The informal sector has acquired great significance over the years as a source of employment and livelihood for an increasing number of people, especially women, in both rural and urban areas of the developing world. It has particularly become a key mechanism for distributing goods and services to the urban poor.
The informal sector is made up of very small-scale units producing and distributing goods and services and owned and operated by largely independent, self-employed producers employing family labour or a few hired workers and apprentices. Informal sector enterprises are extremely diverse and are to be found in great numbers in all the main economic sectors, most of all in trade and services but also in manufacturing, construction, transport and urban agriculture. They operate with very little capital or none at all, and utilise a low level of technology and skills. Employment in these enterprises is highly unstable and incomes are generally very low and irregular.
It is important to note also that in many developing countries, the informal sector is often equated with 'parallel' or 'black' market activities, hence looked down upon by society. Consequently, public policy towards the informal sector is as ambivalent as it is contradictory - usually oscillating between benign neglect to periodic harassment. The prevailing attitude of officials seems to be given sanction by the range of activities that are seen to constitute what is popularly, and sometimes, pejoratively, referred to as informal sector activities: from home-based petty trade, commodity production or provision of services by poor women to similarly home-based highly-paid work by professional consultants; from 'recycling' waste and living off the refuse of others to hawking to trafficking in illicit goods to commercial sex work ('entertainment industry'.)
In many developing countries, and lately increasingly so in many industrialised countries, the vast scale and rate of growth of the informal sector presents a dilemma and a challenge for governments, social partners and civil society alike. A dilemma, as the informal sector encompasses employment situations which not only differ from those in the formal sector, but also infringe upon established rules and laws. A challenge, as it absorbs a large and growing fraction of the labour force and provides a "safety net" for the poor, finding themselves excluded from formal employment and income opportunities. The growing informalisation of the economy has caused a rise in the number of women who work - participation rates of women in the informal sector. The selfless back-breaking effort of women home-based workers is not recognised by those who make development plans and policies and allocate resources. We have no law on our statutes that recognises them as workers and we have hardly any surveys that claim to give any reliable statistics about women home-based workers. With no legal identity and no statistical data, hardly any resources would be allocated for them even by the most gender sensitive of planners.
The global economic recession is negatively affecting workers everywhere. Media and policy makers have focused on the rising unemployment of formal salaried workers. Less attention, however, has been paid to the impact of the crisis on informal organisations and workers, nor the consequences of new entrants into the informal economy.
In reality, economic downturns often affect the informal economy in the same ways they affect the formal economy. Like formal firms, informal firms are affected by decreased demand, falling prices, and fluctuations in exchange rates associated with economic crises. Like formal wage workers, informal wage workers face loss of jobs, or more, in formalisation of their employment contracts. Indeed, during downturns, informal wage workers are often the first to lose their jobs.
Informal workers, particularly women, tend to occupy the bottom of the global economic pyramid, with less protection and flexibility than their formal counterparts. Informal firms and wage workers, in times of economic trouble, have no cushion to fall back on and have no option but to keep operating or working. In addition, as more workers crowd into the informal economy, the net result is more-and-more firms or individuals competing for smaller-and-smaller slivers of a shrinking (informal) pie. Unemployment, in this instance, is eclipsed as an issue by increasing impoverishment - the working poor becoming poorer.
A holistic approach in community development is required as far as the home-based workers’ (HBWs) issues are concerned. It is not possible to alleviate poverty by just providing micro credit, giving literacy training or providing a health facility. It is also important that all the members of the society benefit equally. Obviously an NGO, no matter how big and experienced it is cannot gain expertise in everything and provide the full range of services. Thus, I believe Pakistani NGOs need to network, both to share their knowledge and experience and to cooperate in order to make a real difference. Programs like the National Rural Support Programme (NRSP), Punjab Rural Support Programme (PRSP), Benazir Income Support Programme (BISP), social welfare schemes all need to cater to the needs and betterment of HBWs and specifically women. It is also important to share experiences in marketing, research, information etc., with other organisations and women home-based workers. Organisations involved in credit need to extend their entrepreneurship training to other target groups. The NRSP and all its provincial chapters can share its network and many years of experience and resources with the other NGOs. Likewise, organisations working on advocacy need to strengthen their network not only at the national level but also at the grass-roots level.
More generally, it is believed that each of the programmes would benefit from regular strategic reviews and from re-assessing their overall missions. They should have regular evaluative exercises, including discussion of results and actions to be taken. Training is an important component of all the programmes and which would be strengthened if they involve more awareness-raising and focused on women's human rights, as well as existing labour legislation. It is not very easy to change the exploitation and life quality of home-based workers in the existing societal system. It is also important to change the attitude of society to the issue. It is not possible to break the vicious cycle that home-based workers are in without the support of their families and communities. Women may choose to work at home, but unless they are allowed to go out of their houses and be exposed to the "real" world and the "market", they will not have the information to protect themselves. Unless Pakistani attitudes about women in public space change, families will never want their women to be out alone. HomeNet Pakistan is an umbrella organisation of organisations working with home-based workers and advocate especially for the recognition of home-based workers as workers and the implementation of their social security right. Yet many more steps should be taken to develop strategies to monitor the businesses working with home-based workers. Moreover, it is not possible to change the system exploiting home-based workers regionally or even nationally. It is important to take international action.
In the context of policy :-
The government should ensure, in collaboration with other concerned stakeholders, that skills training enhancement initiatives for HBWs are undertaken on an outreach basis to their villages and urban slum settlements to address the constraints of mobility and poverty and the "triple burden" of work in the context of women house-based workers (WHBWs).
The government should further endeavour to see that HBWs, particularly the WHBWs i) gain easy access to comparatively cheaper credit through several ongoing programmes; ii) their issues of easy access to markets for the products will be effectively tackled, thus eliminating the fruit of their labour denied in this area through the malpractices of the 'intermediaries' and 'middlepersons'; iii) non-industrial handicraft goods are promoted through purchase and utilisation in public sector offices as affirmative action (e.g. public sector office furniture, furnishings, fixtures, stationery items, official awards, prizes and gifts); iv) they enjoy the core labour standards (CLSs) along with the rights and entitlements in addition to all rights and benefits available to other wage earners performing similar work, under the existing or any future laws and regulations, and v) social security benefits currently applicable only to workers in the formal organised sector of employment are extended through enactment or amendment in the laws relating to Employees Social Security Institutions (ESSIs) in the provinces. The government should devise a mechanism for the mandatory and free registration of all HBWs, in all public and private sectors of the economy, especially industries, through a tiered system at the federal, provincial, district, tehsil/taluka and union council levels. The details of this mechanism should be formulated in consultation with all the relevant federal ministries and provincial departments, in order to avoid duplication and to promote coordination. Registration should automatically entitle HBWs to social protection and insurance provisions.