City neglects informal sector

The administration has been neglecting the informal sector in the city for many years, a seminar concluded Wednesday.

Experts of various NGOs and the city administration officials attended the one-day seminar.

Speaking at the seminar, Ismarlan, the governor’s expert econo-mic division staff member, said the administration had just started to manage the informal sector in the city.

“[The city administration] does not have an up-to-date report about the sector. Our latest report from several years ago said that approximately 700,000 vendors made a living in the informal sector without any explanation on their products and necessities,” Ismarlan said.

A Central Statistics Agency report released in February says 35 percent of Jakarta’s 4.2 million workers or about 1.5 million people are employed in the informal sector and work jobs such as sidewalk vendors.

From the number, the administration now is providing assistance to 11,005 vendors in 212 locations in the city. Ismarlan said the administration was now focusing on increasing skills and competence of informal sector workers by providing management training and simplifying access to financing sources.

“Although the administration wants to support the informal sector, there is a huge problem regarding implementation,” said East Jakarta Vice Mayor Asep Syarifuddin.

He said there should be a guideline in forms of bylaws that provide clear explanations about the implementation of the concept.

The existing five gubernatorial decrees issued between 2008 and 2010 are only regulating on the arrangement of location and the financing procedure for revolving funds for the informal sector.

A survey result by two NGOs — the Institute for Economic and Social Research, Education and Information (LP3ES) and World Vision Indonesia — presented at the seminar concluded there were no clear implementation of the concept.

“The administration were only focusing on development of the cooperatives, which served as mediators to disburse funds, but it did not directly support the development of the informal sector,” LP3ES social economic development head Mudarus said, adding that as a result, new cooperatives were emerging and the funds did not reach the real target.

The survey, which took samples of 500 people working in the informal sector in five districts, also found that the administration only focused on clearing the city from informal sector workers, such as sidewalk vendors, without providing them with a solution.

According to the survey conducted between January and June, about 66 percent of the people working in the informal sector were female. About 72 percent worked in the trading business and only 8 percent worked in the manufacturing business.

A. Prasetyantoko, an economic analyst of Atma Jaya University, said, “The administration needs to encourage people in the informal sector to work in the manufacturing business so that instead of selling, they can produce goods with competitive values.”

He urged the government to focus on this strategy especially because it had signed the free trade agreement with other countries. (rch)