Cape Town Partnership project manager Zarina Nteta reflects on lessons that Cape Town can learn from Bangkok's bustling night-time informal trade economy. 

A recent trip to Bangkok introduced me to how accepted and facilitated informal economic activity is in Thailand, including a dynamic night-time informal trade culture. Informal trade is pronounced in the city centre in areas such as Siam Square, where people navigate the streets on their after-work commute.

Pedestrians were not agitated by the bustle, if anything a socialised indifference to the occurring activity was felt. This flexibility, and the night-time occupation of the streets, stands in contrast to the emptiness and minimal activity in Cape Town's Central Business District after hours.

Is Cape Town's policy embracing informal economic activity?

A recent move to understand the informal economy, and move away from heavy regulation and mechanisms to remove informality in Cape Town, have led to more enabling policy paths by government. Local government is focusing on engagement and provincial government is unlocking avenues to embolden the informal economy.

The Western Cape Government's Informal Sector Framework outlines the provincial position on how the informal sector can encourage economic growth, while the City's Informal Trade Policy 2013 takes a comprehensive and inclusive policy approach to informal trade. The policy states:

The City acknowledges the legitimacy and role of the informal economy, in terms of its employment and economic growth prospects. Urbanising cities and towns globally are experiencing growth in the number of entrants to the informal sector. The informal economy also has low barriers to entry and serves as a social safety net; it also often sustains the livelihoods of foreign nationals who seek refuge from war torn countries. The informal economy is thus important socially and economically. The response to the sector will determine how well it thrives.

This is a step in the right direction, however, there is still much road to travel towards an environment that embraces informality as a meaningful contribution to our economy. Much of that "road" means allowing people to make a way, as opposed to regulating every aspect of public life.

An example is Cape Town's "By-law relating to Streets, Public Places and the Prevention of Nuisances". Many of the provisions in this by-law create an untenable and restrictive environment, which manifests in all aspects of public life. Although informal trade is gaining a favourable position with government, as a public activity much needs to be done to foster the kind of vibrancy that is felt in Bangkok.

To be or not to be employed

Thailand's unemployment is reported to sit at 0.6 %, largely because working in the informal sector is treated as being employed.  Women in Informal Employment: Globalising and Organising (WIEGO) reports that the cultural paradigm shift that lead to the embrace of employment in the informal economy was led by the recession of 1997, where formal employment became scarce and unreliable. 

Structural reasons such as an ageing population, the high number of informally employed workers (including agriculture) and limited social security for the unemployed maintain this low level of unemployment. According to the StatsSA Quarterly Labour Force Survey (Quarter 3, 2014) South Africa's unemployment rate sits at 24.5%, likely inflated by failing to fully recognise informal employment. However, embracing informal economic activity as employment cannot be viewed without a consideration of the labour law and revenue tax implications that would kick into gear through this recognition.

The inherent risk in South Africa is that much of the sector's dynamism, which is due to its relative distance from bureaucratic mechanisms, could be curtailed. So, how does Bangkok achieve its hybrid economy, a mix of both formal and informal economic activity?

Historically, the road to this vibrancy has been paved with draconian policy, shifting political agendas and a fixation with orderliness and sanitation – all of which negatively impacted informal trade.

The current about-turn that seems to positively influence informal trade in Bangkok is political will, and good and consistent city management by the Bangkok Metropolitan Administration (BMA). Policy instruments have improved too: the BMA's 12-year plan focuses on self-employment and facilitating access to capital and skills training for microenterprises. Since the 2000s, the BMA encourages "income-generating activities for self-reliance".

Limitations that cap the number of informal traders allowed in the city have been removed from policy. Additionally, an "asset-capitalisation" mechanism enables informal traders to use their permits as collateral for bank loans.

Other measures such as reducing trading fees have kept informal trading in the realm of "poverty alleviation" – despite many traders not necessarily being of the urban poor demographic.

Night-time trading: what does Cape Town's policy say?

The varied retail options available in Bangkok in the evenings are enviable. When considering why this is amiss in Cape Town, a good starting point is to look at the legislative framework governing trading conditions.

Of course culture also plays an important role, but it is instructive to begin with whether that informal night-time trading is inhibited by policy. The City of Cape Town's Informal Trading By-Law states that the City can determine the trading hours during which a permit-holder may trade and that an informal trader may not stay overnight "at the place where informal trading is conducted".

None of these provisions explicitly outlaw night-time trading in Cape Town's CBD. However, as a result of structural and economic reasons, traders don't trade at night.

Conversations with CBD traders allude to challenges in keeping office hours of 5pm, with family commitments and after hours transport in and out of the CBD being the key restrictions.

Others allude to staid demand during the evenings, with most consumers being workers who leave the CBD after 5pm. Although a handful of traders are present on the Long Street strip during the weekend evenings, the presence of informal traders after sunset is an anomaly.

Considering that, as traders rightfully pointed out, their patronage lives outside the CBD but commutes into the city centre to work, the anomaly is sensible.

The number of people coming into the city for work or education, according to the Low Carbon Central City Strategy Report, is indicated by an average of  151 403 people that "take trips each day to a destination somewhere in the CBD area". Thus, it may not be feasible for traders to sell outside of working hours.

This raises the issue of the much desired idea of a 24/7 Cape Town with a night-time economy, an idea that events like First Thursdays flirt with.

A night-time economy shows itself to be a complex construct, which is linked to other infrastructural challenges like after-hour's public transport and affordable housing opportunities in the CBD, challenges which impede the ability for people to participate after hours in the CBD, either economically or socially.

Takeaways from Bangkok

Much can be learnt from the recent views of BMA towards its street entrepreneurs, the informal traders of Bangkok. Primarily, clear policy should create an enabling environment, with management being consistent with this approach.

To move towards developing informal trade in similar ways, Cape Town should strengthen the link between its recent inclusive informal trade policy and the management trade on the streets.

Regardless of whether informal traders sell after hours or not, Cape Town is still en route to being a city that vitalises informal activity.