According to the Central Statistics Agency (BPS), the unemployment rate decreased in February 2008 compared to that in February 2007. How could that be possible? The reason is the number of unemployed absorbed by that tough and self-reliant sector - the informal sector.
Facts show that annually, there are 70 percent of people working in the informal sector and only 30 percent people working in the formal sector. It seems unbelievable.
But, if you look around your neighborhood, you will understand. Let us pay attention to our urban environment. Whether we realize it or not, there are actually many members of the informal sector all around us. One of them is the vegetable hawker moving from one housing block to another with his trusty three-wheeled cart.
If we take a closer look at these people's activities, you may notice an interesting phenomenon that occurs in areas such as Kelapa Gading, North Jakarta. In the area, no more than 1,633.7 hectares wide, there are five big modern markets selling the same things as the vegetable hawkers: fresh vegetables, fish, meats, fruits, etc. The vegetable hawkers compete not only with modern markets, but also with mini markets and traditional markets as well.
But, despite the growing number of modern markets, the number of vegetable hawkers continues to increase. So the small business players in this sector with their entrepreneurial skills, and so to their customers, are actually benefitting. These poor people realize they are in a marginal position.
But never underestimate them. If we observe them closely we will find how robust these people are, because they are able to survive despite the competition from both traditional and modern markets.
Since they hail from outside Jakarta they rent very cheap houses or rooms. They are not only struggling for their livelihoods, but also against their competitors. The amazing this is that despite the competition, they manage to find their own markets and loyal customers, no matter what social strata the customers come from. Each market has its own specific section. Vegetable hawkers have their own section as some people only need small amounts of vegetables and other products.
The customers feel comfortable with the cheaper prices, their proximity and the good quality products that the hawkers offer. Initially, I thought a comfortable environment, one-stop shopping centers and the need not to bargain would have attracted people to shop at modern markets and abandon the hawkers, but this has not happened.
The only obstacle they face, they say, is financial. They cannot apply for soft loans from the banks as they have no indemnity to guarantee the loans. The way is to borrow money from a so-called juragan (private creditor).
Further research is needed to avoid generalization. However, this may also be the case with other informal sector activities; facing competition, eviction, minimum funds and other obstacles, but, they are still standing and are strong despite their minimal resources.
They take these resources and rapidly increase them, as long as they have the opportunity to do so. On the one hand it is one of the ways to survive, but on the other this is a small entrepreneurial endeavor that, someday, will grow and become a big business.
Amid global financial disasters, the state needs to give more attention to the hawkers' endeavors and not just evict them. Eviction of the street vendors is undoubtedly evidence of the government's disregard of this sector. Despite its existence as a savior to absorb the unemployed, this sector generally has often been forgotten and "marginalized" by the state. The government needs to create more regulations in order to solve the problem.
Please remember this sector is a savior during economic crises not only for those who lack education and skills but also for those who suffer due to employment termination.
The lesson learned from Singapore, to build and to resettle the food hawkers, perhaps could be one to consider. Another example of how to promote the status of the informal sector is in Malaysia, who brought this activity into the formal sector so that no eviction was required.
Yet, one should not just adopt those examples blindly because they worked in their home countries; sometimes they need adjustment to be applicable elsewhere. Perhaps one thing that should be considered is to identify what is needed through wider participation in the planning process.
The writer is a citizen of Jakarta who has researched the existence of vegetable hawkers as part of the informal sector
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