A short note to begin.
The Jakarta Post is celebrating its 25th year in publication and has developed a new web site with a new format. You can link through to it here …>go to The Jakarta Post
Jakarta Urban Blog has used much from TJP (for example the blog below). Without them I would feel lost. I have to say thanks and wish them well for the future.
You see them everywhere. In the morning they wheel their carts from the kampung to the street side, under a shady tree, or off to the side of a parking lot. In the evening they wheel their carts home or light their lamps to catch some business from commuters as they pass on their way home.
These are the cart vendors. Kaki lima, five legs, two for the vendor and three for the wheeled cart. They sell just about everything in the pantheon of Indonesian street cuisine: mie bakso, kacang, nasi gorang, sate, or soft drinks as in the photo above. There are hundreds, thousands, ten thousands, or perhaps through all of Indonesia millions of these carts providing a livelihood for the vendor and his family. This is just one type of small business activity that you see in a dizzy array of small business types throughout Jakarta.
I think probably more than anything else the kaki lima cart vendors and the becak drivers (perhaps less so the becak because it has been banned in Jakarta, but it is still seen and used in the suburbs) are symbols of Jakarta’s informal ecomony.
In economics, the term informal economy refers to those economic activities which fall outside of the formal economy which is regulated by economic and legal institutions. Generally the informal economy can be thought of as small scale market economy where certain types of income and business activity are unregulated, untaxed, or unmonitored (formally anyway).
Typically economic activity of this type is not calculated in the Gross National Product (GNP) but it can account for as perhaps as much as 60% of the labor force and contribute as much as 40% of the Gross National Product (GDP).
The terms “under the table” and “off the books” are sometimes used to describe the informal economic sector.
In its darker aspects the informal economy can also encompass black markets, contraband, piracy, and human trafficking.
Hans-Dieter Evers in The End of Urban Involution and the Cultural Construction of Ubanism has written that, “The pattern of urbanization in Indonesia has been described as one of “urban involution” during the 1960s and 1970s when intricate patterns of an informal urban economy developed without leading to the modernization of built structures, modes of transport, industries and occupations.
Involution -in contrast to evolution- designates a process in which structures, patterns and forms become more and more intricate and complex without reaching a new stage of evolution. According to Geertz involution, an “inward over elaboration of detail” leads to stagnation and underdevelopment.
For most towns and cities the growing bureaucracy and informal sector trade have been the major driving forces of urbanization rather than industrialization or the development of a modern service sector.
Quite detached from the reality of shared poverty, stagnation and underdevelopment the capital city of Jakarta was symbolically created as an exemplary centre of culture, national identity and power. A unitary post-colonial nation state had to have an “exemplary centre”, a capital. It was therefore necessary to develop a central capital city at least as a symbolic representation. “Virtual urbanism” was essential to gloss over the harsh reality of a large urban sprawl of squatters and semi-rural kampungs. It had to be demonstrated to the world that Indonesia was a unified nation and a leader of the “newly emerging forces” of the Third World. Jakarta developed for the “imagined community” of the Indonesian nation state a symbolic universe of meaning, a virtual world of monuments, parade grounds and significant buildings following a pattern of cultural, rather than material urbanization.
Today for Jakarta, Surabaya, Bandung and Medan and some of the other larger provincial capitals the process of involution has come to an end and -in the words of Terry McGhee a “true urban revolution” is under way.
Less than half of the Indonesian population makes a living from agriculture and an urban middle class, following global patterns of consumption, changes the cityscape.
Open markets are still there, but shopping centres and malls have been constructed to cater for the new consumers and high-rise buildings mark the new CBD (Central Business District) with an ICT (Information and Communication Technology) infrastructure that enables world-wide networking.
This process has far-reaching consequences”.
And here is what some of them are.
Jakarta appears to go through periods where evictions of market and street vendors occur in regular cycles. Markets are cleared and removed, vendors scatter. The famous Kwitang traditional book market in Senen, the flower and fish market at Barito, in South Jakarta, which have been in the news recently, are just two examples of a long list of removal and eviction by city authorities.
More talking needed: Urban observers
Evi Mariani
January 18, 2008 , The Jakarta Post
“As part of this process, the administration decides to clear an area and sends in public order officers and bulldozers to make sure residents and traders leave. Most of the time the process is far from satisfactory, achieving none of the administration’s desired results”… …”On Jl. Urip Sumoharjo in East Jakarta, vendors were blamed for causing constant traffic jams. Once they were evicted from the area, the traffic congestion eased slightly. However, eventually many of the evicted residents decided to return to the area, remaining there until this day. On Jl. Pancoran in Glodok, West Jakarta, an eviction a few years ago also proved to be a waste of time, with many vendors continuing to trade in the area”.
