Informasi Kajian Permasalahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September .2003

PEDAGANG KAKI LIMA DI WILAYAH METROPOLITAN BANDUNG, MASUKAN BAGI PEMBUATAN KEBIJAKAN (Street Vendors in Bandung Metropolitan Region, Inputs for Policy Making) Edi SUHARTO

Abstract Peranan sektor informal diperkotaan dalam pembanguna menjadi isu penting dalam kebijakan. Di Indonesia evaluasi kebijakan sosial masih memfokuskan perhatian pada pertumbuhan dan dampak sektor informal terhadap lingkungan kota. Pertumbuhan pedagang kakil lima menjadi kontroversial karena terjadi konflik kepentingan antara kesempatan kerja dengan kepentingan publik. Artikel ini menyediakan informasi tentang faktor-faktor yang mempengaruhi pedagang kaki lima yang berguna bagi pembuat kebijakan di kota Bandung. Fokus bahasan terutama pada karakteristik mereka, alasan memilih profesi ini, dan lokasi bisnis yang disukainya.

Kata Kunci: Informal Sector, Street Vendor, Policy making

1. INTRODUCTION so-called "urban informal sector" (UIS) is more diverse than the rural one and includes a vast and heterogeneous The informal sector is known by variety of economic activities through many different names according to which most urban families earn their different contexts and points of view. livelihoods. Variously referred to as the informal economy, unregulated economy, Activities of the urban informal unorganised sector, or unobserved sector in the public arena of cities are employment, to cite but a few of its titles, particularly apparent in street-based this sector typically refers to both trading, which is widely known as street economic units and workers involved in vendors or pedagang kakilima in local a variety of commercial activities and language. Although these street occupations that operate beyond the enterprises are mostly hidden from the realm of formal employment (Williams state for tax, they involve very visible and Windebank, 1998; Suharto 2002). In structures, and are often subject to certain the urban context, the informal sector limited administrative processes, such as refers to small enterprise operators simple registrations or daily collection selling food and goods or offering fees. The main forms are retail trade, services and thereby involving the cash small-scale manufacturing, construction, economy and market transactions. This transportation, and service. These

27 Informasi Kajian Permasalahan Sosia/ dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September 2003 fees. The main forms are retail trade, also concentrated in other areas, such as small-scale manufacturing, construction, public markets, commercial complexes, transportation, and service. These and bus stations, where crowds economic activities involve simple congregate at the day and night. Above organisational, technological and all, they are found in public spaces and production structures. They also rely low-income residential neighbourhoods, heavily on family labour and a few hired usually through squatting on public or workers who have low levels of economic privately owned land. and human capital and work on the basis of unstandardised employment In Bandung, very little, if any, laws (Suharto, 2000; 2001; 2002). attention has been paid to integrating the urban informal sector in urban With reference to street enterprises, development planning. While the the issue of the informal sector is municipal and district government have particularly related to its business no adequate understanding on the operation. The street traders operate their nature of micro-economic activities, the businesses in the areas that can be local government authority has not classified as public spaces and are seriously considered the aspirations and originally not intended for trading needs of street traders. purposes. As most street trading occupies busy streets, sidewalks, or other This research therefore address public spaces, it is often considered these issues, and integrate them within illegal. This status makes these traders the urban space and economy. The victims of harassment and threats from results is useful for policy makers and police and other government authorities. city administrators to identify a number In Bandung, for example, the of policy options and programmes in municipality government continues to accommodating the operation of small perform clearance operations in the five and micro-enterprises. The provision of busiest areas: the Alun-alun Square and suitable workshop sites and of access to the streets of Asia Africa, Dalem Kaum, appropriate technology and credit at a Kepatihan, and Dewi Sartika. It is relatively lower cost, as well as the believed that these areas should be free provision of adequate and appropriate from the "nuisance" of pedagang kakilima, shelter and infrastructural services, are especially during event days. This some examples of the possible actually often involves a policy of"clear­ interventions. the-streets and arrest-vendors" that removes the street enterprises from the In addition, the results can also be areas in which they have been operating. shared for policy analysis in some advanced countries, especially in the In Bandung, there are areas of European Union nations which are now visible agglomeration of such witnessing the exclusion of an increasing enterprises, particularly along the major production of the citizens from both transport arteries and streets (e.g. the formal employment and welfare streets of Asia Africa, Dalem Kaum, provision and hence experiencing the Kepatihan, and Dewi Sartika) and in growth of the informal economy road reservations in the city. They are (Williams and Windebank, 1998:29).

