Meet on Informal Sector's Contribution

City streets are lined by barbers, cobblers, waste recyclers, vendors of vegetables and every other imaginable kind of goods.

They join the legions of workers that comprise the informal sector, that shadowy part of the economy, where companies -- if they can even be called that --don't exist on official registers and workers don't have secure contracts or benefits and social protection.

"This sector is hugely important to developing countries, having ballooned over the past decades as high rates of urbanisation, population growth and declining wages have pushed people out of the formal sector,"

said Professor Bishnu Dev Pant, director of the Centre for Economic and Applied Statics (CEAS)-South Asian Institute of Management.

"To gauge their contribu tion in real terms, brain storming is needed," he said adding that South Asian In stitute of Management is holding an international con ference on `Measuring Infor mal Sector in Developing Countries' jointly with Inter national Association for Re search on Income and Wealth (IARIW) on September 24-25 in Kathmandu.

In most developing coun tries, most people depend for their livelihood on the `informal economy' as their incomes come from subsistence farming or from operating small unincorpo rated enterprises.

Although the largest part o GDP may be generated by the formal economy, mos people in developing coun tries live in the informal one according to Pant.

By its nature the informa economy is difficult to measure. Informal enterpris- es are not usually listed in - statistical registers used for official surveys, so indirect - methods have to be used to estimate their contribution - to value addition, output and - employment.

"Measuring the informal - economy is therefore one of - the main themes of the Spe cial Conference," Prof Pant said adding, "But measure ment is only useful if it serves - the needs of policy makers.

The conference will also consider the more basic questions of what needs to be measured and how measur ing the wrong things may - lead to bad policy-making."

"Yet, there's scant data on f the informal sector, largely because of its high turnover, t the reluctance of informal - workers to participate in offi, cial survey and the small size of informal enterprises. This l has a dealt death blow to sound policy-making in small economies where the informal sector plays a big role," he said adding that traditional survey methods will need to be totally overhauled to capture the full complexity of the informal sector.

This Special IARIW Conference -- that will have 50-75 participants -- will look at both economic and social aspects of the informal economy.

How large it is in terms of employment and output, where families in the informal economy stand in the overall income distribution, what access they have to government education and health services, how they are served by non-profit institutions, how they cope with food shortages and price hike of basic foodstuffs, and what government policies may be helpful or harmful in promoting the welfare of those who live in the informal economy.