Empowering the Informal Economy

Prominent economists have called on the Tehran mayor and competent authorities to pay more attention to the parallel informal economy which now comprises 28% of the job market in Iran
Most street vendors provide the main source of income for their households, bringing food to their families and paying  school fees for their children.Most street vendors provide the main source of income for their households, bringing food to their families and paying  school fees for their children.

Street vending forever has been an inseparable part of economies around the world, offering easy access to a wide range of goods and services in public spaces.

Most street vendors provide the main source of income for their households, bringing food to their families and paying school fees for their children.

According to the latest figures released by the Statistical Center of Iran (SCI) there are more than 2.5 million female heads of households in the country of whom only 18% have formal jobs. In other words, expansion of the informal economy, like street vending, has provided jobs for many women breadwinners.

Many studies have it that when urban management allow vendors to conduct their trade, it will have several positive impacts on poverty, employment, entrepreneurship, social mobility, etc.

Despite their contribution, street vendors face many challenges, are often overlooked as economic agents and unlike other businesses, are hindered rather than helped by municipal policies and practices, says the website of WIEGO (Women in Informal Employment: Globalizing and Organizing).

  Letter to Mayor, TCC

The issue of informal workers is once again in the spotlight as 10 prominent economists recently wrote to the Tehran Mayor and the Tehran City Council (TCC), asking them to reconsider the manner in which they handle street vendors, ILNA reported.

The economists include Dr Seyed Ehsan Khaandouzi, a board member of the prominent Allameh Tabatabaee University and director of the Bureau of Economics at the Majlis Research Center, Dr Jafar Kheyrkhahan, a university teacher at Mashhad’s Ferdowsi University, Dr Seyed Amir Sayah, a member of the Majlis Research Center and other well-known university instructors.

In the letter they noted, “Selling home-made products or products produced in small manufacturing units are common in successful economies. And selling of domestically-produced goods in places and markets established by the Tehran Municipality (TM) can have a positive impact on job creation.”

The economists urged the mayor and competent authorities to pay more attention to the parallel informal economy (informal sector) which reportedly comprises 28% of the job market in Iran.

According to the International Labor Organization, the informal employment sector comprises half to three quarters of all non-agricultural employment in developing countries.

The notable economists also pointed to the executive regulations promoting the ‘continuous improvement of business spaces,’ and article 16 of the relevant rules approved by the Cabinet in 2015 by which municipalities are responsible to provide suitable places and markets  to increase small producers’ access to the consumer market.

Based on the rules, each vendor who wants to sell domestically-produced products must be able to rent a place in the market at least for two consecutive months.

There are more than 4000-6000 vendors working in the Tehran subway alone, of whom 40% are female, according to Ali Abdollahpour, technical deputy of Tehran Urban and Suburban Railway Company (Tehran Metro). There is no precise data on the number of street vendors whose numbers have increased in recent years due largely to the sputtering economy, chronic  joblessness and the flood of migrants from across the rural areas.

  Contributions Overlooked

The TM, which had so far taken punitive measures to check street vending, announced plans in August to classify and organize subway vendors instead of resorting to crackdowns and other harsh measures. The municipal moves against the poor vendors has had mixed reactions mainly from shopkeepers.

But most residents believe the TM collecting billions in taxes and municipal charges must find better ways of running the capital instead of sending its agents (who are mostly loathed) to bash up the vendors and confiscate their goods.

In November last year, the so-called ‘urban discipline’ scheme was implemented by the municipality with an aim to curb street vending in the capital.

Under the plan, many vendors were rounded up from different districts of the capital following which the municipality of District 12 established a market in the vicinity of the Tehran Grand Bazaar with space for 150 vendors where they are allowed to sell their wares on Saturdays and Wednesdays. They were issued IDs and allocated specific time during the day to sell legally.

However, the market capacity is inadequate for the thousands of street vendors rounded up. At the time the TM had promised to increase the number of such market spaces for street vendors across the capital but so far nothing has happened.

Experts say the scheme will not be effective as long as it fails to consider alternative options of livelihood for the informal workers.

The International Street Vendors Day (observed globally on November 14), celebrates the contributions made by street vendors to their local communities and to national development.

  At Heart of the Debate

Urban attitudes and responses to street vendors vary around the globe, but everywhere they are at the heart of the debate about regulating the informal economy.

A study on “Street Vendors in Tehran; Research and Strategy” commissioned by the Ministry of Cooperatives, Labor and Social Welfare, shows that 94% of Tehran vendors are in favor of being organized.”

In many cities like New York and Paris, being a vendor is an accepted profession and specific organizations are responsible for organizing them.

International studies show that in Paris, with a population of 2.2 million, 97 daily markets are held during the week. In New York, 2,800 food vending licenses are issued per year, adding to the licenses of 4 other groups that comprise sellers of books, seasonal items such as umbrellas, and electronic goods.

In 2014, the Street Vendors Act was passed by the Indian parliament to protect vendors’ livelihoods. Based on the law, all street vendors above 14 years of age will be granted a certificate of vending. There are 10 million street vendors in India.

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