28 lnformasi Kajian Permasalahan Sosia/ dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September_ 2003

2. LITERATURE REVIEW work operating either as home-based or public-based activities. Activities of the 2.1 Defining the Urban Informal Sector urban informal sector in the public arena and Street Traders of cities are particularly apparent in street-based trading. Although these In most countries, both developing street enterprises are mostly hidden from and developed ones, activities in the the state for tax, they involve very visible informal sector were not included in structures, and are often subject to certain national employment statistics (Suharto, limited administrative processes, such as 2002). In an attempt to bring this sector simple registrations or daily collection to national attention as well as to reduce fees. the concern over high unemployment, the inclusion of the sector in national Putting the distinction of street figures has now become a common traders under the umbrella concept of feature in many developing and urban informal sector, Suharto's study in developed nations alike (see Portes, Bandung (2002) generates a typology of Castells and Benton, 1989; Thomas, those categorised as street traders or 1992; Williams and Windebank, 1998). pedagang kakilima compared to other However, their activities, which are urban informal activities as shown in mostly unregistered and unrecorded in Figure 1. On the basis of observations national income accounts, are still the and interviews on their appearance main determinant in referring to the suggest that the pedagang kakilima in sector as informal. The main reason is Bandung meet all or most of the that the activities are almost always following criteria: outside the scope of state regulation and protection. Even if their activities are 1. They operate in public premises, which registered, the informal sector does not are not intended for business follow any labour protection, job security purposes, such as the roadside, and other protective measures of the pavement and other connected-to­ workplace (see ILO, 1993; UNDP, 1997; street premises (e.g. near public market, Williams and Windebank, 1998). the square, green areas). 2. They trade a variety of items In the urban context, the informal categorised as food, goods, or services sector is often referred to as consisting for economic benefits involving market of small enterprise operators selling food transactions. and goods or offering services and thereby involving the cash economy and 3. They form linkages with the rest of market transactions. This urban economy, especially backward informal sector is more diverse than the linkages with the modem-formal sector rural one and includes a vast and (e.g. many commodities sold by heterogeneous variety of economic pedagang kakilima are industrially activities through which most urban manufactured goods). families earn their livelihoods. The main 4. They are unlicensed, but not forms are retail trade, small-scale categorised as criminal by law or the manufacturing, construction, regulations of the Bandung transportation, service, and domestic administrative area.

29 lnformasi Kajian Permasalahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September- 2003

5. They do not pay tax, but pay daily fees 8. Their employment is not protected by to the city authorities such as for any sort of employment benefit either sanitary and security purposes. from government (e.g. social services, 6. Their businesses involve family pension) or labour union (e.g. members in both ownership and insurance, fixed and standardised management systems. salaries). 7. Their enterprises are small and are 9. Their establishments are characterised mostly own-account workers or by inadequate infrastructure and employing less than five workers, technology, and limited economic and including unpaid family members or human capital. apprentices.

Clandestine activities Transport sector (e.g. Crime, gambling, - (e.g. Becak drivers) prostitution) - Street food - enterprises

The Pedagang kakifima Urban Street-based - Street good ~ >---- (static and semi- - - enterprises Informal activities static vendor) Sector -

Street Mobile or itinerant - services Non street-based traders (e.g. Pedagang enterprises ~ ~ activities (e.g. keliling, pedagang Household sector asongan)

FIGURE 1: A typology of pedagang kakilima Source: Suharto (2002: 189) Note that this study avoids the "underground", or "clandestine terms "shadow", "invisible", or "hidden economy". It is held that unless the economy". This means that it does not informal activity is illegal by nature, it is assume the informal sector as an considered legitimate and legal in all economic activity in the hidden other respects. The term informal sector interstices of contemporary society. It is is therefore not synonymous with argued that the informal sector is criminal, antisocial, or morally observable in the communities in which questionable activities, such as theft, it takes place and even in areas where prostitution, drug dealing, or gambling. informal activity is condoned, it remains 2.2 Role of the UIS visible not only to society, but also to the state authorities (Williams and The role of the urban informal Windebank, 1998). This study also sector (UIS) in development has been one avoids the other common tendency of of the many contentious issues in the referring to the informal sector as a public policy area. In Indonesia, criminal activity, known as the "black", evaluation and policy attention toward

