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The strengths and weaknesses of the informal economy and how the immigrant business space is initiated and expanded.
Immigrants working in the informal economy, such as petty merchants, are often seen as criminals, but can actually bring many benefits to the local economy.
About 60% of the world’s population participates in the informal sector. The informal sector is most prominent in emerging and developing countries, but it is also a significant part of the developed world.
Modern cities tend to exclude or marginalize informal economic activity. Informal economic activity is often denounced as unsanitary and is a hotspot for illegal business and crime.
Yet this negative perception is slowly changing and new approaches are being introduced to better manage the informal economy.
In South Africa, over the past decade, national and local governments have recognized the importance of the informal economy to providing significant employment opportunities. As a result, authorities are adopting more progressive approaches, such as involving local councils in managing the informal economy and considering the informal economy in local planning.
Their main challenge is to develop innovative, inclusive and supportive policies that recognize the value of the informal economy and the people who work in it.
Migrant entrepreneurs may be excluded from the planning and policy-making process, but despite exclusionary immigration policies and strict crackdowns, they manage to carve out their own space within South Africa’s informal economy. I have succeeded in creating it.
First of all, they have no choice. Due to the lack of employment opportunities in the formal labor market and lack of comprehensive immigration policies, immigrant entrepreneurs from African and Asian countries find themselves in South Africa’s central business districts, mainly Johannesburg, as physically demanding and Participated in informal business, often dangerous.
Locals also tend to avoid these entrepreneurial activities because of their cultural beliefs and negative attitudes, resulting in more opportunities for immigrants. This is known as cultural block theory.
The lack of state support and protection forces immigrant entrepreneurs to strengthen their own support networks with their compatriots and other immigrant groups. Social capital and social networks are equated with the legal and political rights enjoyed by local people. Language barriers, a lack of sharing culture and common history with locals, and even importing cultural institutions from their home countries have strengthened ties among immigrants.
One result is the concentration of immigrants in certain sections of the city due to dense business and social networks. Over time, the process develops into an enclave economy.
Many African and Asian immigrants have settled in Gauteng. The province includes Pretoria, Johannesburg, and many of the mining and industrial cities that support South Africa’s economy.
According to a 2017 study conducted by South African urban planner and visiting senior lecturer at the University of the Witwatersrand, Dr. Tanya Zak, cross-border merchants traveling to South Africa from neighboring countries spend an estimated R10 billion (581 million million USD). ) held annually in the city center of Johannesburg.
Individual cross-border traders from neighboring countries such as Zambia can inject up to R50,000 (US$2,884) into Johannesburg’s informal economy, Zack said. In Gauteng alone, there are about 50 organizations in 19 districts that bring migrants and their goods to Johannesburg for business.
The informal economy also creates opportunities to attract immigrants from across Africa and Asia. The plus is that it is relatively easy to start and run your own business in South Africa’s informal economy.
South Africa is a huge African economy, and South Africans have relatively high purchasing power, little tendency to fight over prices, and a strong appetite for consumption. may compete with, but if the business fails, it is more likely to bounce back.
Diversity also flourishes. Many immigrant merchants choose to offer their fellow immigrants familiar products such as food and clothing belonging to a particular ethnic or national group. Cultural events and local attachments help create demand for products offered by ethnic groups.
But South Africa’s official policy is to try to keep informal businesses in line and become part of the ‘formal’ economy.
There are several candidates for this path, but the government’s approach does not recognize the diversity of the sector, or the fact that the efforts of many survivalists will never be more than that, but the We must respect the role they play in doing so.
The government’s 2017 draft white paper on international migration removed migrants’ labor rights, leaving them in a more precarious position. Other rules and regulations have also been drafted that seek to limit the right of foreigners to trade in informal business.
In addition to preventing local residents and immigrants from unlocking the economic potential of the informal economy, changes in social and urban patterns raise ethical and practical challenges regarding the governance of space, rights, and representation. raise.
Ignoring the role of the informal economy and policing immigrant businesses in the informal economy ignores the additional benefits they can bring, such as reduced crime. In Johannesburg and other South African CBDs, migrant entrepreneurs are making neighborhoods safer and turning formerly crime-ridden areas into business districts.
For example, Ethiopian immigrants contributed to the economic and physical transformation of Jeppe, Johannesburg, investing money, leasing and building real estate, and linking the CBD and township economies.
Ethiopian immigrant merchants in Port Elizabeth interviewed for one study bought dilapidated buildings that once housed drug dealers and criminals and turned them into supermarkets and guest house businesses. He not only created job opportunities and boosted the local economy, but also indirectly contributed to crime prevention.
Migrants may also challenge gender dynamics. There is evidence that migration boosts women’s economic and social emancipation. Migration and urbanization therefore remain powerful destabilizing processes that offer opportunities to renegotiate generational and gender hierarchies.
However, this is not always the case in South Africa. For Ethiopian women, entrenched gender power relationships from the homeland persist. This is largely due to a lack of proper documentation coupled with increasingly restrictive labor market rules for informal business. South Africa’s anti-immigrant policy does not help. But other factors reinforce the hierarchy of power relations, such as security concerns that force female immigrants to turn to men for protection. Male immigrants in Ethiopia may come to dominate socioeconomic and cultural institutions originally run by women, resulting in a role reversal.
In the past, local governments dealt with the informal economy with various ordinances targeting retail traders. This approach was based on a restrictive view of the “problems” of the informal economy. These negative perceptions contribute to the marginalization of this part of the economy.
This is reflected in the lack of adequate reference to the informal economy in many formal plans and economic strategies.
Moreover, local government planners often see the informal economy as a matter of space (where to place markets) rather than as an integral part of the local economy and a key factor in preventing rising unemployment. claims.
The reality is that the informal economy is an important part of nearly every regional economy in South Africa and cannot be achieved if the integration planning requirements are ignored.
We need to change the way we discuss urban development. To measure the accessibility and inclusiveness of a city, we first need to understand how people use the city to fulfill their aspirations. The informal economy requires recognition that it benefits a segment of the population due to its low entry costs. They make opportunities accessible to people.
Providing amenities and infrastructure in line with acceptable rules and regulations, instead of “formalizing” informal activities to fit a standard city, is a huge part of the informal economy. It can help you unlock your profits.
(This article is not edited by Devdiscourse staff and is auto-generated from a syndicated feed.)
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