Street vendor earns average Rs114,708/month: study

ISLAMABAD: The average revenue of street vendor in Pakistan is Rs114,708 and 29 percent of which is profit, researchers revealed on Tuesday, arguing that formal markets also get a positive spillover effect from the traffic attracted by the street vendors and stressed that strong linkages are necessary for substantial gains.

The study titled “Revitalization of Street economy in Pakistan: The Case of Islamabad” was presented by Dr Nasir Iqbal and co-authors during Pakistan Institute of Development Economics’ (PIDE) first ever Research for Social Transformation and Advancement (RASTA) conference at a local hotel.

The study explores the legal and economic dynamics of Street Economy (SE) in Islamabad Capital Territory (ICT).

According to the study, Pakistan has a large street economy operated by individuals and micro-enterprises across the country, mostly in urban areas. “There are no precise estimates on the quantum of SE due to the informal nature in Pakistan,” the Dr Iqbal said while presenting the study.

He said it was vital to gauge the contribution of SE in the overall economic landscape of the country due to the overwhelming involvement of individuals and micro-enterprises.

“This analysis helps to bring hidden employment and economic contribution to the national statistics,” he added.

Earlier during the session, Dr Anwar Shah, Associate Professor at Quaid-i-Azam University, Islamabad presented his paper titled ‘Informal Markets and Competition: An Analysis of Barriers to Entry of Legal Framework and Behavioral Attitude towards Khokha Markets in Pakistan’.

“Khokas (small vendor shops) are one of the key segments of the informal economy in Pakistan as they provide jobs to many people and facilitate consumers in doing various types of transactions,” Dr Shah said.

However, he said, barriers to entry put a bar on such access, leading to inefficiencies.

“The elimination of barriers to entry is important for promoting competition in the market and enhancing the welfare of people,” he added.

Dr Ahmed Waqar Qasim presented the findings of his unique study, titled ‘Sludge: The Administrative Burden’.

He defines sludge as unjustified frictions that make it difficult for the people to achieve what they want, frictions that make processes unnecessary difficult, and unwarranted interaction between citizens and public institutions all comes under the definition of sludge.

Dr Qasim cited examples of complicated application processes, duplicative paper work, and various attestations and so on.

“Why does it matter? It matters because it limits the growth. It is distributive and reinforces inequality and sludge can also be employed for rent seeking,” he said. According to PIDE findings, in various sectors, sludge at the national level costs Pakistan 39 percent of its GDP.

During third and last session on the second day of RASTA Conference, four papers were presented under the theme – Political Economy of Development and Reform. The details are as below:

Presenting his paper titles “Political Dynasties and Local Economic Development in Pakistan’, co-authored by Noman Ahmad and Muhammad Nasir, Dr Faiz Ur Rehman said despite the considerable attention paid by previous governments to the underdeveloped regions, intra-regional economic disparities were on the rise in Pakistan.

“While there can be several reasons for exasperating inter-regional inequality across regions, political institutions and politicians may explain a significant size of this inequality. Politicians exercise considerable de facto political power to redirect resources towards their regions which has a substantial cost for least developed region,” the researcher said.

The study’s findings suggest that constituencies with non-dynasts winners perform better than the dynast winners in terms of local economic development.

In his concluding remarks, Dr Nadeem ul Haque, Vice-Chancellor PIDE and Chairman RASTA Research Advisory Committee (RAC), said RASTA was an evolutionary process.

“We can follow global research but it has to be adopted as per our local needs and requirements,” Dr Haque said adding, “There is no looking back; we must only look forward to progress. We have already put enough ideas on the table for policymakers”.

Hope the policy corridors would take notice of it, the VC added.

He further said that local flavor to the research is all that we need. RASTA has researchers from across the country.