Sunday, February 10, 2013

Informal Economy

Although this video focuses on Africa, I'm sure everyone in the group can relate many things we have seen on this trip to what is spoken about in this lecture.

Everyday we are here, especially when we go on our trips, we see many examples of informal economy situations. The informal economy here is what keeps people going. There aren't enough jobs in the area for everyone to have a "real job." Without the lottery venders that wonder around La Virgen and the fruit sellers in traffic jams, many people here would not have any form of income.

The example of the cell phone company in Nigeria is parallel to the cell phone company situation here. The Kolbi cards we buy to make our local phones work are sold in the exact same way as discussed in Nigeria in this video.

What is the problem then? This is illegal in most situations. The government can't collect taxes on these people because their set up is so informal. In places like San Jose it is very dangerous to be an unlicensed street vender because the police are likely to shut you down. But what are the other options?

The informal economy is very important. If the police cracked down in cities like La Virgen the economy would literally shut down. The informal economy is what keeps the money moving in Latin America.

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