Now what really is the informal sector?

The term informal sector was first mentioned by Arthur Lewis in a development model in the 1950’s. The view was a purely economic one where it was expected with the right mix of policies and resources traditional poor economies would transform into more dynamic affluent ones. It was used in the development arena from the 1970’s onward. First, in a study on Ghana and then later in a UNDP employment mission report in Kenya.(sethuraman 1976) It was observed that the traditional sector did not fall off but it evolved into profitable and efficient enterprises. It no longer resembled the traditional sector of the 1950’s nor did it resemble the modern economies thus leading to the name informal sector.  Since then the term has gained popularity in increasing reports. Between the 1980’s-1990 there was great confusion between academics however as to what the informal sector really entails as it could be perceived differently. This stems into four different schools of thought, dualist, structuralist, legalist and the voluntarist. These perspectives combined give a holistic view.   A more recent definition is ‘’The informal sector or informal economy is that part of an economy that is not taxed, monitored by any form of government or included in any gross national product(GNP), unlike the formal economy.’’(the informal economy: fact finding study 2011)

I think that peoples’ general conception of the informal sector locally is an academically uneducated one in general. Take into consideration the picture below.

Doubles vendor in Curepe

Most people in Trinidad would think of the informal sector as illegal activity and dirty work. Now if you mention to the average Joe in Trinidad that the vendor in the picture above is actually a member of the informal sector they would think that he somehow smuggles drugs or does some other illegal activity. I think that this is the general misconception when people hear the term locally and I cannot really blame them because I was only aware of the concept at form 6.

you may be wondering what validates the vendor as being a member  the informal sector? Firstly he does not by any means own the space upon which he is using for his stand nor does he pay any sort of rent for that space. Secondly there are no direct taxes on his form of business, no NIS, no deductions. This also ties into the point that governments do not monitor this form of business and it is not taken into consideration when calculating GNP.

The informal sector also provides a means by which persons could try to alleviate themselves from poverty. The entrepreneurial skills that these persons develop are most impressive. Many vendors claim that they are more than able to make ends meet and ask why they should pay tax on their business. On the flip side other vendors cannot boast of this success and say even though there are benefits to the street vending they would much rather have a solid paying job.

The more you delve into the matter of the informal sector the more complexities you discover. In the urban setting some see it as a boon and the others a curse, even the vendors themselves. I think it is more than a matter of perspective and opinion. We interact with these persons nearly everyday whether directly or indirectly. That irresistible hot doubles with slight pepper on an early morning and the classic red solo as depicted or a shake of head in dismissal as the vendors haggle us to buy their wares. Even to the fleeting glance that is passed as we rush to the beat of our busy schedules. I think that we as a Caribbean people have just accepted this as a norm and never really thought twice about the informal sector which is a shame. There is a lot to be learnt, so come along with me and let us continue this journey.  

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