At the fringe

The onset of COVID-19 pandemic has laid bare the inequalities present within societies across the globe. The pandemic has affected different groups of people in a varied manner and degree depending on their location in the social hierarchy. The most vulnerable section being the migrant population from rural areas employed in cities on a meagre income. The images of swarms of migrants moving to hometowns barefoot immediately after the announcement of lockdown bring to the forefront the issues and the invisibility of the informal workers intrinsic to the capitalistic glamour.

The informal economy plays a significant role in the development process of low-income countries through the provision of livelihood for the majority of the population. Despite being a lower-middle-income country, an exorbitant 92 per cent of India's workforce is a part of the informal economy. Similarly, China, which is an upper-middle-income country, employs more than 60 per cent of its urban workforce in the informal sector. Street vendors across the globe form a major category of the informal workers and depend on footloose occupations for their livelihood rendering their employment particularly vulnerable to exogenous factors. Due to their footloose nature of operations, they constantly face persecution by authorities, police and civil administration. This attitude of indifference is common across nations. In some countries, long struggles by street vendors have culminated into the recognition of the street vendors' right to livelihood and social support to vendors by governments. However, such social policies, as this essay will highlight, provide a modicum of basic rights to these groups and are distant to the idea of social rights as envisioned by TH Marshall (1949).

Background

The testing times of COVID-19 and its disproportionate impact on these marginalised groups is evident from their low saving capacities and the resulting vulnerabilities. Besides, labelling them as 'superspreaders' of coronavirus has further stigmatised these groups rendering their livelihood precarious. Leaders across the countries have reacted differently to these impacts. This essay discusses how and whether the social policy towards street vendors of the past have changed during the pandemic. At the global level, the pandemic has provoked divergent trends. Like the foreign policy of a country does not exist in a vacuum, similarly, the social policies of the country cannot be isolated from the political economy. Using the case study of India and China, the essay tries to answer whether one type of political system performed systematically better against COVID-19 than the other on the social policy radar. A historical analysis of policies oriented toward street vendors is sought to understand various underlying political dynamics.

Street stall economy

COVID-19 pandemic and draconian measures like lockdown unleashed waves of retrenchment and job losses across countries, particularly in the informal sector. In order to recover an ailing economy, Chinese communist party PM Li Keqiang in June 2020 announced an unusual policy shift towards legitimising street vending. The term 'street-stall economy' was popularised overnight to emphasise the role of street vendors in providing employment opportunities and as a source of affordable goods. Regulators relaxed the controls over street stalls, even showing support for the roadside businesses, in a bid to revive local economies hampered by the COVID-19 pandemic. China's Central Civilisation Committee announced that they will not include street vendors who occupy public places into city assessments for 2020, meaning city planners don't need to get rid of them for a "Civilised City" reason. Relaxed restrictions and setting up street stalls led to the creation of more than 1,00,000 jobs in Chengdu, in Sichuan province of China. This policy of promoting street vending was immediately replicated across more than 27 cities. Most provinces welcomed street vendors; Shanghai even announced a month-long festival promoting street night-life. Some of China's big tech companies also stepped in to support the street vendors. Alibaba offered interest-free loans to vendors, while WeChat provided marketing support, subsidies and advice to the street vendors to facilitate their digital transformation. JD.com launched Spark, which sourced 50 billion yuan of goods for small shops and stalls and provided them with interest-free loans to stock the items.

Street vending in China

However, this has not been the case always. Historically, Street vending persisted in China until the 1950s, when Mao Zedong's anti-capitalist ideologues banned private enterprise. The end of the Cultural Revolution (and of Mao) in the mid-1970s marked the beginning of a street vending renaissance. As China's youth returned from involuntary exile in the countryside, they often opted to sell low-cost goods on streets due to scarcity of capital. Their numbers grew rapidly, especially in the 1990s as the Government shut down unwieldy state-owned companies and laid off millions of workers. The Government at that time was largely indifferent to informal workers and left them unregulated. As a result of various factors, the numbers of street vendors went up. This turned out to be a mixed blessing. The vending trade quickly expanded, but so did the problems associated with it. By the early 2000s, Chinese media were running stories on the use of 'gutter oil' — basically, used cooking oil that's sold (and resold) under unsanitary conditions. The primary market for the product has always been the low-margin small restaurant or food cart. But when there are millions of such businesses, and local governments are disinclined to shut them down or fine them, eradicating such practices is difficult. Similarly, the sale of fake goods soon soared on China's streets. To curb this, many cities established para-police called 'Chengguan', also known as urban management officers to enforce local urban laws and regulations with a focus on street vending. However, when cities did go for crackdowns, it was often via violent means that proved quicker than regulatory fixes but also highlighted ham-handed governance.

In 2017, the Beijing Government enacted evictions of "low-end population" in a massive city clean-up movement, a move to erase street vending in Beijing. The areas where migrant workers lived were cleared in 48 to 72 hours after the order. Conflicts between urban street vendors and city regulators became a common urban sight in Chinese cities. Vendors who mostly came from rural to urban areas to seek a living were not considered to fit in well with the skyscrapers and the shopping malls of the big cities. Vendors without licenses were harassed and driven away by the authorities, often forced to play a hide-and-seek game with community administrations. All barbecue activities across the cities were also banned to prevent and control air pollution. Street vending in China has long been at odds with metropolitan modernity until June 2020, when the Chinese Government started urging street hawkers to set up open-air booths in public spaces even without government-issued licenses. Vendors who were earlier considered as 'eyesores' were now touted as important to "China's livelihood". In China, no related welfare policies of vendors have been made until recently.

