iii. Support to the development of the Informal economy
One of the most effective ways of combatting poverty is by
examining ways of enhancing the quality, the productivity, and the social
protection of workers in the informal economy. An action programme in this field
must include the following six main interrelated elements:
Improving the enabling environment and social protection
in the informal economy
Appropriate measures must be taken to ensure that policies are
aligned with the more productive development of the sector. Rules governing
zoning, registration, access to land, and work sites must be reviewed in the
light of their probable impact on the workings of the informal economy. The
overall regulatory environment relating to such issues as legislation, taxation
and fees will also need to be streamlined and made more sector-friendly. This
calls for actions to strengthen the capacity of the authorities responsible for
drafting these regulations or designing policies affecting the sector.
Efforts must be made to promote collective action at the
grassroots level by strengthening or supporting the formation of associations
based on sectoral activities within the informal sector. This will assist
informal sector operators to articulate their needs and provide the basis for
participating in policy and programme design and implementation which affect
informal sector workers.
Increasing access to financial services and marketing
opportunities
Sub-section ii, covers the proposed suggestions in this
domain.
Promoting industrial and manufacturing activities and
improved technologies
A particularly important sub-sector of the informal economy is
the production of manufacturing and industrial products and the provision of
engineering services such as repair services largely for the benefit of the
poorer segments of the population. Hence he promotion of this sector is not only
aimed at raising the productivity and incomes of the poor producers, but also
improving the consumption and welfare patterns of the poor. Support for the
upgrading of technical managerial and marketing skills for producers of this
sector will also be essential, as well as easier accessing of production inputs.
Pilot experiences show that there is great demand for business advisory
services. Most of the NGOs who work in the informal sector lack the capacity to
develop training programmes on business management and business practices. The
provision of consultancy services in the fields of business regulations,
management and skills training would be highly useful and appreciated by NGOs
and informal sector operators.
Improving sectoral backward and forward linkages and
subcontracting
Productivity and employment will be enhanced and poverty further
reduced, if both forward and backward inter-linkages between formal sector
enterprises and establishments in the informal economy are specifically
identified. The role of the state as a major contractor could be a major
instrument in this connection, by encouraging its larger contractors to
sub-contract to informal sector operators.
Intensifying infrastructural development using
labour-intensive technology
Section 2.2.4, illustrates the mechanisms that could be adopted
for this sector.
Improving basic education, technical skills and managerial
training
Section 2.2.1, includes strategies to assist in the development
of the human resources in the informal
economy.
