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Street businesses are helping hands for poor people

Street vendors play an important role in the economy, especially in urban areas, as they provide essential items to middle-income households living in those areas.  By selling goods at an affordable rate they earn income from their business while simultaneously working for the benefit of other people in the city. Street vendors are an integral part of urban economies around the world as they provide easy access to a wide range of low-cost goods and services in public places. They sell everything from fresh vegetables to ready-made food, from construction materials to textiles and crafts, from electronics to auto repair. Most of the street vendors are the breadwinners for their families, so they have a responsibility of providing food for families and paying for their children’s school fees as well.

By earning from the vendor stalls, they manage to meet the basic personal and family needs. Many people enter the street business because they cannot find employment in the formal economy. In this sense, it can be said that street business is an important means of urban employment thus helping in increasing the economic activities of the area they operate in. Along with this, there are some goods in the market which are easy for customers to buy on the sidewalk. They prefer to buy small retail items from the roadside during their commute because they do not have the time to go to shopping malls or other big stores to buy such commodities. No customer wants to waste their precious time going to a shopping mall or a big store to buy a Rs. 20 mask. Customers are satisfied with the carts that are operating to sell food on the side of the road and they are going there time and again. This shows that the removal of street business is an attempt to deprive consumers of their right to free consumption.

These entrepreneurs make a living by selling goods on streets and other open public places. It is the main source of income for the lower class people in the city as well as a relatively low source of income for some other city residents.

With the increasing rate of migration from rural areas to urban centers, cities are growing in Nepal and most of these migrants cannot find proper employment to make a living in a competitive environment. Opening up a street vendor stall can be an easy source of income for those who have migrated to the city in search of basic necessities including development infrastructure and employment but this has made street business management a major urban problem in many big cities of Nepal.

Lacking the skills, knowledge and education to find well-paying jobs in the formal sector, those who migrated from rural areas to the cities are often involved in the street business. Nepal’s growing population and declining job opportunities in the formal sector have also prompted people to seek employment in the informal sector including street business. It is a global issue where millions of people seek to make a living by selling goods on the streets, sidewalks and other public places, in whole or in part. Street vendors are self-employed. For those who lack adequate capital, skills and knowledge, street business is a comfortable means of livelihood.

The issue of management of street business is rapidly rising in all major cities of Nepal. Although the number of street vendors is high in major cities of Nepal, proper management has not been practiced yet. There are many who make a living by trading on the streets of the Kathmandu Valley.  Many people who came to Kathmandu valley for employment have made street business a means of financial gain after finding no other work. The number of street businesses in Kathmandu valley is increasing daily.  This trend is also increasing in other cities of the country.

In many developing and least developed countries like Nepal, a large proportion of employers are involved in the informal sector. According to official statistics from African, Asian and Latin American cities, street vendors account for between 2 and 24 percent of total urban informal employment. According to study, street vendors suffer the most torture from the police. According to the study, 86.6 percent of the street vendors are totally dependent on street trading as their source of income. The main reasons for people to opt to street vendoring are lack of alternative employment opportunities, ensuring household food security and supplement income from other activities. A study has concluded that the street business has contributed to the improvement of living standards of the sellers.

If the street business can be easily managed, this business can be a boon; a source of employment opportunities and financial resources instead of a problem. As it has been providing jobs, employment and has been a source of livelihood to the poor, it can be a solution to the rising unemployment rate. The immigrants have somehow developed their capital assets, but when it comes to street vendor management, one has to think about how to preserve the city’s environmental beauty and provide sustainable business space for traders.

Lack of gainful employment coupled with poverty in rural areas has pushed people to leave their villages in search of a better living in the cities. Urban migrants do not have the skills or education to enable them to find well-paid, secure employment in the formal sector and must settle to work in the informal sector.

A street vendor is broadly defined as: a person who offers goods for sale without a permanently constructed structure to operate their business. Stationary street vendors occupy a space on sidewalks or other public/private spaces while movable street vendors carry their wares in baskets or in their hands, bags or on their heads and move from one place to another to sell their products. Although they make a significant socio-economic contribution to the region in which they operate, pavement traders are among the most weak and insecure informal workers around the world.

According to the latest report of the World Bank, Nepal ranks 94th in terms of business environment in comparison with others country around the world. Therefore, there are various legal and practical complications from starting a business to running it. According to the report, Nepal ranks 135th in terms of ease of starting a business. According to the World Bank report, it takes an average of 22.5 days to start a business in Nepal. You have to go through eight steps to start a business in Nepal. Because entering the street business does not require much investment and there are no barriers to entry, citizens are attracted to it.  With the formation of local governments in the villages, the market and urbanization has also increased in the villages. In this regard, there is a need for the local levels from the cities to the villages of Nepal to formulate policies for street business management.

(This article is prepared on the basis of the study done by Hriti Foundation on ‘Situation of Street Vendor in Birendranagar: Policy Obstacles and Remedy of the Solutions’. Five articles will be published in this series.)