30 Informasi Kajian Permasalahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September· 2003 the urban informal sector is mainly distribution of incomes in rural as well concerned with the high growth rate of as in urban development. During the the sector and with its negative effects 1980s and 1990s, the number of those on the urban built environment. This is who constitute the economically active especially true for street vendors, the population and who depend on the most dominant sub-group of the urban informal sector as their main source of informal sector in the country (Suharto, employment and income has been 2002). Their continued presence in the consistently more than sixty percent of markets and sidewalks of the cities the total labour force (see Sethuraman, produces a variety of conflicting 1985; Evers and Mehmet, 1994; Firdausy, opinions about the importance of their 1995; Azis, 1997; CBS, 2001). In 1998, it retailing activities in the overall urban consisted of 43 million in rural areas and economy of Indonesia. 14 million in urban areas or about 65 percent of the total working population The importance of the informal (CBS, 2001; Hugo, 2000:125). sector to Indonesia's development is obvious. High and uneven population As widely reported by national and distribution, an increasing rate of local newspapers, the growth of the growth of urban population, and the informal sector was particularly high effects of slow industrialisation call out during the recent economic crisis. The for initiatives to create employment crash of the modern economy between alternatives for an unprecedented 1997 and 1999, involving the closure of growth of the labour force. banks, factories and service agencies, pushed the newly unemployed to more During the 1990s, the employment than double in the informal sector. In the situation in Indonesia was particularly case of street enterprises, the increase is difficult as employment opportunities in even more impressive. In Jakarta and the formal sector were unable to absorb Bandung, for example, from the end of the growing labour force within the 1996 to 1999 the growth of the street national labour market. Between 1990 vendors was estimated at 300 percent and 1997, while the labour participation (Kompas, 23 November 1998; Pikiran rate increased from 55 percent to 58 Rakyat, 11 October 1999). percent, the work opportunity rate decreased from 97 percent to 95 percent. Despite the fact that the informal As a result, the open unemployment rate sector provides a livelihood for huge increased from 1.7 percent to 4.7 percent numbers in the national labour force, this during the same period (CBS, 1995:19; sector continues to have low CBS, 1997:1). productivity, poor working conditions, low incomes and few opportunities for Indonesia has one of the largest advancement. Although some of the more informal economies in the world. As in structured groups of the informal sector, many other Third World countries, the such as street traders, tend to have an informal sector in Indonesia still entrepreneurial character and sometimes accounts for most of the total high incomes, it is widely recognised that employment and has, therefore, a larger the informal sector is still vulnerable, impact on creating a more equitable with little capital, limited markets,

31 lnformasi Kajian Permasalahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September 2003 inadequate economic returns, and low accommodation could lead to better levels of living standards (Suharto, management of the urban economy and 2001). the environment than otherwise. 2.3 Business and Locational Decisions However, the integration of the urban of the UIS informal sector into the urban planning needs to address a number of issues. At According to Yankson (2000:315), least, the issues involve questions as the urban informal economy expands, regarding how to provide the sector with there is bound to be a proliferation of access to appropriate worksites, workshops and worksites or an adequate and suitable workshops, intensification in the use of informal environmental services and security of economic locations. This would breed tenure for sites of the vendors (Yankson, and exacerbate environmental problems, 2000). such as traffic and health hazards, which are associated with the operation Perera (1994) has argued that the of informal economic activities. lack of suitable premises for production Therefore, there is an increased demand and marketing is a fundamental for suitable sites for such enterprises limitation of the growth of informal with requisite infrastructure and enterprises, because such a deficiency services. Unless the urban development inhibits capital investment and the planning responds with the appropriate creditworthiness of these enterprises. policy and programmes, the prospects Hence access to permanent workplaces for their growth and development at suitable locations is essential for cannot be initiated. A failure of the urban capital investment, increased production management system to integrate them in and productivity for informal the city master plan will result in a enterprises. According to Sethuraman haphazard and scattered locational and Ahmed (1992) this approach could pattern of informal economic enterprises facilitate technological upgrading aimed within the urban built environment. at improving the quality of the goods and services produced within the informal In cities of developing countries, economy. informal economic activities are found in almost all main roads and arteries as Yankson (2000:316) suggested that well as in residential areas. Therefore, it the location and site selection of the is important to understand why the operators of informal economic units is operators of these small-scale informal at the core of the integration issue. He enterprises choose the sites or locations maintained that the locational pattern of where they run their enterprises. To the units has influenced the operators' arrive at this understanding, the decisions to select land use configuration analysis of some theoretical models of and to invest in them. The locational industrial locations is required. pattern also has a bearing on employment and environment Amin (1993), amongst others, has relationships. In views of a number of suggested agenda for the integration of authors, such as Wbwer (1929), Isard the urban informal sector in the urban (1954), Losch (1954) Alonso (1975), planning process. He believed that such Glasson, 1978, and Hoover, (1984),

