IMF, ILO to prioritise inclusive informal economy growth

The International Monetary Fund and the International Labour Congress have jointly called for efforts to combat discrimination that surrounds informal workers and the informal economy and other issues affecting informal workers globally, adding that it is important to seek ways to tackle and prioritise inclusive growth for informal workers

This was stated on Friday at the launch of an IMF book – The Global Informal Workforce: Priorities for Inclusive Growth.

The Managing Director, IMF, Kristalina Georgieva, said people should stop treating the informal sector like a bogeyman of the economy.

Georgieva said, “Let me say three things that are important. One, we should not make the informal economy the bogeyman of the economy; we should not be negative about it because it is a safety net for so many people.

“They are there in their vast majority not by choice but because they cannot enter the formal economy. We do want to see people move from informality to formality because being in full formality is better for workers.

“They get better pay, they get better social protection and as we know, it is mostly vulnerable people that are in the informal economy.

“It affects 60 per cent of people in employment. Sixty per cent of the adult labour workforce are in the informal economy, talking about close to two billion workers. “Prioritising inclusive growth matter to so many so much. Informal economy is the space of activities that gives value but are not registered either because it has not entered the formal economy or because the formal economy fights some of its activities and some of its workers so there is a big space where informality exists.”

She added, “It is good for the health of the economy as a whole when there is more formality. There is more productivity and the country is likely to reach its full potential; there is more taxes in the government.

“We do have policies in place that can help us move from informal to formal economy.”

On his part, the Director General, ILO, Guy Ryder, said, “I do agree that we should not regard the informal economy and the people engaged in making a livelihood in the informal economy which is a majority of the world’s populations as being the bad people in this film.

“They are in a sense, victims as the informal economy is associated with substandard forms of work, with poverty situations with companies which necessarily remain at low levels of productivity.

“How can we imagine inclusive growth when over 610 people and eight out of 10 of the global world’s enterprises are in the informal economy? It doesn’t work that way.

“Now, because the informal economy is so varied, it’s very heterogeneous in the urban setting, in the overwhelmingly street vendors, in the rural economy of the developing world, but also can be found in the developing economies as well.”

He said educational skills were fundamentally important, adding that educational attainment in the informal sector was much lower than in the formal economy.

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