Economic and social vulnerabilities have exacerbated the effects of the pandemic.
Heightened impacts on the margins of society
The ongoing coronavirus pandemic has had an impact on the lives of almost very person on the planet. While it has dominated global headlines for months, there are inevitably some regions and groups of people who have received little attention. Unsurprisingly, these have tended to be some of the more marginalised and vulnerable members of society.
Hosted by Dr Florence Nisabwe, the Fondation-LAB webinar on Friday 29 May 2020 brought together (virtually) experts from around the world, who shared their personal experiences of lockdown. Each of the invited guest speakers then gave their insights on how the coronavirus pandemic has affected women engaged in informal cross-border trading (ICBT).
The speakers addressed issues including the economic and social effects of the pandemic and measures taken to limit it, and made connections to other important social issues such as gender-based violence (GBV).
While much of the impact of COVID-19 has been negative, some positives are already emerging, such as an increase in gender equality with many more people working from home and sharing domestic responsibilities.
The webinar speakers discussed the following five questions:
• What is the current status of female informal traders?
• How will COVID-19 hamper the achievement of the SDGs for women?
• What can be done to mitigate the impact of COVID-19?
• What should government and civil society be doing, including public education and awareness, community-based measures and enabling personal protective measures?
• What lessons can be learnt from other countries?
Ms Leisa N Perch (Barbados) “A challenge and an opportunity
Leisa began her contribution by pointing out that the current scenario likely has several more months to run, and that there are still many lessons to be learnt.
She identified the immediate effects of the pandemic as being the implementation of measures of containment of varying degrees of severity. This has had an impact on the informal sector of the economy, but could also represent an opportunity.
This is because of the inherent strengths of the informal sector, namely its flexibility, the degree of autonomy and control that informal traders have, their proactivity, and the fact that they can be more agile than people working within more ossified formal structures.
Where informal traders have been living under lockdown, they have seen a very real reduction in their income due to their own decreased mobility (loss of access to markets and business inputs) and that of their customers, who have also experienced reduced income. It is unlikely that many informal traders will be able to implement delivery services for their customers.
As lockdown measures are lifted in many countries, informal traders face a new challenge: inspiring confidence amongst their customers by increasing hygiene measures in their production, preparation and engagement processes. There is a need for creativity in finding solutions (such as) – something that the informal sector excels at. An example could be taking orders by phone, but while the informal sector remains as innovative as ever, many female ICBT traders have been left without the necessary support.
The negative impacts of the coronavirus are of course not just felt by informal traders themselves, but by the dependents and communities they support. To mitigate these effects, they require assistance ranging from income smoothing measures to advice on and supplies of PPE, plus support on minimising health risks during engagements with customers and suppliers.
Knowledge sharing could be achieved through targeted local media (including radio broadcasts in relevant languages), while informal traders will appreciate being given credit for their willingness to continue providing a service to their communities.
Governments and regional authorities have a role to play in providing support in the form of direct finance and social protection. They should also be enabling and educating traders to try and boost their financial resilience in the form of savings.
In the context of ICBT, perhaps the most profound impact of COVID-19 has been to expose the livelihood vulnerabilities of women informal traders. In addition, the collective experience of the pandemic is already causing a re-engineering of how we see people, and who should be counted as “essential” in terms of what they provide.
There is a clear need for nascent social solidarity building efforts in economic systems to be accelerated and reinforced, as has been tried in Brazil.
Informal traders can also benefit from increased networking, which will allow ideas and innovations to spread more widely and rapidly. By sharing information, resources and stories, informal traders can inspire, aid and motivate each other.
Lastly, but crucially, Leisa underscored that at a public level, we must also learn from our collective coronavirus experience in terms of the fragility and vulnerability of informal enterprises and put measures in place to promote social protection. These can help many members of society – including informal traders – to cope with the economic and social shock and impact.
Dr Siham El Kafafi (New Zealand) – “Unforeseen impacts”
Dr El Kafafi touched on the dilemma that all countries have faced – namely how to balance effective lockdown measures with the inevitable economic impact.
She also alluded to the phenomenon of lockdown measures exposing vulnerabilities, as many people have seen their incomes drop and have had to live in less favourable conditions. Lockdown has caused social and economic stresses in many communities, and effectively denied many people from accessing the support and medical help they require.
Further unforeseen impacts have included loss of existing education opportunities for children, and what many experts fear will be a rise in gender-based violence with victims unable to flee their abusers.
At the same time, Dr Siham also posited that the coronavirus could – in some instances – be a ‘blessing in disguise’. Positives that could emerge from the lockdown experience include gender role normalisation with enforced working from or remaining at home involving greater equality in childcare and domestic duty sharing.
Additional positive effects to emerge from this unprecedented period could include enhanced learning opportunities; a revision of the balance between individualism and collectivism – with a greater increase in community spirit due to everyone enduring the same circumstances; the removal of barriers; an increase in the use of technology (to replace in-person contact); and a corresponding increase in integrity and transparency in business dealings.
Naturally, the capacity of individual women ICBT entrepreneurs to benefit from these potential upsides of the pandemic will depend on their pre-lockdown degree of resilience, their savings, and their access to technology and support and idea-sharing networks.
Professor Saras Jagwanth (UN DESA Headquarters, New York, USA) – “COVID-19 and the SDGs”
Professor Jagwanth focused on the impact of COVID-19 and the likelihood of SDG targets being met – in particular those targets relating to reduced poverty and increased access to healthcare.
She identified women engaged in ICBT as typically being lower wage earners and lacking safeguards. They are therefore at risk of falling into extreme poverty in the event of any disruption to their businesses or income streams – exactly what has happened in the second quarter of 2020.
This is exacerbated by the health risks they face due to working and living in crowded places, and having limited or no access to clean water and sanitation. This makes it virtually impossible for people in these circumstances to follow advice on anti-COVID-19 hygiene measures, and social distancing.
While the SDGs are based on the principle of ‘leaving no-one behind’, the consequences of the global coronavirus pandemic could be precisely that: many more people and communities falling through the SDG safety nets.
Informal traders are at a distinct disadvantage when it comes to accessing emergency financial relief, as this tends to be targeted only at established MSMEs. Without established channels, it can be extremely hard to get benefits to informal workers in need.
Informal traders also have less access to information, which places them more at risk from public health issues, and puts them at a further disadvantage when it comes to learning about relief that may be available.
Strategies that involve enhanced collaboration between national and regional governments, the private sector and informal trader organisations are needed to redress the balance by facilitating training opportunities for informal traders.
Discussion: to formalise or not to formalise?
One of the most interesting discussions within the webinar was around the benefits of transitioning informal traders to a more formal status. It has been argued that the sheer scale of the informal sector within emerging economies is an obstacle to achieving the SDG goals.
The COVID-19 crisis requires a response that is aligned with achieving the SDGs, including being conducive to the growth of enterprises (Goal 8: Decent work and economic growth; Target 8.3: Promote policies to support job creation and growing enterprises).
The webinar concluded with a fascinating discussion on the possible benefits of formalising the informal sector to make these micro-enterprises more sustainable in the longer term, and to create better support mechanisms for them.
While it can been seen that there may be benefits to increased formalisation – in the sense that it can bring informal traders within support structures and make them easier to reach – concerns were also expressed that formalisation would stifle innovation – one of the key USPs of the informal sector.
Dr Nisabwe concluded the webinar by thanking the distinguished speakers. She also reiterated the importance of continuing this dialogue with a view to urgently identifying and supporting women engaged in informal cross border trade both during the COVID-19 crisis and into the future.