Street Vending No Longer Illegal

Street vending has transformed into a legal sector of Iran’s economy, which might lead to a confrontation with the established legal sectors that supply goods.
In the past, vendors used to display their wares on the streets intermittently, but now street vending has become a year-round job. This phenomenon presents its own threats and opportunities, the Persian daily Etemad reported.
Amir Sayyah, an official with the Ministry of Economic Affairs and Finance, recently extended legal recognition to street vending, saying those working as hawkers can now apply for a business permit. 
“With the cooperation and help of municipalities and the Ministry of Cooperatives, Labor and Social Welfare, street vending will be considered a legal, productive job,” he said. 
Up until now, street vendors used to sell clothes, bags, shoes, food and agricultural products on the sidewalks and municipalities faced challenges in organizing them. 
People used to feel upset when vendors were treated harshly. Street vending is not considered a criminal offense by law, but the main reason municipal officers confiscated the wares of vendors is because of the obstruction they posed to trespassers and road traffic.

Threats and Opportunities

Social activists believe that recognizing street vending as legal is in line with the ease of doing business and helps people, who cannot afford to purchase a shop or pay heavy rent, make a living. 
On the other hand, the recognition of street vending is a kind of thumbs down for the legal supply sector who face countless problems at a time of recession, such as high rents.
Hossein Raghfar, an eminent professor of economics at the Alzahra University, believes that street vending has always been in the economy as an informal job. 
“Peddlers make low earnings and have unsophisticated skills. They work without social security and insurance coverage. The informal sector has thrived in the economy of developing countries and Latin America, for instance; at times, informal economy accounted for up to 70% of the economy of these countries. Street vendors have imposed themselves on the economy, regardless of the government’s will. At present, street vendors are active even in developed countries,” he told Etemad. 
“But the key point is that what obligations this recognition creates for the government. Why did the government ignore these people so far? What is the government’s goal in giving legal status to this job?”

Significant Share of Rent in Goods Sold by Shops

The shrinkage of the purchasing power and their reluctance to buy from shops, Raghfar says, has allowed street vending to flourish. “Unfortunately, Iran’s economy has suffered dearly in recent years, such that rent accounts for a significant percentage of the price of goods in shops, as shopkeepers have to pay the rent of their shops by adding it to the price of goods. My estimate is that over 60% of the price of goods go for paying rents. This has become one of the reasons triggering economic recession in the country.”
Stressing that the government is to blame for the rise in prices, the economist said, “Rental costs, which have increased due to the jump in housing prices, are in fact buoyed by the depreciation of local currency. It is one of the causes of economic recession, inflation and economic inefficiencies. In addition, taxation has left no choice for shopkeepers but to give their goods to peddlers to sell them to the people on the streets.”
There are groups that rent out the street to peddlers and provide them with legal support in return. In fact, they protect them against municipalities, which helps create another corruption network that adds to the prices of items sold by street vendors. Peddlers do not need to be recognized legally at all, because they already have a presence in the economy. The question is how the government is supposed to support peddlers. What services is the government going to provide for these people in return and what economic problem is going to be solved after this recognition.

Informal Economy

Asked whether the recognition of street vending would increase employment, Raghfar said peddlers have always been included in employment statistics. 
“The employment rate released by official statistical centers is not very close to the reality. Informal jobs are mostly counted in employment statistics. Informal jobs account for the lion’s share of the economy, not only in Iran but in most economies. Informal jobs constitute 60% of Iran’s economy,” he said. 
“Shopkeepers pay rents and taxes, which can give rise to their dissatisfaction, as peddlers, who are considered their rivals, offer cheaper goods. Problems might arise between peddlers and shopkeepers over this issue. We’ll have to wait and see how the government would respond to this issue. Because one of the constant objections of the legal sector is that street vending is not curbed decisively while the legal sector’s operating costs continue to rise.”