situation. As of early April, the number of infections and deaths from the pandemic <a href="https://www.herald.co.zw/zim-records-3rd-coronavirus-death/">appeared low</a>, although the available data isn’t necessarily reliable. </p>
<p>President Emmerson Mnangagwa <a href="https://www.newzimbabwe.com/breaking-mnangagwa-decrees-21-day-covid-19-lockdown-starting-monday/">announced</a> a 21-day lockdown which began on 30 March, in a bid to contain the spread of the coronavirus. The decree ordered all citizens to stay at home, “except in respect of essential movements related to seeking health services, the purchase of food”, or carrying out responsibilities that are in the critical services sectors. </p>
<p>Other measures include the shutting down of public markets in the informal sector, except those that sell food. </p>
<p>None of this will be easy to implement in Zimbabwe.</p>
<p>The country has an economic profile similar to that of many developing countries. The difference is that its informal sector makes up a much higher percentage of the overall economy. According to a 2018 International Monetary Fund report, Zimbabwe’s informal economy is <a href="https://www.imf.org/en/Publications/WP/Issues/2018/01/25/Shadow-Economies-Around-the-World-What-Did-We-Learn-Over-the-Last-20-Years-45583">the largest in Africa</a>, and second only to Bolivia in the world. The sector accounts for at least 60% of all of Zimbabwe’s economic activity. </p>
<p>In addition to the usual problems faced by countries with large informal economies, including poor governance and low tax revenues, Zimbabwe has an added set of problems: its economy is broken.</p>
<p>To implement the nationwide <a href="https://www.newzimbabwe.com/breaking-mnangagwa-decrees-21-day-covid-19-lockdown-starting-monday/">lockdown</a> Mnangagwa is likely to have to inflict further damage to an already extremely fragile economy. </p>
<p>The president did not announce a stimulus financial package to cushion business from the impact of the lockdown. This might result in the total collapse of some businesses. </p>
<h2>Fragile economy</h2>
<p>Zimbabwe’s economy has been shrinking since <a href="https://www.afdb.org/fileadmin/uploads/afdb/Documents/Generic-Documents/3.%20Zimbabwe%20Report_Chapter%201.pdf">2000</a>, triggered by the government’s controversial land <a href="https://www.fin24.com/Opinion/5-lessons-sa-can-learn-from-zim-land-grabs-20180305-2">re-distribution programme</a> of that year. The violent programme wreaked havoc on agriculture, which was then the mainstay of the Zimbabwean economy. </p>
<p>This was compounded by subsequent sanctions imposed by the West in response to the <a href="http://www.thethinker.co.za/resources/Thinker_81/81%20chagonda.pdf">seizures of white-owned farms and land</a>. </p>
<p>Around <a href="https://www.cnbc.com/2020/03/03/zimbabwe-in-economic-and-humanitarian-crisis-as-imf-sounds-alarm.html">6 million Zimbabweans</a> – about 34% of the population – live in extreme poverty.</p>
<p>The IMF recently gave a very bleak <a href="https://www.imf.org/en/News/Articles/2020/02/26/pr2072-zimbabwe-imf-executive-board-concludes-2020-article-iv-consultation">assessment</a>, saying that the country’s economy had contracted by 7.5% in 2019. It put the inflation rate at over 500%, meaning that the country was heading back to the traumatic hyper-inflation era of <a href="https://www.cnbc.com/2020/03/03/zimbabwe-in-economic-and-humanitarian-crisis-as-imf-sounds-alarm.html">2007/8</a>, when inflation peaked at an official <a href="https://www.economicshelp.org/blog/390/inflation/hyper-inflation-in-zimbabwe/">231 million percent</a>.</p>
<p>The IMF report shows that Zimbabwe’s economy performed the worst in sub-Saharan Africa in 2019. Its prognosis is disheartening, showing that if </p>