32 Jnformasi Kajian Permasalahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September -2003

Yankson further outlined the main tenet This uncertainly arises from the of location theories. He stated that there illegal status of most small are two main lines in the locational enterprises, the lack of tenure or theories: the classical location models, security of their plots, their inability which seek to maximise profits through to secure suitable sites and legal title the last cost approach, or via the to land, the illegal status of their maximisation of sales. However, workshops and a land use planning Yankson (2000:316) confirmed that: system that does not take their interests into consideration. Location is not simply a matter of achieving maximum profits, whether To analyse business and locational through minimisation of costs or decisions of the urban informal sector, maximisation of sales. There are other this study draws on the issue of site variables that need to be considered: selection guided by Dijk' s model and locational interdependence, the developed further by Yankson difficulty of evaluating the relevant framework. The model outlines a variables, especially costs in different scenario of location and identifies the locations, market conditions and the factors that are likely to influence the policies of rival firms, and whether relocation of an enterprise. It includes: firms indeed seek to maximise their security of tenure, the personal relations profits or not. between an entrepreneur and his or her customers, and the price of a plot or According to Yankson (2000), the workshop. classical model is not a good framework for studying the location decisions of small firms, particulalrly in developing 3. OBJECTIVES OF THE STUDY countries. The model does not allow for uncertainty, hence it probably cannot satisfactorily explain the spatial The research is basically intended behaviour of small entrepreneurs in to identify major characteristics of street non-Western countries. He then argued vending and working and environmental that the behavioral model developed by conditions of the enterprise in which they Pred in 1967 is likely to be more are operating, such as business profiles, beneficial and complementary to the social and economic determinants of classical model (Yankson, 2000:317). It street vending activities, and factors focuses on people's incomplete influencing the selection of worksites of knowledge and inability to utilise the the street traders in the urban space available information in order to obtain economy. optimal location in terms of concerned profits. These considerations are then used by Dijk in 1983 to develop a 4. RESEARCH STRATEGIES framework,, called behaviouristic location model, to analyse small 4.1 Research Methods enterpirses in which the model places uncertainty as a main point (Yankson, The type of research undertaken by 2000). As Yankson (2000:317) asserts: this study was the triangulation method. This mixed-research strategy involves

33 Jnformasi Kajian Permasalahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September _2003 different quantitative and qualitative of employment as it has large and varied research approaches and multiple informal activities, including household­ techniques of data collection, such as based commodity production, street surveyed questionnaires, observations, traders, and itinerant petty traders focused interviews, and document (pedagang keliling). study. The fieldwork for this study was located in Bandung Metropolitan Region BMR administratively consists of (BMR) for about three months, between two areas: the district (kabupaten) and the June and August 2003. municipality (kotamadya). Four research sites were selected within both areas on The triangulation method refers to the basis of "multistage cluster sampling a combination of strategies to study the technique" (de Vaus, 1991:67) or the area same phenomenon employing "between sampling with multi-stage classification methods" or "across methods" derived before sampling (Suharto, 1994:31). from multiple quantitative and These sampling blocks include the street, qualitative techniques of data collection public market, commercial complex, and (Denzin, 1978; Creswell, 1994; Das, 1983 bus station - areas which typically ; Suharto, 2002). As identified by contain a cluster of street enterprises. The Greene,Caracelli and Graham (1989), the respondents of the research were purpose of the triangulation method is operators of street vending selected on particularlyto seek convergence, the basis of place of operations and corroboration, and correspondence of types of productions. results from the different research strategies (Suharto, 2002). This method In this study, the nine sites in leads to more convidence in the results municipality and district regions were and generates an innovative approach chosen following their main functional to the study of social issues. activities as shown in Table 2: (a) Market (pasar) owned by local government; (b) 4.2 Selection of Research Sites and Private shopping area (pertokoan) with Respondents small and medium-sized shops; (c) Bandung Metropolitan Region Commercial complex with large-sized (BMR), the city selected as the study area, malls, super-markets, and private shares much in common with other large business offices; and (d) Public transport Indonesian cities in terms of the level station: a transportation destination and pace of urban development as well commonly situated just outside or as the severe economic downturn adjacent to, the street, market or private associated with the recent structural shopping area. adjustment period. Bandung is the capital of West Java province situated All locations reflect their physical 180 kilometres southeast of Jakarta, the proximity to the main road and also their capital of Indonesia. With population of reliance on activities located on the road. over 4 million, BMR is one of the At these locations, public transportation Indonesian cities that serves as a passes along the road at all times of the regional centre for administrative and day and night and there is a business activities. This makes it a considerable volume of traffic. Their destination for rural migrants in search locations in relation to both the central

