Conference highlights urban informal sector
April 25, 2006
By Samantha Enslin
Durban - Aspirations by local governments in South Africa to develop "world-class cities" have led to the informal sector being regarded as a nuisance and an eyesore.
However, it is estimated that the informal sector contributes between 8 percent and 12 percent to South Africa's gross domestic product.
The informal economy is also one of the few segments of the labour force where the number of workers continues to increase.
The importance of this sector's contribution was the subject of a conference in Durban on world-class cities and the urban informal economy, organised by Women in Informal Employment Globalising and Organising, which began yesterday.
Speaking at the conference, Martha Chen, a lecturer in public policy at Harvard University's Kennedy School of Government, said: "The challenge for cities is to decide whether and how to work with the informal economy.
"There are competing issues. There are aspirations to become world class in status in order to attract events and visitors. [But] if we go the path of exclusion and marginalisation it will only lead to polarisation and conflict."
Urbanisation is a growing trend and most people who migrate to cities are finding work in the informal sector.
Chen said less than 40 percent of the global population lived in urban areas 30 years ago. This proportion now stood at 50 percent and in 30 years' time more than 60 percent of the world's population would be living in cities.
Currently in Asia and sub-Saharan Africa, 70 percent of the non-farm workforce is employed in the informal sector. In Latin America and north Africa, the informal sector provides 50 percent of the non-farm workforce.
The September 2005 labour force survey compiled by Statistics SA said that the informal economy constituted 27.1 percent of South Africa's labour force. This included 2.4 million people who were working in informal enterprises and 859 000 domestic workers.
The informal sector includes street vendors, waste pickers, transport workers and those making goods and providing services from home.
Of those working informally, 49 percent are in trade, 17 percent in services, 14 percent in construction, 10 percent in manufacturing and the remainder in transport and finance, statistics show.
Caroline Skinner, a research fellow at the University of KwaZulu-Natal's School of Development Studies, said: "Women are often disproportionately represented in the informal economy, and particularly in less lucrative activities."
Skinner said the rhetoric of the second economy, which describes the informal sector as structurally disconnected from the first economy, was not supported by evidence. "There are few examples of informal sector work that is not in some way linked to the formal economy," she explained.
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