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<p>…governance, and corruption challenges, entrenched vested interests, and enforcement of the rule of law, (were not observed) then…there is little prospect of a major improvement to Zimbabwe’s economic and financial challenges in the <a href="https://www.cnbc.com/2020/03/03/zimbabwe-in-economic-and-humanitarian-crisis-as-imf-sounds-alarm.html">short to medium term …</a>. </p>
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<p>The dire economic situation is further worsened by the fact that the country is suffering its <a href="https://www.cnbc.com/2020/03/03/zimbabwe-in-economic-and-humanitarian-crisis-as-imf-sounds-alarm.html">worst hunger crisis in a decade</a>, largely due to an ongoing drought that started last year. The shortage of essential foods, such as the staple maize meal, often results in stampedes at the few <a href="https://www.zimbabwesituation.com/news/millers-avail-40-000t-maize-for-roller-meal/">markets</a> where they can still be found. </p>
<h2>Zimbabwe’s informal sector</h2>
<p>Two decades of economic turmoil have seen Zimbabwe’s formal economic sector shrinking significantly. For example, manufacturing, clothing and textile industries have almost totally collapsed, with factories reduced to <a href="https://set.odi.org/wp-content/uploads/2017/08/SET-Outlook-for-Zimbabwe-Economy_Sep2017.pdf">dilapidated shells</a>.</p>
<p>The consequence is that the informal sector has grown exponentially. It’s estimated that a staggering 90% of Zimbabwe’s working population is <a href="https://set.odi.org/wp-content/uploads/2017/08/SET-Outlook-for-Zimbabwe-Economy_Sep2017.pdf">employed in this sector</a>. </p>
<p>I have been doing <a href="https://scholar.google.co.za/citations?user=sQSjKP0AAAAJ&hl=en">research</a> on Zimbabwe’s informal sector for the last 12 years. I have found that it sustains many families’ livelihoods, even though the majority of participants in the sector live from hand to mouth as petty traders. This reality that confronts Zimbabwe’s informal economy is corroborated by <a href="https://library.fes.de/pdf-files/bueros/simbabwe/13714.pdf">research</a> by the Labour and Economic Development Research Institute of Zimbabwe. </p>
<p>In addition, almost everyone who is employed in the formal economy augments their income through informal sector activities such as <a href="https://scholar.google.co.za/citations?user=sQSjKP0AAAAJ&hl=en">cross-border trading</a>.</p>
<p>Reliable numbers are hard to come by, but a very high number of Zimbabweans <a href="https://www.aljazeera.com/ajimpact/zimbabwe-economy-founders-millennials-eke-living-190910134415766.html">eke out a living in this sector</a>, or rely on it for food, clothing, fuel, local currency and forex. </p>
<h2>Stern test</h2>
<p>The lockdown in Zimbabwe is going to provide a stern test for its informal economy, which is the country’s dominant economy. Most traders are subsistence traders and are already mired in extreme poverty. The jury is out on the extent to which they will observe the lockdown. </p>
<p>The government should immediately put in place a stimulus package that can cushion the informal economy. </p>
<p>Otherwise, a lot of livelihoods are going to be destroyed. The ramifications for the country and the whole region, especially neighbouring South Africa, will be grim.</p>
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Read more:
<a href="https://theconversation.com/zimbabwes-deepening-crisis-time-for-second-government-of-national-unity-122726">Zimbabwe’s deepening crisis: time for second government of national unity?</a>
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<img src="https://counter.theconversation.com/content/135066/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Tapiwa Chagonda has previously received funding from the National Research Foundation (NRF). </span></em></p>
The current lockdown in Zimbabwe is going to provide a stern test for its informal economy, which is the country’s dominant economy and employs 90% of people.
Tapiwa Chagonda, Associate Professor of Sociology, University of Johannesburg
Licensed as Creative Commons – attribution, no derivatives.