34 /nformasi Kajian Permasalahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September 2003 city and the dominant economic facilities areas, they share many similarities, reveal certain marked differences. particularly in terms of their geographic However, since all of the nine sites were and demographic profiles. located in relatively connected urbanised Table 1: Number of Street Enterprises under Study in Municipality and District Region

REGION NUMBER PERCENT Municipality - Jalan Dewi Sartika (commercial complex, private shopping area) 24 13.48 - Pasar Baru (market, private shopping area) ~ 11.24 - Leuwipanjang (bus station) 28 15.73 - Kebon Kalapa ( commercial complex, pick-up station) ~ l l.24 District - Jalan Banjaran (private shopping area) 22 12.36 - Jalan Dayeuhkolot (private shopping area) 25 14.04 - Pasar Banjaran (market, private shopping area) ~ l l.24 - Terminal Banjaran (pick-up station, market) 9 5.06 - Ciparay (market, private shopping area) IO 5.61 Total 178 100.00 Source: Fieldwork (2003)

5. RESEARCH FINDINGS (municipality) and kabupaten (district) areas, since recent and extensive surveys 5.1 BMR and Street Enterprises on this matter are not available. In the case of street enterprises (known locally Bandung Metropolitan Region as pedagang kakilima), however, it is (BMR) is one of the three largest urban possible to figure out their numbers, agglomerations in Indonesia, after distribution, and some main features. In Jabotabek Gakarta metropolitan region) 1999, the Municipal Government and Gerbangkertosusilo (Surabaya (PEMDA) commissioned a survey to metropolitan region). In 2001, the explore the basic characteristics of the population of Kotamadya Bandung street trader within its own reached 2.1 million with an average administrative area. PEMDA estimated population density of 12,758 people per that the number of street traders was square kilometre. Whilst, with an 32,000 (PEMDA, 1999). average population density of 1,207 the population of Kabupaten Bandung was Compared to the city population, 3.7 million people in the same year. the vendor density per 1,000 city inhabitants is about 15.2. This means that It is not possible to determine exact one vendor serves about 66 people. Street statistics for the urban informal sector enterprises are agglomerated in specific in Bandung for both kotamadya locations, which are close to places

35 lnformasi Kajian Permasalahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September. 2003 where they can be approached easily and of the products. This seems to reflect that favourably by their consumers. Specific street traders have market awareness. sites for fieldwork were therefore selected Thus, although the trading in each on the basis of dominant economic location encompasses all three kinds of activities and facilities, which contain a businesses (food, goods, and services), pocket of street traders. street traders in Kebon Kalapa, for example, are more likely to sell food, since 5.2 Business Profiles of Street their locations are not far from schools, Enterprises universities, hospitals, and pick-up Generally, street enterprises can be station, where food consumers are very categorised as those selling food (57.9% ), numerous. In general, one main factor trading goods (33.7%), and offering contributing to the large number of street services (8.4%). For example, food vendors in BMR is economic: the high vendors include meals, drinks, cigarette, demand for lower price items. The candies. Good vendors consist of those reason that city inhabitants purchase selling personal needs (shirts, towel, food, goods or services from street spectacles, wallet), basic commodities enterprises is because the prices of most (toothpastes, soaps, perfumes, candles, street products are always lower than lamps) and household wares (beds, those for restaurants, shops or tables, chairs, buckets, saucepans). supermarkets. Almost all strata of the Service vendors may range from" creative community were observed to purchase services" such as shoe-shining, hair items from street vendors. However, the cutting, tailoring, and fortune telling to main consumers generally come from: "repair services" such as the reparation middle to lower classes, from of shoes, watches and clocks, keys, schoolteachers to taxi drivers, from office bicycles, lighters, electrics, electronics, guards to becak (pedicab) drivers, and umbrellas, and home appliances. In from office clerks to construction selling a variety of items and services, workers. Street vendors ensure that the vendors are found in various places everyone gets a bargain and that and structures. The majority of vendors different consumers are offered items of use cart (dorongan) (39%), kiosk (34%) reasonable quality and at affordable and mat or basket (23.6%) for their wares prices. and operate their business on the pavement, street or roadside (badan Most street traders in Bandung are jalan), public facility, sewerage and a conducted by men (71.3%) who operated green area, respectively. Some street their business during the day (78.7% ), traders also sometimes shift and roll their night (3.4%) and day and night (17.4%). locations from, for instance, the Of the 178 street traders, 37.1 percent had pavement near a school or hospital in achieved Junior High School (12 years the morning to the roadside at the schooling), followed by 34.8 percent and entrance of the square, park, or movie 22.5 percent of those who completed theatre, where crowds congregate at Primary Education (9 years schooling), night. and Senior High School (15 years schooling). For very small enterprises, The variety of products sold in the the amount of capital needed to start and street tends to follow a potential market operate a business varies considerably

