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The Destruction of the Informal Sector
In the past week the government of Zimbabwe has taken steps to destroy
much
of what has become known throughout Africa as the informal sector. This
consists of about 3 million small-scale business enterprises - none of
whom
are registered or pay direct taxes but which play a major part in the
nations economy.
There are 800 000 small scale peasant farmers and their families, but
it is
in the cities where this kind of economic activity has thrived as the
formal
sector has crashed. The activities take on many forms - cross border
traders
who take orders from urban business and then find the foreign exchange
and
go to South Africa or Botswana to source the products required. I
estimated
once that about 5000 traders crossed the borders every day doing
anything up
to 20 per cent of all imports.
Vegetable and fruit sellers are found almost everywhere - a vendor
selling
just a few tomatoes every day can make as much as a worker in industry.
Small scale industry goes on where ever there is a vacant lot and takes
on
all sorts of tasks and produce products such as wire netting, door
frames,
windows, furniture. The motor industry and public transport is another
area
of informal sector business - hundreds of small vans operate in urban
areas
and provide a very efficient form of local transport, which is used by
millions every day.
In the housing sector the role of the informal economy is just as
ubiquitous - with a back log in housing running to over 1 million units
on
official lists and only 1,4 million housing units actually on the
ground,
over 40 per cent of the urban population is thought to be technically
homeless - they live in crowded tenements and as lodgers - often living
as a
whole family in a single room. Desperate for any sort of privacy and
family
life many take to constructing shacks in other peoples yards or on
vacant
ground in peri urban and township areas.
This means that some where about 2,5 million people live in makeshift
urban
accommodation without adequate sanitation or clean water. They include
hundreds of thousands of children. Many brought to the towns because
the
education and health services are so much better than they are in the
rural
areas, or their parents have died from Aids or a related illness and
they
are living with the extended family.
So we have a massive structure of informal sector activities - almost
eclipsing the formal sector that was so dominant in 1980. I estimate
that
informal business may generate as much as half our GDP, handle as much
as 40
per cent of all foreign exchange and 20 per cent of our exports and
imports.
They support 3,4 million urban people and 4 million rural people. They
provide transport for the great majority and meet the basic housing
requirements of at least 8 million people. They pay taxes through the
indirect systems of taxation that exist (VAT and others) and provide a
huge
market for the formal sector as well as income support for the
majority.
Despite the complete failure of the Zanu regime to maintain the formal
sector - with GDP declining nearly 50 per cent in 7 years, exports down
by
half and employment by over 40 per cent - the State has now decided to
decimate the one thing that is working - the informal sector.
If I had not seen it myself I could not have believed that so stupid
and
heartless a thing could be carried out. On Thursday last week I watched
armed police destroy the markets in Beitbridge - the border town with
South
Africa. I saw them burn food, steal groceries and smash furniture.
Afterwards one street kid said to me as I walked past - "this is
cyclone
Gono!" referring to the governor of the Reserve Bank who seemed to have
triggered this exercise in an effort to gain control of informal money
markets. Others just sat stunned - not quite appreciating that the
State had
just robbed them of virtually everything they owned.
We saw evidence of the cyclone all the way to Harare and then over the
weekend we saw the Capital City go up in flames. The markets at Magaba,
Mbare all destroyed and billions of dollars worth of goods taken or
destroyed. My daughter witnessed a team on the street cutting a vendors
hot
dog stand loose and then loading it onto a truck - she remonstrated
with
them and they threatened to arrest her. Some Z$2 billion in cash stolen
from
vendors by the Police.
All over the City homes were destroyed, goods stolen or destroyed and
people
threatened with loaded weapons and live ammunition. They were also
threatened with tear gas supplied by Israel that stuns its victims.
Officers
in charge of this mindless destruction said that they had orders to
shoot
anyone resisting. In one area I visited the majority of the squatters
had
voted Zanu PF in the recent election, believing that in doing so they
were
protecting themselves from eviction because the land they occupied was
not
theirs - they sat stunned by events surrounded by burnt out wrecks of
their
homes and crying children who had spent the night out in the cold.
The question is why are they doing this - punishment is one reason
given by
police to those they were hurting, punishment for voting MDC in the
cities.
But I think there is another reason and this is that Mugabe - now in
the
final stages of his rule, has decided - like Stalin in the 30's and Pol
Pot
in the 60's and the Afrikaner administration in South Africa, that it
is
time to move some people out of the cities and back to the rural areas.
This
is a mass eviction of unwanted urban poor being forced to go "back to
their
rural homes" and "grow food!"
In the cities they are a threat - restless, independent and proving a
powerful support base for opposition politics. In the rural areas they
can
be controlled and perhaps forced to grow food where none is being grown
at
present. Will they get away with it - probably, just like Stalin and
Pol Pot
and the apartheid regime. But only for a while, eventually the tide
will
turn and when it does, those who were the oppressors will themselves
become
the victims of their own evil acts.
To back up this thesis that strange new Ministry called the Ministry of
Rural Housing and Social Amenities with Munangagawa in charge has been
given
a massive budget from nowhere to operate with. This suggests that they
really are trying to force a relocation of population. In the past 5
years,
rural populations have been declining - the math's suggest by as much
as 10
per cent per annum. This coupled with the impact of Aids has meant that
these areas can no longer even feed themselves. Mugabe is trying to
reverse
this situation.
When you go to bed tonight - just think of those tens of thousands of
poor,
hungry, destitute people and their children who will sleep in the open
in
near zero temperatures, without hope or a future. Mugabe is goading the
population to revolt - then he can declare a state of emergency and
remove
what is left of our civil liberties and rights.
Eddie Cross
Bulawayo, 1st June 2005
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