Significant shift

This shift depicts the political economy of China, where vendors have become the last hope of the Chinese Government who fears social unrest caused by the dire unemployment situation. Clearly, China has travelled too far into the era of the digital economy, online retail and data-driven e-commerce to embrace the low productivity of street vendors. Placing an ancient economic species at the centre of national-policy — in an economy that is world's second-largest and aims to be the global leader for emerging technologies by 2035 shows that this policy shift is meant to be short-term to create an emotional exuberance on the street. Reviving the street vendor economy is all about jobs as instant job-creation helps lower the risk of mass social instability. This depicts how social policy becomes a tool to absorb small bouts discontentment in the larger capitalistic framework. The state regulates the street vending in ways and at times that benefit its political purposes. Driven by neoliberal principles, such policies locate and relocate noncitizens into new spaces of invisibility as per convenience.

Street vending in India

Compare this with the street vending landscape in India. Very similar to China, street vendors in India too face a continuous threat of eviction. City planners, designers and local authorities often overlook the significance of the natural markets and consider harsh steps, such as removal of vendors inevitably owing to the issues of traffic, congestion, public health and aesthetic landscape. While the Master Plan of Delhi 2001-21 proposed to incorporate informal sector in the planned development, these provisions have not been implemented on the ground. Only after a long drawn legal battle by National Association of Street Vendors of India (NASVI) in active collaboration with Self Employed Women Association (SEWA), 'National Policy on Urban Street Vendors' was enacted in 2004 to protect the livelihood rights of street vendors. Later, in 2014, 'Street Vendors (Protection of Livelihood and Regulation of Street Vending) Act' paved the way for a common law to regulate and control street vending in India (WIEGO, 2015). These policies provided for the formulation of guidelines for hawking and no-hawking zones after conducting a street vendor survey, consisting of all stakeholder groups. However, despite such clear statutory provisions, natural market areas like Daryaganj Sunday Book Bazaar were declared as a no-vending zone prior to a survey, highlighting the absence of hard checks in the law (CCS, 2019). Social welfare policies of both India and China before COVID-19 are replete with such bias towards street vendors and instances of ham-handed governance.

Comparison

In response to COVID-19 crisis, India adopted an 'entrepreneurial approach to social policy', unlike China. To respond to the humanitarian crisis, the NDA-led Government launched a special micro-credit scheme — 'Pradhan Mantri Street Vendors Atma Nirbhar Nidhi' to enable street vendors to re-establish their businesses. The scheme provides a working capital loan of up to Rs 10,000 repayable in monthly instalments in the tenure of one year. All street vendors engaged in vending on or before March 24, 2020, are eligible for the loan. However, unlike China's interest-free loans, the loans in India carry an exorbitant interest rate of 24 per cent (with a 7 per cent interest subsidy on regular repayment on loan). This emphasis that the social policy in the Indian context is largely market-driven. The policy preempts the creation of sectors of dependency while aiming to create enabling conditions for the poor. Moreover, the Government aims to cover 50 lakh street vendors through this scheme and the eligibility criteria of the scheme requires vendors to possess a vending certificate or an ID card issued by the municipal authorities. But according to various newspaper reports, there are only about 18 lakh identified street vendors across the country, of which only 13 lakh have valid identity cards. This policy is an obtuse angle with China's policy which waived off the licence requirement altogether. India's competitive entrepreneurial governance suggests a targeted rather than comprehensive approach to welfare. Such loans do not bring significant de-commodification as they do not emancipate individuals from market dependence.

In fact, considering the disruptions caused by pandemic too, such a scheme may not suffice when vendors have no income and zero savings. Many surveys have found that financial relief in the form of loans is unlikely to work for a majority of vendors. An Informal Economy Monitoring Study (IEMS) of 10-cities of India revealed that the highest source of capital for street vending was found to be own savings amongst many sources of credit available in India, such as wholesalers, money lenders, MFIs, SHGs, banks and cooperatives. Most of the street vendors in the study were found to have no bank account. Hence, money lenders stood as an easy source of capital, with less formalities and easy accessibility. The National Hawker Federation (NHF) also notes that the liquidity support promised to vulnerable vendors is a good step only when the sector is back on its feet. This raises questions on the efficacy of the scheme and whether a direct income transfer, de-linked from existing registration requirements or an interest-free loan like in China to vendors who have been at home for months and need direct support to resume their work would have been more effective measures in such times of distress.

Conclusion

Would a more proactive role in street vending and unbridled approach such as that of China been more effective compared to the half-hearted policies of India? While no one really expects China's street-stall revival to spark a full-blown economic recovery, it does show how such initiatives can help support low-income earners, provide oxygen for entrepreneurs and drive efficiency through the use of new technologies which can help overcome some of the challenges of the past. The answers, however, do not come easy, as policies are deeply embedded in the political context of the nation-states. For an authoritarian nation like China, it is possible to put this genie back into the bottle (regulate street vending) once consumer demand revives, unlike the Indian democracy where such an experiment is not easy considering a consensual polity. This case of India and China reinstates the relevance of political economy in understanding social policy responses of the countries to the COVID-19 crisis.