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There is no denying that one of the difficulties faced by city managers is the street
vendors problem. In most developing countries, they are a persistent issue for street and
sidewalk users. Since traffic congestion on the roads is caused by their business as well
as their casual setting and commercial waste create an unattractive urban landscape.
However there is a gradual shift of perspectives that focus on their economic potentials,
offering a smart city manager a variety of development opportunities. Therefore, the
majority of towns' current strategy of removing street sellers is counter productive at best
and inhumane at worst. This essay discusses the origins of the street vendor phenomena,
and some suggestions for managing them using international best practices.
OUTLINE
Abstract
Outline
I. Introduction
II Body
III. Conclusion
References
INTRODUCTION
Street vendors are further categorized as either mobile those who travel to different
locations during working hours or immobile those who remain at one location (Bhowmik,
2002). The mobile street vendor is further divided into fully mobile street vendors, who
continuously move, and partially mobile street vendors, who make multiple stops. An
illustration of the latter is some people who sell in front of schools early in the morning
and return there twice later in the morning and in the afternoon are examples of the latter.
Between certain times, the sellers travel to or settle in other locations where there are
many clients, such as marketplaces, neighborhoods, office buildings, etc.
Static street vendors typically expand into some sort of semi-permanent building to
support their business, although they do at the very least have a piece of fabric or plastic
mat spread on the ground to show their items. Setianto (2007) points out that the "plastic
blue tent" over wood benches and plastic stools is a typical sight. Dynamic Street
typically carries their goods on their shoulders or pulls carts. According to Bhowmik
(2002), women street vendors in India prefer to be fully dynamic, never stop or rest too
long at any one place, to avoid thugs or harassments. In Indonesia's current economic
crisis, some street vendors are discovered to be extensions of normal establishments,
despite the fact that the majority of them are independent traders. The merchants are
making an effort to complete the standard street vendor with this.. In a minority of the
cases some “successful” street vendors may branch out into possession of several other
street vendors outlets (Susanti, 2007).
BODY
The majority of people view street vendors negatively. Their invading of sidewalks
enrages pedestrians. Straight walking can be difficult at times. Then, people will have to
walk sideways through the narrow aisles that separate seller stalls. People are forced to
walk on the road when the sidewalks are too crowded, which is a very dangerous activity.
Due to their encroachment on the road, drivers and other road users dislike them. For
instance, Bandung's Oto Iskandar Dinata street's four lanes in front of Pasar Baru were
reduced to one lane, forcing unidirectional traffic. Sometimes, road encroachment is so
bad that traffic practically stops. Storekeepers loathe the road sellers for their unlawful
utilization of the shops' front walkways, which the road merchants then adjust to suit their
own requirements. This modification frequently entails installing a semi-permanent roof
to shield their goods from the sun and rain, both of which prevent sunlight from shining
on the stores and impede air flow. All of this makes the sidewalk less convenient and
discourages walking traffic from entering stores, which in turn reduces business. In
addition, the shops' operations are directly threatened in a small number of instances
when street vendors are offering goods that are comparable to those sold by shops. The
latter is generally true for sellers in conventional markets. They consider street vendors to
be direct and unfair competitors due to the fact that they prey on customers before they
even enter the market. In point of fact, street vendors oppose the relocation of other street
vendors, rejecting government attempts to relocate them unless other street vendors were
relocated simultaneously. In any other case, they would lose customers to new street
vendors who would take over the vacant spaces. Bandung.go.id, July 13, 2007) It is not
surprising that street vendors are regarded as a global urban scourge given the amount of
hostility that is directed at them (ILO, 2006). Because they damage city landmarks, city
administrators want to get rid of them. SV are filthy, congested, haphazard, and out of
control. They are undesirable components in well-planned urban architecture. As a result,
municipal governments frequently employ police powers to eliminate them in most
