City to impose zone-based levies on vendors

Damar Harsanto, The Jakarta Post, Jakarta

The Jakarta administration will impose zone-based fees on the over 141,000 street vendors operating, and critics say causing traffic, in the city.

"This way we can regulate them and provide them with better assistance," City Cooperatives, Small and Medium Enterprises Agency head Sukri Bey told The Jakarta Post on Saturday.

The new policy, which will begin in September, will create a zoning system in which vendors in higher mobility areas will have to pay higher fees.

The fees will range from Rp 3,000 (some 30 US cents) to Rp 10,000 per day, per standard-sized two-meter-by-two-meter stall. Higher fees will be charged for larger stalls.

Among the areas that will be zoned as strategic locations are Senen and Tanah Abang in Central Jakarta, and Jatinegara in East Jakarta.

The administration hopes this new policy will replace the unofficial policy of unauthorized parties and corrupt officials extorting money from vendors.

The administration officially stopped imposing fees on street vendors in 1997 when the economic crisis struck, putting lots of people out of work and forcing them into the informal sectors, including working as street vendors.

As the number of vendors grew, according to Sukri, the city administration tried to curb the growth by reimposing fees, especially in high-traffic areas.

The agency also said it would provide bank guarantees for street vendors who wanted to obtain bank loans.

"Hopefully, the street vendors will be able to expand their micro-businesses into either small or medium businesses," Sukri said, adding that some state banks and city Bank DKI had agreed to channel credits to vendors that received guarantees from the administration.

Last year, banks channeled a total of Rp 220 trillion in credits to businesses in the capital, of which only Rp 20 trillion, or 10 percent, went to small and medium enterprises (SMEs). Experts agree that SMEs should receive more loans, particularly considering that they account for 60 percent of businesses operating in the capital.

SMEs provide jobs for more than four million people in the city, with an average salary of Rp 700,000 per month.

The chairman of the Jakarta chapter of the Indonesia Street Vendors Association (APKLI), Muhamad Muhdi, demanded the administration pass a regulation giving vendors a legal basis for their operations.

"The allocation of space for street vendors is not clearly covered in any bylaw or gubernatorial decree," Muhdi said.

Muhdi said this weak legal basis made vendors vulnerable to eviction and raids by the City Public Order Agency in the name of city beautification, sanitation and transportation projects.

The APKLI estimates that with an average of 15 residents being served by each street vendor, more than 2.1 million Jakartans, mostly low-paid workers, enjoy the services provided by street vendors.

Jakarta has a total population of over 10 million.