tag:theconversation.com,2011:article/135070
2020-04-05T08:33:15Z
2020-04-05T08:33:15Z
Pandemic underscores gross inequalities in South Africa, and the need to fix them
<figure><img src="https://images.theconversation.com/files/324047/original/file-20200330-146712-1kabufb.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Per-Anders Pettersson</span> <span class="attribution"><span class="source">GettyImages</span></span></figcaption></figure><p>Now more than ever, South Africans are painfully aware of the inequalities that continue to play out in the country. In people’s pre-COVID-19 lives, the realities of living in a country that is <a href="https://www.worldbank.org/en/country/southafrica/overview">among the most unequal</a> in the world were easily overlooked. The pandemic shines a very bright light on this reality. It asks us to fundamentally address them – not just at this time of the pandemic, but as a social justice imperative.</p>
<p>As messaging about preventing the coronavirus ramped up, the consequences of inequalities in the provision of basic service provision in the country have become clear. These disparities between rich and poor are reflected across a range of <a href="https://www.gov.za/speeches/minister-lindiwe-sisulu-interventions-curb-spread-coronavirus-covid-19-25-mar-2020-0000">interventions</a> that have been put in place to manage the pandemic and its social and economic consequences. These include access to water, housing circumstances, as well as people’s <a href="https://theconversation.com/south-africa-can-and-should-top-up-child-support-grants-to-avoid-a-humanitarian-crisis-135222">very high dependence on social grants</a> and the informal sector for income.</p>
<h2>Five areas where inequality is starkest</h2>
<p><strong>Living circumstances:</strong> The preventive measures have highlighted inequalities in living circumstances. Take the case of hand washing. <a href="https://www.ohchr.org/Documents/Issues/Housing/InformalSettlements/SERI.pdf">The 1.1 to 1.4 million</a> people who live in informal settlements in South Africa don’t have access to water in their homes or in their yards. An estimated 19% of the <a href="https://businesstech.co.za/news/general/62749/sa-population-flocking-to-cities/">nearly 19 million people living in rural areas</a> lack access to reliable supply of clean water; 33% <a href="http://12.000.scripts.mit.edu/mission2017/case-studies/water-access-in-south-africa/">do not have basic sanitation</a>. This makes regular hand washing difficult. And social distancing or quarantining is near impossible when water access and ablutions are communal, and where settlements are overcrowded. </p>
<p><strong>Livelihoods:</strong> For many people at the upper end of the wage spectrum, working remotely has been relatively easy, with limited impact on their ability to earn a living. Such workers are in the formal labour market. They are protected by both a legal and <a href="https://www.iep.utm.edu/soc-cont/">social contract</a> as well as a safety net of <a href="https://www.labourguide.co.za/uif/907-uif-unemployment-benefits">unemployment benefits</a>. </p>
<p>Small business owners will be under significant pressure in the coming weeks and months. But they will be partially cushioned by the <a href="https://www.cnbcafrica.com/news/2020/03/25/these-are-the-relief-measures-being-offered-to-south-africas-small-businesses-during-lockdown/">business support measures</a> announced by the government.</p>
<p>In contrast, the most vulnerable workers will struggle without support at this time. Casual workers (like many domestic workers), those who are self-employed (such as Uber drivers), and those working in the informal economy are not protected by legal contracts. </p>
<p>In general these workers, <a href="https://theconversation.com/south-africas-informal-sector-creates-jobs-but-shouldnt-be-romanticised-122745">who make up over 20% of South Africa’s workforce</a>, cannot access unemployment benefits. They will be under enormous pressure financially, potentially unable to feed themselves and their families.</p>
<p>President Cyril Ramaphosa has made it clear that the government is aware of these challenges <a href="http://www.thepresidency.gov.za/speeches/message-president-cyril-ramaphosa-covid-19-pandemic">and will move to ensure support</a>. But it remains to be seen what that entails. </p>
<p><strong>Education:</strong> Inequalities in education were also immediately evident when school were closed. While private schools and many suburban public schools were able to switch to technology-supported learning relatively easily, most public schools were not. </p>
<p>The directive by the Department of Basic Education was to ensure that learning continued by <a href="https://www.education.gov.za/COVID19.aspx">providing workbooks and worksheets</a> online. But, many parents will be facing the very real struggle of supporting their families in a locked down economy. This, and other problems, including limited access to technology and data, means that many parents will struggle to supervise their children’s learning. </p>
<p>Equally concerning is how this will affect education outcomes in the longer term. <a href="http://www.ci.uct.ac.za/sites/default/files/image_tool/images/367/Child_Gauge/South_African_Child_Gauge_2015/Child_Gauge_2015-Schooling.pdf">Analysis</a> already shows how learning backlogs in the early years, forged in an unequal education system, are compounded over time. Further backlogs under the current situation are likely to have long-term effects.</p>
