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Informal economy

The informal economy accounts for a large portion of the national economic activity in many regions of the world. In recent years, this portion has grown rapidly in almost all regions, and especially in developing countries. A significant proportion of small- and medium-sized enteprises are in the informal economy. Therefore, it is critical that Employer and Business Membership Organizations (EBMOs) take actions that support the formalization of the informal economy.

By adopting initiatives in the area of the informal economy, EBMOs can:
  –   Play a significant role in drawing attention to the pressing need for action and in bringing into the mainstream the considerable potential for employment and wealth creation that is currently marginalized in the informal economy.
  –   Make contributions towards achieving a more level playing field by ensuring that informal competitors are subject to the same requirements as their members, thereby spreading the tax and social protection burden more evenly and equitably - moreover, any simplification of administrative rules and regulations is likely to benefit both formal and informal businesses in equal measure.
  –   Enhance their own standing as important national actors by helping to show viable ways of addressing a problem which has taken on enormous proportions in many developing and other countries.