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INFORMAL INFORMAL ECONOMY

 

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OUTLAWS
Unrecognised. Unauthorised. Unwanted?

Illegal cities
Illegal incomes
Illegal land
Illegal houses
Illegal water
Illegal electricity
Illegal businesses
Illegal economy
Illegal jobs
Illegal lives
Illegal maids
Illegal drivers
Illegal cooks
Illegal vendors
Illegal masons

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Our Constitution. Their Rules.
Did you know that the lakhs of slums of all over the world are all illegal cities? That’s because no government recognises them. And they comprise of 1 billion dwellers, making them illegal too. Why illegal? Well look at how an illegal city is built in the first place. Usually a group of squatters occupy a large stretch of abandoned or unused government land. With time, more squatters come and you get a large colony that becomes a permanent fixture of the landscape. There are no title deeds or legal papers, so the land on which they live is termed illegal.

The local authorities recognise the houses as illegal because they don’t meet the standards for lighting, ventilation and sanitation. Water for cooking and washing comes from an unauthorised source such as a river or an illegally dug well or an illegal water connection. Even the electricity is 'stolen'.

Small enterprises spring up which don’t follow official laws on labour, health, safety or environment. Even the food that local vendors sell is illegal, because they aren’t authorised.

Our Country. Their Cities.
But it is not that the people who live in these cities are deliberately breaking the law. Since 1950, the number of people working in developing country agriculture has declined by 20-30 per cent. Many are forced to abandon villages. Villagers also see migration as a way to bring some of the city’s wealth to the village. Most migrants see city earnings as an addition to their meager rural income,
and their stay in the city as temporary.

One in every six citizens in the world is illegal

GROUND REALITIES

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Over 90% of India’s workforce earns its livelihood in the informal sector.
Over 94% of women workers in India fall into this category.

But once they come to the city, they have no choice but to build, buy or rent an "illegal dwelling" as they can’t afford the cheapest legal house available. So looked from another angle, slum dwellers have found their own solutions when the state failed them. These unnamed millions then become the most important organisers, builders and planners of the new urban reality.

Since it is the State that recognises these dwellings as illegal,there is very little it does to change the situation. Most governments’ attitude is either of indifference or repression. And that is why slums are shut out from basic infrastructure.

Our Problem. Their Solution.
The problem is that most of the world regards the informal sector as something illegal which has to be eliminated because it "undercuts" the formal sector.

However, the formal sector has failed to give enough jobs to most of the world. Informal economy experts feel that the formal economy manages to employ only 25 per cent of working people. Slum-dwellers and peasants comprise the remaining 75 per cent.

So reducing long-winded regulations and doingthe financial problems of the so-called illegal world. way with large under-productive public sector enterprises in favour of these informal workers could hold the key to a new economy. The illegal world is actually full of micro-entrepreneurs who can provide goods and services at lower costs.

A case in the point is the SEWA (Self Employed Women's Association) Bank. The bank started in Ahmedabad in 1974 with a capital raised from 4000 slum women. Today the bank has funds in excess of $2 million and provides housing loans for slum dwellers. It also runs programmes that provide basic infrastructure like roads, electricity and water, to people living in slums all over Ahmedabad.

Now imagine if every slum in the world decided to launch such a bank? The informal economy might then overshadow the formal one and take care of most of the financial problems of the so-called illegal world.

Our Economy. Their Earnings.
Slums and slum dwellers are not part of the formal economy, but still power the city with their goods and services. Think it over. Maids. Labourers. Drivers. Masons. Food and vegetable vendors. Hawkers… The list is endless. While all of these may be living an illegal existence, they provide you and the whole city with a host of cheap goods and services. They are part of the Informal Economy. But what exactly is that? Economist Teodor Shanin says that the concept emerged in Africa 25 years ago. Researchers noticed that there was no economic explanation for how the majority of the population survived. They didn't own land. They didn't seem to have any assets. According to formal economics they should have died of hunger long ago, but they survived.

The researchers found that their way of life was completely the opposite of how a human being in an industrial society survives. They didn't have a job, pension, steady place to work or regular flow of income. Families held a range of occupations from farming and selling in the market to doing odd jobs or handicrafts.

Their aim was survival rather than the maximisation of profit. Rather than earn wages, labour was used within family enterprises, or shared out among the village. This way of life was brought to the slums. And today most of the world may be regarded as being part of the informal economy!

According to formal economics they should have died of hunger long ago, but they survived.

 

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