developing nations, including Indonesia. In most cases, these "street sweepings" to get rid
of SV were popular and supported by a lot of people. Road users, who were represented
by private car owners, have more political clout than street vendors due to their economic
strength, even if support was not overwhelming. Despite the fact that various parties
regularly "tax" street vendors to pay for protection or harassment prevention, almost none
of this money ever reaches the municipal treasury. As a result, there is no significant
direct economic benefit for the municipality from street vendors. Another reason for the
harsh treatment they receive from city managers is this. In Indonesia road sweepings are
finished by the Managerial Authorization Police. They launch surprise operations to seize
the street vendors' goods. The goods were either destroyed on the spot or taken away, to
be returned once the fines had been paid, or destroyed later if the owners didn't have
enough money to pay the fines. Typically, the captured street vendors were either
released following a brief "advice" session or held for a brief period of time. There aren't
many people the municipal government can keep in jail. Nevertheless, when confronted
with a street sweeping operation, many street vendors favored to flee. As a result, we
occasionally witnessed police officers pursuing vendors on the street. These exhilarating
pursuits frequently ended in poor air. The drained police officers turned out to be
irritable, particularly on the off chance that the road merchants offered verbal and
additionally actual protection from the obliteration of their properties. All parties
involved were harmed when violence broke out from time to time. The street vendors
become antagonistic as a result of the routine sweeping operations. Given the destruction
and seizure of property, this is reasonable. Street vendors sometimes got together to stop
sweeps, and some sweeps were canceled because of violent resistance. However, the
municipal government would come back later with more force, and for the time being,
the street vendors were driven off the sidewalks and streets. They always came back,
necessitating a second sweep by the Admin Police. It is safe to assume that this street
vendor harassment policy is not only inhumane but also counterproductive. The sweeping
process does not just affect street vendors. Additionally, the Admin Police personnel
suffered. They were given the task of harassing street vendors who are not actually
criminals, which is against human decency. They were aware that the street hawkers were
just trying to make a living. They are aware that the street vendors were just trying to
provide for their families. The Admin Police personnel will either become more brutal or
feel alienated as a result of the cumulative effects of ongoing sweeping operations,
especially if many of them resulted in violence. As a result, over time, it appears that this
method of harassment is a policy that benefits no one.
We have street vendors for a reason. Economics alone is the most common response.
Street vendors are the last resort if sellers prefer to be legitimate traders. Demand and
supply are desperate enough to keep them going. According to Bodhikong &
Moongjongklang (2004), SV meets the requirements of its customers, who are typically
the poor. PKL does not compel customers to buy. The rational decision to buy at SV is
made by people. Street vendors sell low-priced goods with a slim profit margin. In some
cases they sponsor their clients, by working extended periods upheld by neglected work,
generally relatives (Nirathron, 2006). Therefore, street sweeps will only temporarily
eradicate them. Street vendors will continue to be in demand as long as there is demand,
just like pornography, alcohol, and drugs. They will come back sooner or later. As a
result, repressive measures are regarded as detrimental: Both sides suffered a lot of
casualties for no apparent gain.
The informal sector's economics must be considered when discussing the causes of
street vendors on the supply side. The informal sector is a sector of the economy that
operates outside of the formal sector's rules and regulations, as most economics textbooks
discuss (ILO, 1972; 2005, Todaro). In the majority of developing nations, its size is
astonishingly significant, but it rarely receives the attention it deserves. It serves as a
vehicle for accommodating formal sector unemployed workers for a variety of reasons.
Most of the time, employment in cities that is relatively recent, high-tech, and urban is
what makes up the formal sector. It offers a higher wage than the typical rural job. As a
result, cities become magnets for rural labor.
Unfortunately, the majority of rural workers who are migrating lack the skills
required by modern occupations. As a result, they are ineligible for formal employment.
