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Informal Economy

The informal economy accounts for a large portion of the national economic activity in many regions of the world. In recent years, this portion has grown rapidly in almost all regions, and especially in developing countries.

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.

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.
  • Make contributions towards 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.
  • 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.

ACT/EMP´s efforts to assist employers' organizations with stimulating enterprise development in the informal economy is based around two key themes, namely lobbying and representation, and the provision of services. Drawing together lessons learned, ACT/EMP has produced a CD-ROM information tool to guide action by employers' organizations in relation to the informal economy.

Included in the CD-ROM are a number of studies done by employers' organizations and descriptions of the different types of action taken. The various interventions are documented and analysed to provide information and reference to help other employers' organizations or business associations to shape their own actions and interventions. The format of these studies is such that readers are able to use the information and material flexibly.

The case studies come from 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.

For further information or to order a copy of the CD-ROM please contact us.

Moving from informality to formality

Last update: 20.09.2012 ^ top