36 Infonnasi Kajian Pennasalahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September 2003 \ from activity to activity, and the larger substantially higher than the poverty line and more technically skilled the established by the World Bank of $1 per establishment, the higher the demand day per capita. On a monthly basis, this for capital (see Suharto,2002). For earning is also well above the standard example, street traders offering services minimum wage of formal employment, such as hair cutting and shoe-shining known as UMR or upah minimum regional require little initial and working capital, (regional minimum wages) of nearly while traders operating a street Rp.500,000 per month ($62.5). restaurant, or selling clothes, shoes, and fruits need substantially more. Based on Several studies revealed the same the mean value of the stock, the average pattern as this finding that, on aggregate, working capital of the street vendors the incomes in the informal sector were was estimated to be slightly above comparable to those in the formal sectors Rp.1,500,000 or calculated at the rate of and even superior to some of them (e.g. $ 1= Rp.8,000, about $187. Sources of Thomas, 1995, Tinker, 1997). Tinker's capital for these small enterprises study (1997:174), for example, revealed typically come from informal schemes that while street food traders in Thailand such as from family (47%) and earn incomes that are relatively higher moneylenders (23 %). Family businesses than the lower to middle ranges of waged are critical elements in the economy of employees, in Pune, 75 percent of the street enterprises. In most countries the traders earn an income above the official urban informal sector, notably street poverty line for a family of four - trading, is a family business and hence although 15 percent of the traders a larger circle of family or kin labour is achieve this level by combining vending essential to the functioning of the street income with other sources - and 10 establishment (Tinker, 1997:154-5). The percents of the traders earned income information about the source of capital below the poverty line (see also Suharto, demonstrates this pattern of family 2002a, 2002b) business. It shows that most establishments derived capital from After this information about informal schemes such as from family socioeconomic background of street (55.6 %) and relatives (7.3%). enterprises, the rest of the paper is dealing with the reasons of the business In terms of trading revenues, most operators to participate in trading and street traders seemed to have no for selecting worksites. Understanding difficulty to remember expenditures and these variables is very important to know profits although they do not keep written the motive behind their participation in records on their cash flow. After the business, as well as to provide weighting up their answer against the additional information about the history observed daily cash flow, it was found of business activities. This information that the vendor's daily average profits can be used to underline policy were about Rp. 53,686 ($6.7) placed their alternatives in integrating the urban revenues up to Rp.1,610,580 ($201) per informal sector into urban planning. In month. The findings appear to show that this regard, street traders were asked to street traders make a reasonable profit express their opinions on the nine areas from their trading. This earning is of reasons of participating in street

37 /nformasi Kajian Permasalahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September 2003 enterprises (Table 4.2) and ten factors in comparison to other available and determining their selection of worksites accessible alternative sources of income, (Table 4.3). Six attitudinal scales (from they perceived that street trading is not strongly disagree to strongly agree) were a job that provides adequate income and used to measure the response toward high social status as shown by the corresponding items with response range average mean scores of 2.91 and 2.15 was 1 to 5. respectively. This may be caused by the fact that the poverty line and regional 5.3 Socioeconomic Reasons to become minimum wages are actually very low. Street Traders They are set out on very basic physical The majority of respondents needs (calorie intake) and does not take perceived that they participate in street into account social needs, such as trading because of the difficulty of entry education, health and housing. As a into the formal job sector (4.11) or result, while those who have incomes alternatively, due to the ease of entry into below poverty line and are unable to street trading (3.78). In order to obtain purchase their basic needs can be some incomes, it is relatively easy to start labelled as being extremely poor or and operate the business. They can, for destitute, those who are able even to meet example, adjust it to their knowledge and the costs of the basic necessities cannot skills, or they can operate it by following automatically be labelled as "not poor" their predecessor through kinship since their incomes are still in the lower networks. As to the rest of the variables tail of the income distribution of the (questions number 6 to 9), their low country. They are still likely to face average mean (2.15 and 3.25) may problems of overcrowded housing, lack indicate that these reasons have had of access to transport and recreation relatively less influence on their decision. facilities, which, although not being life­ It is interesting to note that that although threa tening, represent deprivation their return level is higher than the compared to the rest of the population. poverty line and is relatively favourable Table 2: The Reasons to Participate in Street Enterprises REGION MEAN STANDARD DEVIATION It is difficult to obtain a job in the formal sector 4.11 1.013 Easy to enter/start the street enterprises 3.78 0.832 Easy to operate the street enterprises 3.71 0.722 It is a job that is suited to knowledge and skills 3.41 1.049 I am just following predecessors (parent, relative, friend, neighbour) 3.34 1.170 It is a job that is interesting to me 3.25 0.938 It is a job that is challenging to me 3.21 0.938 It is a job that provides adequate income 2.91 0.896 It is a job that provides high social status 2.15 0.703 Source: Fieldwork (2003)