They can only employ themselves as their only source of employment if they want to
survive. They primarily serve the requirements of those who are just above them in the
social rung of urban society (the poor relying on the less poor). These customers are
insecurely clinging to their jobs, are at the bottom of the economic ladder, and barely
make ends meet on the outskirts of the formal urban sector. They, in turn, provide for the
requirements of "real" urban dwellers, those who are fortunate enough to possess the
skills required by the modern economy. Amazingly, this last group may have a standard
of living that is comparable to that of their counterparts in developed nations. Boeke's
dualistic economy thesis is forcefully brought to mind. This is the image that world
leaders aim to project whenever they use the term "global economy."
Oversupply of labor in the rural agriculture sector is another major factor in labor
migration between urban and rural areas. Population continues to rise while land does not
expand. As a result, there won't be enough agricultural land to support all of the rural
labor over time. Additionally, as technology advances, less labor is required to effectively
manage the land and produce even more. As a result, the agricultural industry is losing
more and more rural labor. They can only travel to the cities in the hope of improving
their lot. Over-urbanization, in which urban infrastructures are stretched to their limits, is
a third-world phenomenon. Squatters take over public spaces, public schools become
overcrowded, the crime rate rises, the air becomes polluted, and rivers become
contaminated, and cities become overcrowded with unrelenting traffic jams. The informal
sector is expanding rapidly, and street vendors first take over the sidewalks and then the
roads. This encroachment becomes unbearable on roads that are already scarce due to the
growing number of vehicles. Therefore, the public demands that street vendors's streets
be swept, and the local governments simply comply.
Surprisingly, the most recent addition to the informal labor force is – the economy
worldwide. Globalization leaders prefer not to emphasize this negative image. In the face
of fierce import competition, domestic businesses cut costs wherever they can. The
easiest way is to outsource some of the work and contract it out to the informal sector
(ILO, 2005). Since there is no labor protection, the informal sector uses cheaper labor:
Children cannot be hired without a legal contract, a minimum wage, health insurance,
unemployment insurance, or work safety standards. What happens to the workers in the
"formal sector" who have lost their jobs as a result of outsourcing? They are forced to
enter the informal economy for many of them. In fact, several economic studies in Asia
and Latin America found that a significant number of street vendors used to be employed
in the formal sector (Bhowmik, 2003; ILO, 2005 & 2006).
Based on historical evidence from developed nations, some economists initially held
that economic growth would naturally reduce and eventually eliminate the informal
sector. However, this "trickle down" view of progress has since been replaced. Todaro
(2005) argues that the prevalent viewpoint at the moment is that the informal sector in the
developing world necessitates immediate intervention, if only because the natural process
of reduction takes too much time. The informal sector is viewed positively from the new
economic perspective as a creative outlet and a brave representation of an economy in
survival mode. Workers in this industry are now regarded as heroes who have persevered
despite the odds. They are children, men, and women just trying their hardest to provide
for their families. They are men, women, and children surviving on the tough streets and
eking out a living in the asphalt jungle, making them particularly suitable for street
vendors. As a result, if street vendors are still viewed as a problem, repressive urban
policy seems like the wrong solution. One way to sum up their heroism is to say that they
lived on the edge of surviving. Their profit margin is about 7-8 percent, according to
recent research, but this is a gross rate because family members' unpaid labor is not
included in the cost. The net profit margin could be as low as one percent. According to
Rina Indiastuti (2007), this nominal profit may be as low as Rp 960,000 per year or Rp
80,000 per month. How is anyone going to make it on this? This is the kind of life that
will only be chosen by the poor and weak. Only the strongest survive on the streets.
