Zimbabwe: Don’t mess with the informal sector

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 on currently.

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.

By Ian Scoones. This post first appeared on Zimbabweland

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