38 Jnformasi Kajian Permasa/ahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September. 2003

5.4 Factors Influencing the Selection of streets. They know how to sell and make Worksites profits by selecting only those strategic locations where demand for their The result of the analysis presented products is high. in Table 4.3 show that the best location to attract customer appears to be the most As elsewhere, the popular image of important factor influencing their street vendors in BMR finds them location for business activities. This is agglomerating around potential business followed equally by availability of locations. In Jalan Dewi Sartika, Pasar access road (3.71) and lack of alternative Baru, and Kebon Kala pa, for example, sites (3.71). The table also shows that street enterprises surround the market avoiding harassment from security, (pasar), shopping area (pertokoan), and security of tenure or plot, and proximity commercial complex trading food, to house are important for street traders' commodities, and services to city decision in selecting their workplaces. dwellers. In Leuwipanjang and Terminal This information reveals that although Banjaran, on the other hand, street street traders were widespread in many vendors were found at and nearby the different places, their locations always bus and pick-up stations selling products reflected their reliance on economic to travellers and drivers. In addition to activities which were either located on, these locations, the street traders, mainly or affected by, the street. Thus, while food sellers, were also observed at the many street enterprises may clearly be entrance of schools, universities, and drawn from the main roads or hospitals, providing food to their intersections, some of them clogged customers, such as pupils, students, sidewalks or pathways reflecting their patients, staff and visitors (see Suharto, physical proximity and access to the 2002a). Table 3: The Reasons for Selecting Worksites

REGION MEAN STANDARD DEVIATION Best location to attract customers 3.77 0.787 Availability of access road 3.71 0.865 Lack of alternative sites 3.71 0.998 Harassment from security avoided 3.39 0.964 Security of tenure or plot 3.25 0.961 Proximity to house 3.17 1.192 Free workshop space 2.80 1.054 Plot allocated by municipal authority 2.74 1.058 Easy combination with family responsibility 2.72 0.889 Availability of services at site 2.67 0.996

Source: Fieldwork (2003)

39 Informasi Kajian Permasalahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September :2003

6. IMPLICATIONS FOR POLICY With reference to income earnings, MAKING it seems likely that most street traders are not living in poverty and that they are not the poorest of the society, Preliminary findings of this chapter especially measured by the poverty line have basically described profiles of the of $1 a day. While in aggregate and study area and respondents of this average most street trader incomes are study. The description on profiles of the higher than the poverty measure, on the study area provided a review of BMR, basis of the regional minimum wages, its economy and its inhabitants. Features street trading provides a favourable of urban development in the region source of income compared to the low reflect several important patterns of skilled formal sector and other visible development trajectory occurring in other alternatives, such as unskilled metropolitan regions, such as Jakarta construction workers. Metropolitan Region (Jabotabek) and Surabaya Metropolitan region (Gerbang The main factors determining the Kertosusilo), and more broadly in the reasons to involve in street trading is lack national context. The economic and of job opportunity in the formal sector. social development in Bandung has This is followed by the reasons that it is contributed to the level of easy to start, as well as to operate street industrialisation and urbanisation in enterprises, and that the urban informal which the contribution of agricultural sector is a job that is suited to knowledge sector to the BMR economy is decreasing, and skills of the operators. Referring to released by trade, manufacturing and literature review in chapter two, this service sectors. confirms particularly the dualistic and survival strategy perspectives. According In BMR most street traders were to the models, the urban informal sector found to sell foods and operate on the is referred to as a mechanism of survival streets adjacent to market, private strategies of the poor and unemployed shopping area, commercial complex and to make a living on the margins of public transport stations. Although the modern industrial economy. The types of products are varied, they diagnosis attributed the situation mainly generally consist of food, goods and to insufficient job creation in modem and services. The principal finding on the urban sector as the primary cause of the enterprise characteristics of street trading informal economy. reveal that with many street vendors obtaining some kind of benefit from On the basis of the factors kinship networks, especially source of influencing the selection of sites, the capital, the largest enterprise category of urban informal street vendors in BMR the street vendors can be referred to as a perceive that business location should be family establishment. As a family attractive to customer and have access enterprise, street trading in BMR to main roads in order to offer wider involves kin relationships in its history markets. If the government plan to of business activities as well as in its provide alternative sites, they should be production processes and employment harassment-free from security officers, characteristics. that they should have security of tenure,

