The street vendor is a ubiquitous feature of urban life virtually everywhere in the world. Food served from a battered cart, jewelry on rickety table, local souvenirs laid in neat rows on a blanket (ready to be pulled up by the corners at the first sign of the police).
Street vendors are often viewed as an urban nuisance even in the most developed of economies – recall Mayor Rudy Giuliani’s war on vendors, legal or otherwise, in New York City in the 1990s. The Federation of Economic Development Associations (FEDA), a grassroots federation of small and medium-sized enterprises (SMEs) in Egypt, knew that this would be an issue that would capture attention when its launched its own program aimed at this unlikely group of small business owners.
Still, FEDA has sparked public debate on the issue in Egypt at a level it didn’t expect. It earned significant print and broadcast media coverage – most recently, a spot on Nile Life TV’s popular Every Night program. Every Night is seen nationwide in Egypt and by satellite throughout the MENA region.
[youtube:http://www.youtube.com/watch?v=li8lidIs6Rs]
It’s a great piece, which includes on-site interviews with vendors and a lively discussion with FEDA vice chair Abdul Motei Lotfi and CIPE Egypt director Randa al Zoghbi. Lotfi and Zoghbi do a great job of outlining the issue – how to regulate street vendors. What is most striking, though, is how the vendor interview segment puts a human face on a too-often marginalized group.
[youtube:http://www.youtube.com/watch?v=UjLz_OMbNe0]
Egypt has ranked in the top 10 reformers in the World Bank’s annual Doing Business Indicators for three of the past four years. There are still many, however, for whom the barriers to entry to starting a conventional business — particularly property ownership — simply remain too high, leading them to sell on the street. And while it is technically possible to obtain a license to be a street vendor in Egypt, few licenses are issued, out of fear of encouraging rural-to-urban migration. As a result, most vendors operate in the informal economy, enduring harassment from, or being forced to bribe, police and municipal officials to stay in business.
FEDA and CIPE seek to lower these legal and regulatory barriers to entry to bring the vendors from the informal into the formal economy, where they can be registered, regulated, and taxed, and where they will enjoy legal protection, access to social services, and protection from abusive officials – as well as access to financial services such as credit. With credit, a particularly successful vendor could get off the street and into a shop, and before long, need to hire employees, then need a bigger shop, etc.
Success on this issue would yield benefits not only to the vendors. Given the employment crisis looming on the horizon throughout the MENA region, the Egyptian government has a vested interest in any proposal that has the prospect of generating new jobs.
For FEDA, 100 local associations and 30,000 SMEs strong, bringing street vendors into the formal sector has another big upside: thousands of potential new members to add to its already significant grassroots-based political clout. Brilliant. Perhaps Egyptians have better democratic instincts than they’re sometimes given credit…
Published Date: September 03, 2009