Special conference on informal sector

City streets are lined by barbers, cobblers, waste recyclers, vendors of vegetables and every other imaginable kind of goods. They join the legions of workers that comprise the informal sector, that shadowy part of the economy, where companies -- if they can even be called that --don't exist on official registers and workers don't have secure contracts or benefits and social protection.
"This sector is hugely important to developing countries, having ballooned over the past decades as high rates of urbanisation, population growth and declining wages have pushed people out of the formal sector," said Professor Bishnu Dev Pant, director of the Centre for Economic and Applied Statics (CEAS)-South Asian Institute of Management.
"To gauge their contribution in real terms, brainstorming is needed," he said adding that South Asian Institute of Management is holding an international conference on 'Measuring Informal Sector in Developing Countries' jointly with International Association for Research on Income and Wealth (IARIW) on September 24-25 in Kathmandu.In most developing countries, most people depend for their livelihood on the 'informal economy' as their incomes come from subsistence farming or from operating small unincorporated enterprises.
Although the largest part of GDP may be generated by the formal economy, most people in developing countries live in the informal one, according to Pant.
By its nature the informal economy is difficult to measure. Informal enterprises are not usually listed in statistical registers used for official surveys, so indirect methods have to be used to estimate their contribution to value addition, output and employment. "Measuring the informal economy is therefore one of the main themes of the Special Conference," Prof Pant said adding, "But measurement is only useful if it serves the needs of policy makers. The conference will also consider the more basic questions of what needs to be measured and how measuring the wrong things may lead to bad policy-making."
"Yet, there's scant data on the informal sector, largely because of its high turnover, the reluctance of informal workers to participate in official survey and the small size of informal enterprises. This has a dealt death blow to sound policy-making in small economies where the informal sector plays a big role," he said adding that traditional survey methods will need to be totally overhauled to capture the full complexity of the informal sector.
This Special IARIW Conference -- that will have 50-75 participants -- will look at both economic and social aspects of the informal economy. How large it is in terms of employment and output, where families in the informal economy stand in the overall income distribution, what access they have to government education and health services, how they are served by non-profit institutions, how they cope with food shortages and price hike of basic for foodstuffs, and what government policies may be helpful or harmful in promoting the welfare of those who live in the informal economy.