Employers' Organizations and Enterprise Development in the Informal Economy:
Moving from informality to formality

The informal economy accounts for a large proportion of national economic activity in many regions of the world. In recent years, it has grown rapidly in almost all regions. It is not therefore a temporary or residual phenomenon. Indeed, a large part of new employment and businesses, especially in developing countries, are created in the informal economy.

Why is it important for employers' organizations to take action on the informal economy?

Employers' organizations, particularly in developing and transition countries, are strategically well-placed to provide policy guidance on how best to address the issue of the informal economy and to reach out to informal operators.

Over recent years, the ILO, its Bureau for Employers' Activities (ACT/EMP), and an increasing number of employers' organizations at the national and branch levels have reached a broader understanding that, by adopting initiatives in the area of the informal economy, representative organizations of employers:

• can play a significant role in drawing attention to the pressing need for action and in bringing into the mainstream the considerable potential for employment and wealth creation that is currently marginalized in the informal economy;
• in terms of the interests of their member enterprises, they can make contributions to achieving a more level playing field by ensuring that informal competitors are subject to the same requirements as their members, thereby spreading the tax and social protection burden more evenly and equitably - moreover, any simplification of administrative rules and regulations is likely to benefit both formal and informal businesses in equal measure; and
• they can also enhance their own standing as important national actors by helping to show viable ways of addressing a problem which has taken on enormous proportions in many developing and other countries.

Guidance for action by employers' organizations

For this reason, over the past couple of years, ACT/EMP has been carrying out a programme to assist employers' organizations take action on the informal economy with the overall aim of stimulating enterprise development in the formal economy. This has been done through a programme, which centered around two key themes, namely lobbying and representation and the provision of services. Drawing together the lessons learned, this CD-ROM is intended as an information tool to guide action by employers' organizations in relation to the informal economy. Included are a number of studies done by employers' organizations as well as descriptions of different types of action taken. The various types of interventions are documented and analyzed to provide information and reference and thereby help other employers' organizations or business associations to shape their actions and interventions.

The main contents of this CD-ROM come from studies and experiences by employers' organizations in Bulgaria, Brazil, Chile, Colombia, Dominica, Ecuador, Grenada, Guatemala, Jamaica, Kenya, Mexico, Mongolia, Panama, Peru, St. Kitts & Nevis and Turkey. In Latin America and the Caribbean this is largely through analytical studies, while in the other four countries, a more action-oriented approach has been taken.

The format allows the reader to use the information and material in the CD-ROM flexibly. Overall the CD-ROM is structured into three sections, which are:

• Employers' organizations and the informal economy provides a brief overview of the issue of the informal economy and it seeks to explain why and how this issue is important for employers' organizations. Additionally, the section provides some general key points and definitions on the issue of informal economy.
• Country and regional experiences comprise very substantive information from the experiences of employers' organizations. The information is structured with abstracts from the main findings of the studies for Latin America and the Caribbean respectively. The complete studies are also included. Similarly, there is a brief abstract from the main interventions and results in each of the other countries. Further information can then be found in publications, notes, articles and films which are attached to a number of the country and regional abstracts. Each country or regional abstract can be read on its own, with or without reference to the further information available, or in combination to suit the needs and interests of the user.
• Library includes general reference material on the work of the ILO on the informal economy. This section is meant to provide easy access to recent publications and articles on the informal economy. The documentation contained herein does not, however, directly focus on employers' organizations.

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