SAIS Review of International Affairs

In a series of moves that are having grave consequences for the poor and working class, governments across the globe are going after some of the most dedicated and hardest-working citizens I have come across—urban street vendors.

Politicians in two leading Indian cities, Mumbai and Chennai, have vowed to wage war against hawkers, pressing forward with laws that would restrict who can sell on the streets and where they can locate their stalls. These proposals have drawn sharp criticism from Ajay Maken, India's Minister for Housing and Urban Poverty Alleviation.¹ In Guangzhou, China, municipal authorities have repeatedly set loose the chengguan—a squad of violent city control agents—on people who do business on the street. In March 2013, this created a brawl when one of the officers was photographed battering a female vendor in front of her young daughter.² In São Paulo, Brazil's largest city, the mayor has declared war on camelôs—unlicensed itinerant vendors—repealing a 15-year-old decree that had granted them space in the city and muscling them away from some of their most vigorous and historic markets.³ In Lagos, Nigeria, sub-Saharan Africa's chaotic megacity, the state government has criminalized street vending and taken bulldozers and axes to centrally located street markets and squatter communities.⁴

All of these punitive proposals focus on eradicating the informal economy. Since anthropologist Keith Hart coined the term in 1973, academics have referred to the businesses that exist on the street, without registering or incorporating or, often, paying taxes, and the neighborhoods of people who build for themselves on land they do not own, as the "informal sector."⁵ I prefer to see these places as outposts of a bottom-up entrepreneurial arena that I have dubbed "System D"—a phrase purloined from the former French colonies in Africa and the Caribbean, where people describe street hawkers as part of the économie de la débrouillardise, the economy of self-reliance, or, in street slang, Système D. Whatever the name, politicians seem to have decided that street vendors and shantytowns are an urban nemesis—and they have vowed to wipe out every visible trace of this informality.

This is a strange stance for public officials to take, because it is exactly these "underground" jobs that have been vital to the growth of their countries and cities. As the Organisation for Economic Co-operation and [End Page 65] Development (OECD) noted in 2009, casual, cash-in-hand labor has moved beyond agriculture—and more than half the rest of the workers of the world are now working off-the-books.⁶ The commercial might of Lagos, for example, accounts for one-third of Nigeria's gross domestic product, and the administration of State Governor Babatunde Fashola openly acknowledges that as much as 90 percent of the money produced in the city comes through informal channels.⁷ These System D firms are a major asset to the national economy and are responsible for the bulk of the jobs in the city. While the government might have a legitimate interest in attempting to recapture some of those revenues in its tax net, it has instead taken a punitive approach—sending squadrons of municipal workers to hunt down hawkers and destroy centrally-located shanty neighborhoods that were homes to many of these sidewalk entrepreneurs. The government even outlawed okadas—the one-million-or-so unlicensed motorcycle taxis that were the preferred and cheapest mode of local transit. While the bikes might have been dangerous and contributed to congestion, wiping out a million jobs seems bound to hurt the city's working people and hold back the city's economic growth. (Indeed, my conservative estimate is that, even if only one-in-ten okada drivers was particularly entrepreneurial and shuttled 50 passengers per day at 50 Naira—or about US$ 0.30—per journey, shutting down the industry has removed US$ 500 million annually from the city's economy.)

Similarly, it seems illogical that cities in India, which has more than 10 million sidewalk vendors, should be going after hawkers and street traders.⁸ Even in the wake of the global recession, India has remained one of the fastest growing economies. However, the formal economy has not been the source of job creation. According to a recent World Bank report, India's growth instead has its roots in increasing informality. Rather than hire workers under a formal system, employers increasingly adopted the rules of the informal economy to grow their businesses. Preliminary government figures show that "the share of [End Page 66] informal workers in total employment in organized firms" doubled over the decade—from 32 percent in 2000 to 52 percent in 2005 to 68 percent in 2010.⁹ This means that more than two-thirds of the jobs in formal companies are now, in some way, informal—paid off-the-books or evading official requirements. Construction and textile firms, for instance, now hire a majority of their workers as outside contractors rather than as employees—and this includes firms that do business with highly formal global brands, like Modelama Exports, which makes clothing for Gap (in the United States) and Next (in the United Kingdom).¹⁰ Increasingly, whether you are working for a company or working for yourself, informality is the only way to survive.

Former mayor of São Paulo Gilberto Kassab outlawed street vending in May 2012 with little warning and no due process. With the stroke of his pen, the mayor even revoked the 2,200 licenses his own administration had issued to entitle disabled people to sell on the street.¹¹ The city accompanied the ban with a series of paramilitary-style raids on the central shopping strip along Rua 25 de Março, a market that draws 400,000 people on an average business day, accounts for an annual turnover exceeding $10 billion, and, if incorporated as a single business, would rank among the top five entirely Brazilian-owned firms.¹² When the camelôs fled this central market, the cops followed them and staged another series of raids around the commuter rail station in the working-class neighborhood of Bras.¹³

Why are governments afraid of the informal economy? While they may not pay taxes, treating street hawkers as hardened criminals hardly seems appropriate. Do governments prefer no economic activity to economic activity that does not generate taxes? Have they forgotten that these jobs—even if they are informal—create opportunity and contribute to greater political stability by lowering income inequality?¹⁴ Have they not considered that the informal may not be the abnormal? After all, as journalist Henry Mayhew wrote about a crackdown on street sellers in Victorian-era London: "If ancient custom be referred to, it will be found that Shopkeepers are the real intruders, they have succeeded the Hawkers, who were, in truth, the original distributors of the produce of the country."¹⁵