However, they continue to exist without assistance from the government. In the case of
street vendors, despite being repeatedly pursued by the police, despite having property
confiscated, and despite officials and criminals demanding "illegal taxes." They are in the
informal sector because they do not have any legal protection at all. They may have paid
their daily tax in the morning, but the Admin Police may still sweep them off in the
afternoon. This occurs throughout the cities of developing nations, not just in Indonesia
(Bodhikong & Moongjongklang, 2004; 2006 Nirathron; ILO, 2006). In less developed
countries, the informal sector absorbs approximately 6 out of every 10 workers,
according to the International Labor Organization (ILO, 2004). Because of its size, the
informal sector plays a significant role in the overall economy. Therefore, street vendors
contribute significantly to the urban economy. They should no longer be considered
merely a nuisance to be removed from city sidewalks and streets. In 1999, just one year
into the crisis, 88% of all Indonesian labor was employed by small and medium-sized
enterprises , which were practically dominated by the informal sector. In 2004,
approximately 40 million small and medium-sized enterprises were dominated by the
informal sector (Mubyarto, 7/2004). The large businesses, those with credit from the
government totaling hundreds of trillion rupiah, failed. The owners fled to Singapore
with the majority of this nation's foreign exchange reserves after their collapse. They left
Indonesia with a lot of pampering, favorable regulations, and "buddy-buddy" treatment,
leaving behind debt and poverty. Small and medium-sized enterprises and the informal
sector remained, indigenous economic units that grew despite all odds during the New
Order regime's boom era. They were able to survive without the support of the
government (Mubyarto, 3/2004), credit, or regulations, but now they were relying on
them to fuel economic recovery and growth. In West Java, Indonesia, after the crisis,
small and medium-sized businesses employed 99 percent of the workforce, while large
corporations employed 1 percent. As a result, the informal sector, in this instance the
medium-sized enterprises, contributes significantly to regional employment. In the same
year, 2000, it was also the largest contributor to gross regional product, contributing 53.5
percent, compared to 46.5 percent for large businesses. 2003, Sutyastie Remi). As a
result, small and medium-sized enterprises and the informal economy are currently
saving the nation's economy. Regarding street vendors, a recent study from Jakarta
estimated that their monthly contribution was approximately Rp 13 billion (Kompas,
8/13/07). According to Bagdja (2007), the well-known Sunday Morning market in
Bandung's Gasibu neighborhood is estimated to have a half-morning transaction volume
of approximately Rp 3 billion. Additionally, they pay a "sanitary and protection" fee of
between Rp 3,000 and Rp 4,000 per day, and the city has thousands of SV. What happens
to all of this money? If they ever make it into the city's coffers, it will be a substantial
sum. It will be a financial representation of SV's economic potential. People's perceptions
of the SV and the informal sector were altered as a result of all this information. Their
image is now one of a productive member of society, a safety net for unemployed
workers, and a means of restoring human dignity damaged by the prolonged economic
crisis.
BEST PRACTICE
There is no question that for many people street vendors are a major nuisance. They
obstruct foot and vehicle traffic, due to their encroachment of sidewalks/pavements and
roads. They are unsightly, due to their slap-dash shelters or booths. Their booths and
shelters also reduce air flow and sun rays. They are dirty and disorderly. However none
of these problems defy fixing, if people really want to fix them. There are examples of
well managed street vendors that turn them into an urban asset. They can be organized
and regulated, such that they are clean and orderly. They can be a tourist attraction. They
can grow, expand and gradually join the formal sector. Below are some suggestions to
better manage street vendors and examples of best practices collected from around the
world that can be used as policy benchmarks.
1. First and foremost is a change of mindset. People make and enforce policies.
Without the correct attitude with respect to street vendors there will not be any sustained
policy effort to support street vendors . Thailand (ILO, 2006) and India (ILO, 2007) are
good examples of public concerted effort to support street vendors . They now have a
comprehensive national policy focusing on street vending. People still need to see how
this policy is implemented at the local level, but at least the legal framework is already
constructed.
2. Macroeconomics is a necessary factor. The conventional view of “trickle down
effect” is not totally in error. With a better economy the need for informal sector
employment will be less and, in turn, there will be less street vendors also (both mobile
and static).
