In many developing countries, the informal economy is at least as important as that economy which can be more easily captured in a country’s GDP measurements. For a number of families in Africa, Latin America and the Caribbean,
the informal sector is what has allowed them to survive, despite a world economic crisis and sinking national economies.
Women in Informal Employment: Globalizing and Organizing (WIEGO), a global action/research/policy network conducting research on this sector has defined the informal economy broadly to include the range of activities, enterprises and workers that are not regulated or protected by the state. This definition encompasses the vendors of products and services who conduct their business on busy city streets as well as producers and service providers who work from their homes.
In the developing world, the overwhelming majority of these informal workers are women. Sixty percent or more of women workers in the developing world are in the non-agricultural informal sector, reports WIEGO. Of these, a significant subset is involved in cross-border trade. The gender agenda in trade is incomplete without policies and strategies that address this group of women.
In the Caribbean, informal traders — known as “hucksters” in Dominica or traffickers in St. Vincent — ply an inter-island route on boats carrying produce to other islands. “Higglers” in Jamaica are both the backbone of the island’s agricultural marketing system as well as the “informal commercial importers” of cheap products from all over the world. While years ago they could be seen on flights between Aruba, Miami, or Panama, today’s favored source is China.
Data on cross-border informal traders is understandably hard to come by, but here are some compelling statistics:
- In sub-Saharan Africa, 60% of the self-employed women working outside of the agricultural sector were involved in some aspect of cross-border trade (ILO, 2004)
- The average value of informal cross-border trade in the 15 countries of the Southern African Development Community (SADC) was US$ 17.6 billion per year and 70% of informal cross-border traders are women.
- In West and Central Africa, women informal cross border traders “employ” 1.2 people in their home businesses.
These women traders frequently operate in the shadows with inadequate recognition and support from the formal economy.
A USAID summary Women in Cross-Border Agricultural Trade highlights the discrimination that women face in the border process:
- Women in India wait 37% longer than men to see the same customs official.
- In East Africa, women cross-border traders are forced to pay larger bribes than their male counterparts or to provide sexual favors to border officials who detain the trader or confiscate her goods.
- In Central Africa, customs officials commonly perceive those who trade in small quantities as “smugglers,” even when they pay the appropriate duties.
The very informality of their operations is also a challenge:
- Banks rarely cater to their needs and they have limited access to formal credit.
- They often do their trading on sidewalks, where their goods may be confiscated at a moment’s notice.
- In many countries, they operate in unsafe environments that lack such basic facilities as proper lighting and adequate bathroom facilities.
- Caribbean informal traders ply their agricultural produce on unsafe and unrefrigerated boats.
These realities pose challenges for the economies in which they operate as well. Money circulates outside of the formal banking economy. Customs authorities struggle to enforce requirements for food safety. Neither the positives nor the negatives to the economy of these informal traders are adequately captured or addressed by mainstream trade institutions and policies.
As the informal sector grows and thrives in the midst of the current global economic crisis, institutions have begun to focus resources on learning more about the sector and particularly the role of women. Entities such as the International Labour Organization (ILO) and WIEGO are collecting data and generating research and policy studies on the informal sector.
In the area of trade:
The World Customs Organization (WCO) is seeking to learn more about the sector in a June 2013 Conference on Informality, International Trade and Customs.
The International Trade Center — whose mission includes provision of solutions to support the growth of exports from developing economies — has developed a series titled, Case Story on Gender Dimension of Aid for Trade.
Among other things, the emerging research points to the growing artificiality of the distinction between “informal” and “formal” traders. When traditional baskets produced by Rwandan women are being sold in Macy’s, these distinctions can seem outdated. We have also indicated, earlier, how operating outside of the formal import structures puts both the traders and consumers at risk.
At the same time, this approach requires increased and focused attention by policymakers, financing institutions, etc. on elevating the legal status, improving working conditions, and generally providing more support for these informal traders.
It is also important to recognize their place in the growing regional integration movements. Rules may need to be adjusted to accommodate their role and communication strategies extended to embrace these sectors.
In November, 2012, women traders from Burundi, Kenya, Rwanda, Tanzania, and Uganda formed the East Africa Women Cross Border Traders Association. With a combined population of over 133 million (2010 figures), these countries are implementing a common market and negotiating formation of a monetary union. Formation of this association is a timely development and a model for other developing country regions.