<p><strong>Access to the internet:</strong> Manuel Castells, a sociologist concerned with the internet age and inequality, notes in his book <a href="https://books.google.co.za/books?id=Q1Mo-3ObWWgC&printsec=frontcover&dq=internet+galaxy+castell&hl=en&sa=X&ved=0ahUKEwi9l_aZjrroAhW9SBUIHWnADz8Q6AEIKDAA#v=onepage&q=internet%20galaxy%20castell&f=false">The Internet Galaxy</a>:</p>
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<p>The fundamental digital divide is not measured by the number of connections to the Internet, but by the consequences of both connection and lack of connection.</p>
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<p>At universities and other higher education institutions, wealthier students have been able to switch to online learning quickly, while poorer students battle with high data costs. </p>
<p>Inequalities in access to data further entrench existing inequalities in education and livelihoods during the COVID-19 crisis.</p>
<p><strong>Food security:</strong> The effects of panic buying on the food security of people with <a href="https://theconversation.com/panic-buying-in-the-wake-of-covid-19-underscores-inequalities-in-south-africa-134172">limited income has received attention</a>. But a less well-known impact of the measures is that over 9 million children will not receive a daily, nutritious meal while schools remain closed. </p>
<p>The National School Nutrition Programme potentially has positive effects on <a href="https://www.ajol.info/index.php/sajchh/article/view/178328">reducing stunting and obesity</a>. In the face of prolonged school closures, these children face increased food insecurity, with potential long-term consequences for their health.</p>
<p>There have been <a href="https://www.goodthingsguy.com/people/students-make-food-parcels/">heartwarming responses</a> from the public to ensure that food packs are provided to children. But it is simply not possible to reach the over 9 million children who depend on this meal.</p>
<h2>What can be done?</h2>
<p>The measures <a href="http://www.thepresidency.gov.za/speeches/statement-president-cyril-ramaphosa-escalation-measures-combat-covid-19-epidemic%2C-union">announced</a> by President Ramaphosa to mitigate the problem reflect an understanding of how existing inequalities will affect especially the most vulnerable people, and a willingness to address the problem.</p>
<p>Social protection measures that can quickly provide a <a href="https://blogs.worldbank.org/impactevaluations/what-can-low-income-countries-do-provide-relief-poor-and-vulnerable-during-covid">safety net</a> are crucial at this time. But, the current social protection system provides a safety net only to those outside of the labour market – children, older people, and people with disabilities. Unemployment benefits accrue to those in formal employment who contribute to the Unemployment Insurance Fund. This leaves the vast majority of working-age adults without a safety net at this time. </p>
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Read more:
<a href="https://theconversation.com/south-africa-can-and-should-top-up-child-support-grants-to-avoid-a-humanitarian-crisis-135222">South Africa can – and should – top up child support grants to avoid a humanitarian crisis</a>
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<p>While there have been relatively quick changes to existing mechanisms to provide <a href="https://businesstech.co.za/news/business/385757/exceptional-tax-measures-for-south-africa-to-combat-covid-19-pandemic/">support to small, medium and micro enterprises</a> there are, as yet, no measures to protect informal and casual workers and ensure cash injections into vulnerable households.</p>
<p>The country needs to devise a social contract to better address the vulnerabilities that low-wage, casual and <a href="https://www.wiego.org/publications/reshaping-social-contract-emerging-relations-between-state-and-informal-labor-india">informal workers face daily</a>.</p>
<p>The country must also move towards having low-cost, reliable internet access that can open up opportunities for learning and work for its most vulnerable citizens. Basic services – such as clean water, electricity and sanitation – must also be of a quality that not only promotes people’s right to dignity, but also help protect people from the effects of such a pandemic as COVID-19. </p>
<p>This pandemic highlights how crucial it is to fundamentally address the inequalities that exist in South African society. If a social justice imperative does not push us to do so, perhaps the realisation of mutual connections, borne of a pandemic that knows no class or race lines, will.</p><img src="https://counter.theconversation.com/content/135070/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Lauren Graham does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>
While small businesses will be partially cushioned by government support measures, there’s no support for the most vulnerable workers.
Lauren Graham, Associate professor at the Centre for Social Development in Africa, University of Johannesburg, University of Johannesburg
Licensed as Creative Commons – attribution, no derivatives.