5. Microeconomics : in the end the local implementation is what counts. One of the
most difficult obstacles to overcome is bureaucracy. For informal sector participants
generally and street vendors specifically, the cost of bureaucracy is often too dear. They
simply cannot afford to pay the price, so they never can step up to formality.
a) In Peru, the Institute of Liberty and Democracy (ILD) managed to persuade some
local governments to accelerate the registration process from 300 to ONE day. Since
2004 267,000 micro and small business units have become formal (registered and paying
taxes). Due to the increase in tax revenue municipalities now realize the economic value
of the informal sector. Prior to becoming formal these SME were illegally taxed and the
money never reached the public purse. This is one reason for much of the repressive
urban measures on street vendors : unrealized economic potential. (ILO, 2005)
b) In Lima, Peru, PROMDE (Defenders of Small Business Rights) helped the local
administration to reduce registration steps from 45 to 12. Thus reducing the processing
days from 70 to 1 . The number of registered SME has increased, from a stable number
for several years of 1,100 in 1998 to 4,000 in 2000. (ILO, 2005)
CONCLUSION
The “problem” of static street vendors or PKL is a problem besieging cities in all less
developed countries. It is part of a larger problem, the over-urbanization of less
developed cities, due to rural-urban migration. The cause of this migration varies, one of
them is an urban development bias, where scarce resources are channeled to the cities, at
the expense of rural economic development. The informal sector, of which street vending
is just one component, is a vessel that accommodates labor unemployable in the urban
formal sector. As such it is not as much a problem as a solution. People need to revise
their perception of the informal sector in general. Street vendors have a negative image in
the view of congested urban road users and pedestrians crowded out from the
sidewalks/pavements. As such people generally support local government efforts to
sweep them off the streets. However repressive municipal policy toward street vendors
(PKL), with the deployment of the Admin Police (Satpol PP), have been shown to be
counter productive. Street vendors exist because there is a market niche for them. They
serve an economic purpose. As such they are productive. They are an urban asset. They
deserve support, not only because they are part of the poor and the weak. Sustainable
support for SV/PKL (and for the informal sector in general) is only possible if there is a
change of mindset among urban decision makers. Favorable perspectives are the
foundation of good policy. It has been done successfully elsewhere, many times, and
Indonesian city managers have many examples to study from. It is time for all of us to
help transform street vendors from city blight into a city attraction, where the poor and
the unskilled can contribute productively to the society and the society supports them to
grow into a legitimate formal business.
REFERENCES
Bandung, 7/13/07.
Semarang
Boeke dan Burger, 1973, “Ekonomi Dualistic : Dialog antara Boeke dan Burger”,
Bhatara, Jakarta.
Bhowmik, 2003, “Hawkers and Urban Informal Sector : A Study of Street Vending in
Bodhikong & Moongjongklang, 2004, “Case Study Report : Problems and Possible
Solutions for Stall Sellers and Street Vendors”, Bangkok, Thailand.
ILO, 2005, “Informal Economy in the Americas : Current Situation, Policy Priorities and
Good Practices”.
ILO, 2006, ”The Informal Economy, Labor Protection and Street Vending : Cambodia,
ILO, 2007, ”Spicy Taste of Entrepreneurship : Street Food Sellers and Economic
Development”, ILO Report, Bangkok, Thailand.
Kompas, 2007, ”PKL dan HUT DKI Jaya”, Senin, 8/13/07, Jakarta.
Mubyarto, 2004, “Capres/Wapres dan Ekonomi Rakyat”, Jurnal Ekonomi Rakyat dan
Nirathron, 2006, “Fighting Poverty from the Streets : A Survey of Street Vendors in
Bangkok”, ILO, Bangkok, Thailand.
Pikiran Rakyat, 2002, “PKL : Sumber Devisa yang Terabaikan”, 11/4/02, Bandung.
Rojiful Mamduh, 2007, “Kunci Sukses Jombang Berhasil Meraih Adipura”, Kompas
8/6/07
Sutyastie Remi, dkk., 2003, “Analisis Ekonomi Jawa Barat”, Unpad Press, Bandung