Informal economy

Building resilience for the future of work and the post COVID19: Promoting rights and social inclusion through organization and formalization (PRS) Phase II

The project aims to contribute to the reduction of decent work deficits and gender inequalities in the informal economy and promote the transition to the formal economy in Nepal, India and Pakistan.

At a glance

Partners
Federal Ministry of Overseas Pakistanis and Human Resource Development, provincial Labour Departments, employers’ organizations, and industry associations, workers’ organizations, migrant workers associations and non-governmental organizations.

Target beneficiaries
Workers and economic units in vulnerable situations affected by the Covid-19 impact under the informal economy, such as domestic workers, cleaning and sanitation workers, and small business owners, especially focusing on women.

Geographical focus

Nationwide in Pakistan - with a focus on informal economy workers like home based workers, domestic workers, agriculture workers, migrant workers and daily wage workers etc. At sub-regional level, the project covers India, Nepal and Pakistan.

Project objectives

The Covid-19 pandemic has had a negative impact on the national economies, employment, and societies across South Asia, exposing weaknesses in the current labour market structure where informal employment is prevalent in all sectors. Despite the gradual improvement, the recovery progress in the economy or labour market is quite uneven, and vulnerability still exists in many parts of the region. Especially the workers and economic units in the informal economy still suffer largely from the lingering impact of the pandemic, with many remaining unemployed or only partially employed, with a drastic fall in income. This vulnerability is further compounded by the lack of access to formal social security systems typical in the informal economy, which deprives workers of an opportunity to move away from precarious conditions.

Additionally, the pandemic has deepened gender disparities in income and employment between women and men, especially in the informal economy. Women workers have been disproportionately affected by the pandemic, with several of the hardest-hit occupational groups predominantly occupied by women. The share of informal employment is 82.0 percent in Pakistan, with the share of women is 90.6 percent. Informal economy workers face a lot of problems, including but not only limited to the lack of a formal contract, are not linked to any social security schemes, don’t have regular working hours, being prone to workplace and sexual harassment, and don’t have legal protection through legislation in the country.

To address these challenges, the International Labour Organization (ILO) launched the “Building Resilience for the Future of Work and the Post COVID-19 (PRS/STRIDE)” Project in 2021 with funding support from the Government of Japan. The project has provided necessary support and protection for informal workers and economic units in vulnerable situations, especially focusing on women, and promoted their formalization by collaborating with social partners across South Asia. While the project has achieved the intended outcomes by providing support to more than 20,000 informal workers and economic units, including domestic workers, cleaning and sanitation workers, and small business owners, realizing policy actions for formalization and gender equality, it has also identified a need for continuous support for informal workers and economic units. In response, the Government of Japan has come forward to continue providing financial support and establish PRS Phase II of the project to sustain ongoing works in India, Nepal, and Pakistan.

Succeeding the outcomes of PRS/STRIDE, the project aims to continuously contribute to the reduction of decent work deficits and gender inequalities in the informal economy and promote the transition to the formal economy in Nepal, India, and Pakistan.

Main activities

The project will lead various initiatives and activities in line with the following pillars:
  • Support social partners to enhance their capacity to develop, update, and implement plans and measures to address decent work deficits and gender inequalities and promote the formalization of workers and economic units in the informal economy.
  • Support social partners to enhance their capacity to develop strategies and implement plans of action to advance gender equality and improve women’s representation within their organizations and among their memberships.
  • Enhance the availability of gender-responsive knowledge products on the need to address decent work deficits and inequalities that informal economic units and workers face to create awareness and mobilize support by policymakers, national stakeholders, and the general public.
  • Strengthen the capacity of government and social partners to collaborate and engage in social dialogue to address decent work deficits and inequalities and promote gender equality, women’s empowerment, and formalization in the COVID-19 recovery.

Project outcomes

PRS Phase II works to realize the following project outcomes:
  • Strengthen the capacity of social partners to implement strategies to promote formalization and gender-responsive COVID-19 recovery.
  • Realize the enhanced partnership and coordination among the constituents and other stakeholders for identifying and implementing policy actions to promote formalization and gender-responsive COVID-19 recovery.
  • Gain awareness and support from wider stakeholders, including the general public, for the issues of informality and the vulnerability of workers and economic units in the informal economy.