Big firms, too, have acted informally when it helps the bottom line. UAC of Nigeria is a century-old conglomerate whose shares are traded on the local stock exchange. For one of its products—the Gala sausage roll—UAC has elected to bypass its usual supply chain and sell through a dedicated squadron of independent street hawkers. UAC knew it could make more money if Gala was available at traffic jams, bus stops, and crowded intersections, rather than in retail stores. However, no one from the Lagos authorities has moved to prosecute the executives of UAC. Similarly, Spain's Inditex, the closely held parent company of clothing retailer Zara, contracts thousands of unlicensed workshops around the world in order to keep up with the world of fast fashion, in which new designs showcased on fashion runways appear just days afterwards in stores.¹⁶ Rather than being hounded by the authorities for underground business practices, Amancio Ortega, Zara's founder, has risen to third place on the Forbes list of billionaires on account of his willingness to add an informal element to his business model.¹⁷ [End Page 67]

In Nigeria, India, Brazil, and China, anti-hawker sentiments seem to target urban migrants who have moved to cities from rural areas in search of work. Although politicians claim that new urban migrants will return home if it becomes more difficult to earn a living, they are mistaken. As long as Lagos, Mumbai, Guangzhou, and São Paulo continue to offer economic opportunities, migrants will continue to make the journey—even if, as in the Chinese case, they lack the hukou, or legal residency permit, that would officially entitle them to work in an area different from their officially-approved residence. The lure of the city will not cease simply because street-level jobs become riskier and increasingly subject to official suppression.

Additionally, Brazilian and Chinese officials have claimed that their crusade against street selling stems from a desire to crack down on the sale of pirated goods.¹⁸ However, no one who picks up a cheap football jersey with fuzzy print and runny dyes or a bogus and badly reproduced DVD of a first-run film thinks they are getting the real thing. People only buy the pirated items because they cannot afford the original—which means that the movie companies are not really losing out on new customers. Moreover, because the pirates are promoting their brands and films, you might say they are getting free advertising. Indeed, one executive of a famous and much-pirated brand told me that his company actually uses the knock-offs as market research: if one of their products is not being pirated, they know before they get sales data that it is a failure. Chinese writer Yu Hua offered a more nuanced perspective to piracy in a recent New York Times Op-Ed: "I am opposed to counterfeiting in all forms, but so long as poverty is a huge problem in China, I think it's only proper that my books be pirated. I make enough to support my family from the regular sales of my books."¹⁹

Another major factor of the global drive against street vending seems to reside in the endorsement of an unimaginative and unidirectional urban ideal. Every city falls for it—the idea that if it makes itself look like somewhere else, tourists with dollars will descend. In 2004, when Mumbai started a drive to demolish shantytowns and remove street markets, officials openly suggested that they were emulating Shanghai.²⁰ Lagos' State Governor Fashola pointed to another model of urban development—Dubai—as an inspiration for his megacity dream.²¹ Kigali, the Rwandan capital, recently endorsed a master plan designed to make it resemble Singapore.²² São Paulo, too, has used Singapore as a model. Before Mr. Kassab took office, a previous administration named its plan to bulldoze favelas and erect high-rises in their place as Cingapura.²³ Commentators suggest that Mr. Kassab, like mayors of other Brazilian cities, has pushed out street vendors because he [End Page 68] wants to spruce up the city in expectation of a boom in high-end tourism as Brazil prepares to host the 2014 FIFA World Cup and Rio 2016 Summer Olympics.²⁴

It is hardly a coincidence that Shanghai, Dubai, and Singapore—purported models of urban excellence—are authoritarian cities where big government and big businesses run the streets. There is little citizen empowerment in these municipalities. Rather, they are notable for central control of development decisions (Shanghai), for devoting development planning to attracting tourists rather than making life better for residents (Dubai), and for enforcing strict laws regarding personal conduct (Singapore). And that, it seems, is what some of the pressure on street vendors is about. As the locals told me in Guangzhou, the crackdown on street selling began in the run-up to the 2008 Summer Olympics, but it has continued because it has proved to be a valuable tool of social control—empowering municipal authorities to keep track of those who lack local residency permits and to crack down on what officials view as potentially destabilizing street life.

Politicians may think that they are adopting "best practices," bringing the world's most successful urban development strategies to their cities. But they have forsaken the idea that their cities deserve an opportunity to forge their own unique sense of what it means to be urban. Mumbai is neither Dubai, nor Shanghai, nor Singapore; nor is it Moscow, Paris, or New York. This was something that architect Christopher Alexander sensed more than three decades ago, when seeking what he called "a pattern language" in appropriate development. He cited the difference in street life in cities in the west and in the developing world: "in New York, a sidewalk is mainly a place for walking, jostling, moving fast. And by comparison, in Jamaica, or India, a sidewalk is a place to sit, to talk, perhaps to play music, and even to sleep. It is not correct to interpret this by saying that the two sidewalks are the same."²⁵

Street vendors and hawkers live on different sidewalks than politicians do. To politicians and elites, sidewalks are a frightening transitional space, one that begs for order and control. The hawkers, understandably, have a different perspective. For them, the sidewalks are their livelihood and their life.

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