Not quite entrepreneurs, not quite excluded
This blog was written by postgraduate student Âurea Mouzinho as an assessment for the module ‘Global Commodity Chains, Production Networks and Informal Work’, and selected for the blog by Dr Alessandra Mezzadri.
Along the 22 kilometres that stretch between the iconic Largo da Independência in Luanda’s city centre and the special industrial zone in the district of Viana, the presence of informal street vendors is ubiquitous. On any given day, as lines of cars fill up Deolinda Rodrigues Avenue during rush hour traffic, a multitude of men and women, known locally as zungueiros and zungueiras, venture into the narrow spaces between the vehicles attempting to sell a variety of products: roasted cashew-nuts, fresh fruit, cleaning products, clothing items, balloons, cold beverages and even puppies.
Although there are no official statistics on the size of the informal economy in Angola, the duplication of this scenario throughout the capital attests to the importance of street vending and other forms of informal economic activity as the main source of livelihood for many city dwellers, particularly the poor. According to the ILO’s most recent estimates for Sub-Saharan Africa, on average, the informal economy represents 66% of non-agricultural employment; with women and the youth being over-represented in the sector.
Historically speaking, government responses towards informality in Angola have varied between laissez-faire; violent repression, most recently epitomised by the infamous Operação Resgate (operation rescue); and occasional attempts to formalise by facilitating registration, access to micro-credit and systematizing the payment of vending fees. Underpinning many of these strategies there seems to be an assumption that the urban informal economy is comprised of an undifferentiated mass of small-scale entrepreneurs who choose to operate at the margins of the formal . This is in line with mainstream development theory that defines informality primarily in terms of the absence of government regulation as well as the predominance of self-employment.
However, the nature of economic activity and the dynamics of employment relations among street vendors are more complex than the orthodox narratives describe. Despite the apparently entrepreneurial nature of the trade, many street vendors – notably those commercialising manufactured goods such as non-perishable foods – do not own the products they sell. Rather, the negócio (business) often belongs to ‘bosses’ who have direct contact with warehouses that import the products from Brazil, China, South Africa, etc. Periodically, generally at the end of each day or once a week, zungueiras in these types of arrangements pay a pre-determined amount of sales revenues to the bosses. In addition, they cover the cost of transporting and storing the products, as well as the frequent bribes demanded by police or local administration officers in case of arbitrary apprehension of products; all without any formal guarantee of employment provided by the bosses.
Two important implications follow from this. Firstly, as theorised by Bernstein, the informal economy conceals a variety of capital-labour relations manifested in different ‘classes of labour’.[i] In the case of zungueiras, the nature of the economic relationship with the bosses renders the former de facto disguised wage labourers for the latter. To borrow from Wuyts, for these zungueiras, wages are the remains of profits, meaning that they incur most of the risk associated with the unsafe and competitive nature of street-vending, and all the vulnerability inherent of an insecure employment relationship.[ii]
Secondly, in so far as these zungueiras access goods through formal actors that are increasingly integrated in regional and global chains of production and distribution; it is misleading to perceive them as being at the margin of the formal economy. Street vendors are essential actors at the retailing stage of these chains, playing the crucial role of shifting the products into the hands of final consumers. Given the strategic interest of global brands in leveraging informal channels to further the distribution of their products, it is rather the case that many informal workers, such as zungueiras, are adversely incorporated into, rather than excluded from, the contemporary global economy.[iii]
In this sense, informality is a foundational feature of the restructuring of production in global commodity chains and production networks.[iv] As the case of zungueiras illustrates, in the current international division of labour, local, national and international classes of capital systematically draw on informal relations and spaces as well as socially constructed ‘disposable bodies’[v], e.g. poor women, to expand the opportunities for labour exploitation.
The implications for development theory and policy are multiple. Specifically, formality and informality are more meaningfully understood as extremes in a continuum of degrees of labour protections, instead of opposing sides of one regulation or no-regulation coin. From this point of view, policies that attempt to ‘deal’ with informality by violently repressing workers that already face precarious situations, as well as those that reduce the availability of public services that function as safety nets and redistribution mechanisms in favour of the working poor are questionable, at best, and regressive, at worst. Furthermore, given that informality is most expressively manifested as the compounding of worker vulnerabilities and insecurities at the intersection of gender, age, geographical provenance, and other categories of social differentiation, efforts to informalise traditionally formal labour relations through the flexibilization of the workforce and the weakening of labour institutions are also controversial.
As Angola’s petro-led economy slides further into a recession, the visible increase in the number of men and women turning to the informal economy as their main source of income puts pressures on the government to reassess its failed responses to informality. Given the existence of disguised wage labour and adverse incorporation among street vendors in Luanda, it is paramount to start by challenging orthodoxies that, in restricting street-vending to narratives of self-employment and exclusion, fail to grasp the multifaceted nature of informal sector employment and to address the growing numbers of the working poor in the context of ‘uneven and combined’ neoliberal capitalism.
[i] Bernstein, H. (2010) Class Dynamics of Agrarian Change. Sterling, USA, Stylus Publishing.
[ii] Wuyts, M., (2011). ‘The Working Poor: A Macro Perspective’. Valedictory Address as Professor of Applied Quantitative Economics delivered on 8 December, 2011 at the Institute of Social Studies, The Hague
[iii] Phillips, N. (2013) Unfree labour and adverse incorporation in the global economy: comparative perspectives on Brazil and India. Economy and Society, 42 (2), pp.171–196.
[iv] Phillips, N. (2011) Informality, global production networks and the dynamics of ‘adverse incorporation’. Global Networks, 11 (3), pp.380–397.
[v] Mezzadri, A. (2016) Class, gender and the sweatshop: on the nexus between labour commodification and exploitation. Third World Quarterly, 37 (10), pp.1877–1900.