Tribune News Network
Doha
As governments around the world continue to grapple with the economic and health impacts of the coronavirus pandemic, policymakers in emerging markets have been seeking effective ways to support their informal sectors. In response to the growing crisis, the World Economic Forum (WEF) has called for a new deal aimed at protecting informal workers.
Informal workers are those who work in jobs that are not registered with local authorities or covered by formal working arrangements. Although they usually fall outside the tax net, such workers are often not eligible for basic social security, nor protected by basic employment rights.
Globally speaking, there are an estimated 2 billion informal workers across a range of occupations and industries. Although they make up 62 percent of all workers worldwide, according to the UN’s International Labour Organisation (ILO), they are highly concentrated in emerging markets.
For example, while the proportion of informal workers in high-income countries is just 18 percent, this figure rises to 67 percent for middle-income countries and 90 percent for low-income economies.
In addition, the ILO estimates that informal enterprises account for eight of every 10 businesses in the world, many of which are small-scale family or community operations.
While these workers experience a higher risk of vulnerability at the best of times, the pandemic has placed even more strain on those who operate within the informal economy. Typical workplaces for informal workers – among them markets and shops – were closed for extended periods this year as part of efforts to contain the spread of the virus.
In a report released in early May, the ILO said that 1.6 billion out of the world’s 2 billion informal workers had been significantly affected by coronavirus-related lockdown measures, with women overrepresented in the hardest-hit sectors.
While governments around the world have since implemented significant stimulus packages to combat the impact of the virus and related lockdowns, the fact that workers and businesses within the informal sector are not registered with authorities means that many have not received state support in some countries.
As a result of the disruption to business and lack of government assistance, it is estimated that relative poverty for informal workers will increase by 56 percent in low-income countries.
Given these economic pressures, the ILO said that the situation was forcing people into making desperate decisions, and choose whether "to die from hunger or from the virus”.
Elsewhere, the disruption caused to informal economies has undermined food supply to many vulnerable communities, along with damaging the livelihoods of millions of farmers worldwide.
While the unregistered nature of informal workers complicates state efforts to provide assistance, the sheer size of informal economies, especially within emerging markets heart, has nevertheless seen governments seek to provide support to the sector throughout the pandemic.
In Nigeria, for example, the informal sector is estimated to account for around 80 percent of employment and 65 percent of GDP, while informal workers make up around 80 percent of the total workforce in Indonesia, Myanmar and Cambodia.
In neighbouring Vietnam the government has expanded existing social assistance programmes to include many within the informal sector, while Bangladesh has increased the value of benefits available to those who are eligible for assistance.
In terms of financial support, Nepal and India have increased in-kind and cash transfers to poor households and informal sector labourers, and Indonesia has extended utility subsidies for low-income families.
Thai authorities introduced a three-month strategy whereby 10 million farmers and 16 million workers not covered by social security programmes were transferred $153 each month through digital payment platforms.
Such initiatives align broadly with a call from the WEF to develop a post-pandemic ‘new deal’ for Asia, home to the world’s largest informal labour force, that includes stronger protections for informal workers.
As part of its plan, the WEF has emphasised the need for the expansion of health care coverage and public health infrastructure including in the provision of clean water and sanitation facilities with digital platforms for education and financial services to provide economic security for low-income households.
Doha
As governments around the world continue to grapple with the economic and health impacts of the coronavirus pandemic, policymakers in emerging markets have been seeking effective ways to support their informal sectors. In response to the growing crisis, the World Economic Forum (WEF) has called for a new deal aimed at protecting informal workers.
Informal workers are those who work in jobs that are not registered with local authorities or covered by formal working arrangements. Although they usually fall outside the tax net, such workers are often not eligible for basic social security, nor protected by basic employment rights.
Globally speaking, there are an estimated 2 billion informal workers across a range of occupations and industries. Although they make up 62 percent of all workers worldwide, according to the UN’s International Labour Organisation (ILO), they are highly concentrated in emerging markets.
For example, while the proportion of informal workers in high-income countries is just 18 percent, this figure rises to 67 percent for middle-income countries and 90 percent for low-income economies.
In addition, the ILO estimates that informal enterprises account for eight of every 10 businesses in the world, many of which are small-scale family or community operations.
While these workers experience a higher risk of vulnerability at the best of times, the pandemic has placed even more strain on those who operate within the informal economy. Typical workplaces for informal workers – among them markets and shops – were closed for extended periods this year as part of efforts to contain the spread of the virus.
In a report released in early May, the ILO said that 1.6 billion out of the world’s 2 billion informal workers had been significantly affected by coronavirus-related lockdown measures, with women overrepresented in the hardest-hit sectors.
While governments around the world have since implemented significant stimulus packages to combat the impact of the virus and related lockdowns, the fact that workers and businesses within the informal sector are not registered with authorities means that many have not received state support in some countries.
As a result of the disruption to business and lack of government assistance, it is estimated that relative poverty for informal workers will increase by 56 percent in low-income countries.
Given these economic pressures, the ILO said that the situation was forcing people into making desperate decisions, and choose whether "to die from hunger or from the virus”.
Elsewhere, the disruption caused to informal economies has undermined food supply to many vulnerable communities, along with damaging the livelihoods of millions of farmers worldwide.
While the unregistered nature of informal workers complicates state efforts to provide assistance, the sheer size of informal economies, especially within emerging markets heart, has nevertheless seen governments seek to provide support to the sector throughout the pandemic.
In Nigeria, for example, the informal sector is estimated to account for around 80 percent of employment and 65 percent of GDP, while informal workers make up around 80 percent of the total workforce in Indonesia, Myanmar and Cambodia.
In neighbouring Vietnam the government has expanded existing social assistance programmes to include many within the informal sector, while Bangladesh has increased the value of benefits available to those who are eligible for assistance.
In terms of financial support, Nepal and India have increased in-kind and cash transfers to poor households and informal sector labourers, and Indonesia has extended utility subsidies for low-income families.
Thai authorities introduced a three-month strategy whereby 10 million farmers and 16 million workers not covered by social security programmes were transferred $153 each month through digital payment platforms.
Such initiatives align broadly with a call from the WEF to develop a post-pandemic ‘new deal’ for Asia, home to the world’s largest informal labour force, that includes stronger protections for informal workers.
As part of its plan, the WEF has emphasised the need for the expansion of health care coverage and public health infrastructure including in the provision of clean water and sanitation facilities with digital platforms for education and financial services to provide economic security for low-income households.