A list of recent Jakarta Post articles of market and vendor evictions can be found at 2.Bangkok.com here are some of the story lines…
Glodok traders search for break, new turf after eviction, January 18, 2008 The Jakarta Post, Jakarta
Vendors become victims of changing times in Jakarta, January 18, 2008 The Jakarta Post, Jakarta
Flower power wilts thanks to city’s deaf ears, Opinion and Editorial – January 21, 2008 Evi Mariani, The Jakarta Post
Vendors stand their ground near bypass, The Jakarta Post, 30/01/08
Rawasari vendors vow to maintain struggle, City News – February 11, 2008 The Jakarta Post
What recently caught my interest was an article in the Jakarta Post from 2.24.08 titled The informal sector: Jakarta’s survival strategy by Raphaella Dewantari Dwianto. Dwianto has PhD in urban sociology from Tohoku University in Japan and is a faculty member at Atma Jaya Catholic University in Jakarta. I have posted the entire article here. The article not only has useful insights to Jakarta’s informal ecomony but also includes Dwianto’s personal observations and interactions with it. Which is exactly the kind of writing I like.
“People in Jakarta and other big cities have been, for some time, very familiar with news reports of street vendors being “kicked-out” (often literally) from places where they run micro-scale businesses such as selling foods, soft drinks, snacks and so on.
But I have my own experiences with the city’s informal sector.
Living 25 kilometers away from my office in the central business district of Jakarta, I often choose to take the air-conditioned express train to the office or to return home.
One of my little pleasures when I get off of the train at the station near my house, usually feeling rather exhausted after a whole day of working in the city, is to enjoy a nice live music performance.
On the stairs toward the main exit of the railway station, are always the same young men, sitting or standing, playing musical instruments such as violins and bass, performing harmonious, easy-to-listen-to music .
If in the evening I am entertained by the soothing live-music performance, likewise in the morning another group of young men will perform a more dynamic piece of music, using their guitars and drum-set to play mostly Indonesian popular songs. When an express train arrives, they will get on the train, play their music in the car, collecting money from the commuters.
I am always amazed by their agility as they jump out of the train with their musical instruments just barely avoiding the closing automatic door.
It is not only music I can enjoy while waiting for my train to commute to Jakarta. In the morning, I can also have my breakfast on the platform. The hawkers on the platform have a lot to offer, from snacks such as kue pastel or risoles, to more filling food such as fried noodles or nasi uduk.
Or, if you do not want to eat in the station but rather bring some food to your office, there are food vendors with plastic baskets offering you Indonesian sweets such as onde-onde, or even some Dutch klapertaart or macaroni schootel.
Apart from food, there are people who sell shoes, clothes, sunglasses, accessories for cellular phones and morning newspapers all on the same platform. I might exaggerate a little, but I can say that, in the morning, I only need to wake up and wash my face beforing heading off to the station.
People who get their income from the informal sector in Jakarta are the majority when compared to people working in the formal sector. Yet, the former group actually belongs to the urban minority group.
The informal sector is nothing new to urban areas such as Jakarta. In the 1930s, a Dutch scholar named Julius Herman Boeke found that, in the economic activities of the Netherlands East Indies, now called Indonesia, there were economic activities based on the principles of capitalism, represented by enterprises and firms.
At the same time there were contrasting activities, which he described as oriental economy, which were none other than economic activities of the informal sector.
Eight decades after Boeke’s findings, the informal sector in this country still prevails.
According to data provided by the World Bank in 2002, the total revenue from the informal sector in Indonesia accounts for almost 20 percent of the country’s GNP. However, the percentage is much lower compared to other Asian countries, such as Thailand or the Philippines, where the number reaches around 50 percent of the GNP.
When it comes to the ability of the informal sector to absorb Indonesians in their working prime, the informal sector includes around two thirds of the working people in Indonesia.
When it comes to urban areas in Indonesia, a study done by the National Development Planning Board (Bappenas) shows the percentage of people working in the informal sector keeps increasing.
In 1971 the percentage of workers in the informal sector in urban areas was around 25 percent, which then increased to 36 percent in 1980 and 42 percent in 1990. The number peaked in the year 2000 — around two years after the economic crisis — when it reached 65 percent.
Many of us must still remember the sudden emergence of many kafe-tenda during the economic crisis, which showed that even middle class people in Jakarta would turn to the informal sector in a time of crisis.
The fact that the informal sector can serve as a safety net during and after an economic crisis is concluded by two German sociologists, Hans-Dieter Evers and Rudiger Korff, who said the informal sector was a method for people to survive in urban areas.
Even though Evers and Korff’s idea of urban survival concerns people working in the informal sector, it also defines the survival strategy for consumers in the informal sector.With an unstoppable rise in prices of goods these last few months, I would rather get my lunch from a nearby vendor costing me less than Rp 10,000, and I believe I am not alone in this preference.
If the informal sector is a strategy for survival for workers in the informal sector and also consumers, then there must be a better policy than the government’s “scrapping” policy to deal with it. To be able to formulate this better policy, we must begin by acknowledging the significance of this sector on the lives of the people”.
I will have more to say on Jakarta’s informal economy in later postings.
