Panels - Decent work and the informal economy: focus on practical initiatives

Chaired by Anne Trebilcock, Policy Integration Department

The goal of decent work has helped to build a common vision to address the diversity of the informal economy. While the informal economy has a large potential for employment creation, it has to be decent employment - with rights, social protection, representation and social dialogue going hand in hand with the dynamism and creativity seen in the informal economy.

In the last three years, efforts have been made across the ILO's Sectors and Regions and among the constituency to pursue these goals. The purpose of this forum is to present initiatives undertaken across the office dealing with the informal economy. Each of the Office's four sectors plus the Gender Bureau made presentations, followed by discussion.

Social Dialogue Sector

Mr. Henrik Moller (Bureau for Employers' Activities) started that the International Labour Conference discussion in 2002 on the Informal Economy and the Resolution concerning decent work and the Informal economy is the current reference "document" for ILO interventions, but also quite specific on the role of Employers' Organizations. The focus and priorities for Employers' Organizations include influencing policies to move towards formality, as well as legislation and policies that create an enabling environment for all levels of enterprises, and extending representation throughout the informal economy and/or acting as a conduit for the establishment of links between informal economic units and formal enterprises

He mentioned some examples of work being undertaken in Belize, Dominica, Grenada, Jamaica, Suriname, St. Kitts & Nevis (on SME Development and operating environment), Mongolia (on the relationship between formal and informal), Bulgaria (on delivery of services to SMEs in the informal economy) and Kenya (on linkages between formal and informal enterprises).

Sergejus Clovackas (International Confederation of Free Trade Unions, Central and Eastern Europe) stated that there are around 10 million people occupied in informal economy in the CEE region. The characteristics of the informal economy in this region include high levels of education, corporate internal organisation, part-time employment in both formal and informal economies, seasonal migration, undefined social partners, association of trade unions with state institutions (among employees), vague boundaries between informal and illegal economies and trade union structures that are not adapted and lack of experience on the part of the trade unions in how to work with IE.

The work being done in the region includes awareness raising, organizing (especially mini bus drivers, street vendors, hairdressers and beauticians, market salesmen, pharmacists, farmers parking fee collectors, garment workers, and tourism operators), and encouraging social dialogue.

Mr. José Luis Daza (Programme on strengthening social dialogue) made a presentation on the legal situation of those in the informal economy, He explained the need to define the concept of labour informality, to recognize the different types of workers and their needs and the work being undertaken to help governments extend protection to informal workers and micro- or small enterprises. He noted that developed countries have adopted measures to apply labour laws to all workers and explained that the ILO would be starting pilots in this area.

Employment Sector

He cited the following examples of projects.

• Training for Economic Empowerment (TREE) in Pakistan and the Philippines. This project identifies economic opportunities and needs, organizes practical training based on this analysis and provides post-training services so that trainees can create their own jobs. It works at the community level and promotes local partnership councils, corporate community groups and savings and credit cooperatives.
• Sustainable management of forest resources in Mali. This project aims to improve the living conditions of people by stopping environmental degradation through the participatory management of forest resources, organization building and labour-based infrastructure work. So far 800 permanent jobs have been created and several different types of associations created.
• Financial risk management in Asia. The goal of this project is to help the poor to smooth income fluctuations and to survive crisis situations. The financial services provided by the project generate new livelihood opportunities and consolidate existing ones by lowering expenditures and reducing economic and social dependence.
• Working with trade unions in Moradabad brassware in India. This project is improving productivity and income through making linkages between working conditions and business practices. 858 workers and 110 entrepreneurs have been trained and 600-700 workers have been organized.
• Organizing informal economy workers through trade union/cooperative collaboration in eastern and southern Africa. The objective of the project is to strengthen trade union and cooperative capacity to organize workers in the informal economy, to reduce poverty through improved working conditions, and to incorporate informal economy concerns into the national PRSP process. Trade unions and cooperatives have assisted 650 unemployed youth to create decent jobs through skills training and micro credit support and to organize in SMEs and worker-owned cooperatives. In 2004 2500 informal economy workers were organized and 24 new groups were established.

Gender issues

Mr.Sunmonu (Secretary General of the Organization of African Trade Union Unity) pointed out that "informal economy" means different things to different people. To, some, it means "unregulated, irregular, and unregistered" economic activities carried out by individuals small family units with no regard for international labour standards. To those involved in the sector, it is a lifeline that helps them survive the vagaries of socio-economic hardship. The massive retrenchment of workers of the formal economy during the implementation of the structural adjustment programmes in Africa in the early 1980s up through 2000 led to the phenomenal growth of the informal economy sector. After the sector absorbed most of the newly retrenched workers, it was hailed by the international financial institutions as the solution to Africa's economic problems.

