What The Riots In Zimbabwe Mean: Don’t Mess With The Informal Sector
From Zimbabweland. Story by Ian Scoones, joint convenor of the University of Sussex Institute of Development Studies.
In the last few weeks there have been riots in Zimbabwe. In Beitbridge, on the border with South Africa, furious cross-border traders set fire to a warehouse in protest at import bans recently imposed, while in Harare taxi operators protested against the cost of continuous police road blocks, where spot fines are extracted.
Both these incidents highlight how Zimbabwe’s economy has changed dramatically, and why the state has to accommodate, encourage and support the informal sector, not control, suppress and ignore it.
Formal unemployment runs at 90 percent or more, but this doesn’t mean that all these people are not doing things. They are, but not in the jobs of the past. Livelihoods are improvised and flexible, combining ways of earning income – farming, trading, dealing, manufacturing, mining, selling services and a host of other distributive activities, reliant on deeply embedded social relationships.
New networks of economic activity have emerged, as has a vibrant spirit of innovation and entrepreneurship. This is in the context of extreme hardship for sure, as the economy continues to plummet due to lack of investment.
Informal economies are built on relations. Many operating in the informal sector are reliant on patrons and support from others; sometimes this is through relations of kinship, or through the church, and very often political patronage plays a part. If you want to secure a spot to trade in town, someone inevitably has to be paid off. Informal activity is tough, precarious fragile, sometimes illegal, and often is subject to arbitrary taxation from those in authority – as in the case of the road blocks affecting informal transport operators across the country.
The informalisation of the economy is a pattern across Africa, as James Ferguson eloquently describes. The improvised livelihoods of the poor are creating a new distributive economy, and with this a distributive politics, he argues. This is having a major impact on the way we understand African political economy – and not only in Zimbabwe.
The shock is perhaps greater in Zimbabwe, as in the past the formal sector was larger and stable. But the post-structural adjustment growth of informality is a phenomenon everywhere; and is accelerating, especially in countries where reliance on a core commodity sector was the economy of the past.
Thus the informal sector – a huge and massively varied category – represents a very substantial proportion of Africa’s economic activity. In the rural areas this has always been the case – small-scale farming dominates and rural dwellers have always engaged in a bricolage of activities, both on and off farm. Today such complex livelihoods are the norm in town too. The jobs of the past – in the factories, mines, farms and so on- no longer exist – or may do so only temporarily – and the alternative is a set of activities that don’t fit the past expectation of a “job” or “employment”, and are not counted as such.
In Zimbabwe, the informal sector is the economy today: it cannot be ignored, wished away. It is what the 90 percent live on, but we know little about it, and policies often upset and disrupt, rather than support and nurture.
So it is no surprise that the arbitrary import controls were resisted when the blunt Statutory Instrument 64 — that appeared to ban the import of everything from mayonnaise and coffee creamer to body lotion and building materials — was imposed (although hurriedly amended later). In the name of domestic manufacturing protection, the livelihoods of many thousands of traders who bring goods from South Africa were affected; no wonder they were angry.
In public policy, statistical data collection and media commentary, the new real economy in so many places has been ignored, or dismissed and berated. Responses have been inappropriate too. Formalising the informal is not the point, and attempts at converting everything into a ‘small enterprise are misguided. Controlling and regulating will not work, and will be resisted, sometimes violently. And yes, while much activity is outside the ambit of the state, and not taxable, it is the lifeblood of the economy – and certainly is in Zimbabwe. Yet glorifying and romanticising the informal is not the solution either. Living in the informal sphere is tough – incomes are small and highly variable, and the costs of patronage, coercion and control can be high, economically and psychologically.
The events of the last few weeks in Zimbabwe point to the need for a new accommodation between the informal and formal and between the economies and livelihoods of the 90 percent and the state. A new political economy is emerging, where the class relations of the past are no longer relevant, and state-economy-citizen relations must be rethought. Rather than imagining the informal economy as somehow outside, and needing to be brought in, it has to be thought of as central to development.
Providing support, generating legitimacy, assuring accountability and preventing exploitative predatory, patronage relations are all roles for the state; ones that the Zimbabwean state is failing.
This means attempts at controlling, regulating and incorporating have to be avoided, despite the knee-jerk temptations. These are the key lessons from rioting in Beitbridge and Harare. The 90 percent after all are the electorate, and will protest in many ways if livelihoods in increasingly difficult circumstances are jeopardised.
This does not mean that attempts to rebuild the formal sector should cease. Far from it. Finance Minister Patrick Chinamasa was in London making that case for Zimbabwe last week to the usual howls of protest. But the refinancing that will hopefully flow from the International Financial Institutions and other private investors will need to find its way to the new economy, and not just prop up the old. For in the longer term, it is the informal entrepreneur, the niche market trader, the small-scale artisan and manufacturer and the smallholder farmer who will scale up and multiply the massive, but uncounted and perennially unsupported informal economy; in time graduating into larger businesses and operations that become increasingly formal.
Managing and supporting such a transition is the central economic challenge of the future. The standard models and forms of expertise derived from the old economy are inadequate: a new politics and economy of the informal urgently needs inventing.
Read more at Zimbabweland.
Sign up for the Moguldom newsletter — business news you need to know about economic empowerment for the digital age, delivered to your inbox.