40 Infonnasi Kajian Pennasalahan Sosial dan Usaha Kesejahteraan Sosial, Vol. 8 No. 3 September 2003 and that the operator should have Pikiran Rakyat (1999), 11 October proximity to house. Portes, Alejandro, Manuel Castells, and Lauren A. Benton (1989), "Introduction", in Alejandro Portes, Manuel Castells, and REFERENCES Lauren A. Benton (eds.), The Informal Economy: Studies in Azis, Iwan Jaya (1997) "The Increasing Advanced and Less Developed Role of The Urban Non-Formal Countries, Baltimore: Johns Sector in Indonesia: Employment Hopkins University Press, pp.1-7 Analysis within a Multisectoral Framework" in Gavin W. Jones Sethuraman, S.V. (1985), "The Informal and Pravin Visaria, Urbanization Sector in Indonesia: Policies and in Large Developing Countries: Prospects", International Labour China, Indonesia, Brazil, and India, Review, Vol. 124, No. 6, pp.719-735 Oxford: Clarendon Press, pp.143- Suharto, Edi (1994), The Role and 159 Performance of Local Organization in CBS (1997), Employment Statistics: Poverty Alleviation Programs: A Statistical Tables, Jakarta: CBS Comparative Study in Selected Villages of Majalengka, Indonesia, CBS (2001), Employment Statistics: Selected Master Thesis, Bangkok: Asian Tabl es, www.bps.go.id/ Institute of Technology statbysector/ employ/ tablel.shtml (accessed 7 May 2001) Suharto, Edi (2000), The Informalisation of Indonesian Economy during the CBS (Central Board of Statistics) (1995), Crisis, 1997-1999: Some Evidence Indikator Kesejahteraan Rakyat from Kakilima Street Enterprises in (Welfare Indicators), Jakarta: CBS Bandung, paper presented at the de Vaus, D.A. (1991), Surveys in Social First Conference of Indonesian Students in New Zealand held at Research, Sydney: Allen and Canterbury University, Unwin Christchurch, 15 - 16 November Evers, Hans Dieter and Ozay Mehmet Suharto, Edi (2001), How Informal (1994), "The Management of Risk: Informal Trade in Indonesia", Enterprises Cope With the Economic World Development, Vol.22, No.l, Crisis? The Case of Pedagang Kakilima in Bandung, Indonesia, pp.1-9 paper presented at New Zealand Firdausy, Carunia Mulya (1995), "Role Asian Studies Society 14th of the Informal Service Sector to International Conference held at Alleviate Poverty in Indonesia", Canterbury University, The Indonesian Quarterly, Vol.XXIII, Christchurch, 28 November - 1 No. 3, pp.278-87 December Hugo, Graeme (2000) "The Impact of the Suharto, Edi (2002), Profiles and Dynamics Crisis on Internal Population of the Urban Informal Sector in Movement in Indonesia", Bulletin Indonesia: A Study of Pedagang of Indonesian Economic Studies, Kakilima in Bandung, PhD thesis, Vol.36, No.2, pp.115-138 Massey University, New Zealand Kompas (1998), 23 November Williams, Collin C. and Jan Windebank (1998), Informal Employment in the

41 lnfonnasi Kajian Pennasalahan Sosial dan Usaha Kesejahteraan Sosia/, Vol. 8 No. 3 September 7003

Advanced Economies: Implications for Work and Welfare, London: Routledge Yanks on, Paul W.K. (2000), "Accommodating Informal Economic Units in the Urban Built Environment: Petty Commodity Enterprises in the Accra Metropolitan Area, Ghana", Third World Planning ·Review, Vol.22, No.3, pp.313-334

42