By the middle of the 1990s, the informal economy sector in Africa became saturated with millions of retrenched workers, unemployed as well as under-employed workers, especially young workers, including university graduates. The situation led to the introduction of Poverty Reduction Strategy Papers (PRSPs) in the year 2000, which is still on-going.

He called attention to the multi-sectoral nature of the IE and the fact women are worse affected by the massive retrenchments in the public sector. Men and women are equally active in cross-boarder trade, particularly in West Africa. Most of the informal economy is not statistically recorded, although most economists count that it is almost equal or larger than the formal economy in many countries of west and central Africa.

He cited a joint ILO OATUU project coverig 6 African countries (Ethiopia, Ghana, Guinea, Mali, Sudan and Tanzania) on promoting gender mainstreaming in trade unions with special emphasis on gender dimension of HIV/AIDS, basic education, informal economy, and poverty. Some of the project successes include:

• Most African trade unions today have gender desks for the promotion of gender mainstreaming,
• There have been constitutional changes within African Trade Unions centers and regional organizations,
• Women workers are being empowered and are taking leading position within the trade union movement
• For the first time within the Governing Body an African woman trade union leader has been elected,
• The trade unions are now organizing informal sector operators with considerable success in some African countries such as Ghana, Benin, Burkina Faso

Social Protection Sector

Philippe Marcadent spoke about the link between poverty and social protection. In Africa, 80-85% of the population is excluded. He described three different experiences of the use of micro-insurance. These are voluntary systems that for the most part cover health care and death.

• In India the Yeshasvini system covers 2.1 million cooperative members for surgery for between 1 and 2 euros per year per person. It is a public/private partnership with 114 hospitals participating.
• In Bangladesh the Grammen Kaylan system covers 260,000 members for primary and secondary health care for 99% of their needs. It is provider based and associates micro-credit with micro-insurance.
• In Senegal the Union des Mutuelles de Santé de la Région de Dakar (union of health mutuals in the Dakar region) groups 32 health mutuals covering 180,000 people in both rural and urban areas and covers both formal and informal workers. The same type of union is being established in another region with similar objectives.

Odile Frank described the work that was being carried out in the informal economy in Ghana. The target group was garage owners, apprentices and mechanics as well as the food sellers patronized by them. The project used a peer approach and trained peer educators to pass messages. The findings indicate that targeted interventions can be highly successful in the informal economy. Similar interventions can be designed to reach other groups in the informal economy.

Michelle Nahmias presented the Work Improvement in Neighborhood Development programme which originated in Vietnam and is being extended to cover Senegal, Ethiopia, Kirgystan and Moldavia. It is a participative method that helps small farmers to improve their working conditions as well reduce work-related accidents. In Vietnam alone 170,000 small farmers have participated in the training and improved their conditions.

Standards and fundamental principles and rights at work sector

Lee Swepston (Standards and fundamental principles and rights at work sector) spoke about the indigenous and tribal people, about 350,000,000 people, who often work outside of the formal economy. The challenges of addressing the problems of the indigenous and tribal people vary from country to country, and even differ within individual countries. The ILO is trying to integrate the development needs of these groups into overall poverty reduction strategies.

He cited many challenges that were being faced by an ILO project on poverty reduction through supporting self-reliance of indigenous and tribal peoples for income generating activities through cooperatives and self-help organizations. These include issues from groups being subject to forced labour to, lack of voice vis-as-vis the governments. He also stressed the importance of measuring the informal economy and challenge of coping with the invisibility of indigenous people.

Caroline O'Reilly (Programme on promoting the Declaration of fundamental principeles and rights at work) spoke about bonded labour and specifically cited a project in Pakistan providing national support to rural areas for agriculture and temporary camps. She underlined the need to help bonded labourers and their families to build sustainable livelihood and to rebuild their lives. Generally bonded labourers come from minority groups, are characterized by high illiteracy, have limited access to social services and limited awareness of socio-economic rights

She presented the 4-5 years project, that includes situation analysis, addresses the need of providing free health services to build trust/ confidence amongst bonded families and the need to move to integrated packages for man and women. She recognized the problems associated with no credit, the need for mobilizing savings for life cycle events.

Several components of the project address issues of law enforcement, capacity building.

The important role of micro-finance was recognized in this regard. She also noted that there is a need for skills developments, and particularly on the following matters:

• managing households financial situations
• economic empowerment,
• rural environmental development
• farming skills development,
• farm technological training

The important role of identity, particularly getting ID documentation was highlighted along with the need for land registration.