Street Sellers Vital to Ending Poverty: Surakarta, East Java

By Barrie | April 7th, 2007 | No Comments

For Central Java’s Surakarta municipal administration, the job of stopping the number of poor from growing is hard enough, let alone trying to reduce poverty in the area. Twenty percent of the city’s population of 550,000 live in poverty, and tackling the problem is more complex than just dealing with offshoots such as crime.

“It is difficult to urge people to peace and social order when their stomachs are empty,” Surakarta Mayor Joko Widodo told Blontank Poer.

Joko believes sidewalk vendors and workers in the informal sector hold the key to reducing the number of poor in the area.

“People in the informal sector are the ones who serve the needs of businesspeople and newcomers daily,” said Joko, who is in the second year of his term.

According to data from the Surakarta Sidewalk Vendors Management Agency, at least 30,000 people — 25 percent of the city’s poor — rely on 5,817 sidewalk stalls for their livelihood.

Joko said dealing with problems facing sidewalk vendors could minimize the potential for social and political tension and reduce the crime rate. He said people working in the sector were at a high risk of being swept up in social unrest, such as the May 1998 riots in which people from the informal sector and the urban poor were heavily involved in violence and looting.

“As such, organizing sidewalk vendors can minimize crime and at the same time push down the poverty rate. Surakartans can also be freed from (the city’s) negative stigma of violence,” he said.

Poverty alleviation is the main stated aim of Joko’s administration. During his first year in office he relocated 1,081 vendors from Taman Monumen 45 in Banjarsari to a new location at the Klithikan Notoharjo Market in the Semanggi district.

The local administration earmarked at least Rp 9.6 billion (US$1.06 million) to build 1,200 permanent kiosks for 1,018 vendors to use for free. The administration even provided free transportation to move vendors’ belongings to the new location.

“We have also been provided with services for things such as business license applications and low interest rate loans for start-up capital,” said a vendor and manager of the sidewalk vendors’ cooperative, Muhammad Latief Sierad.

Vendors were provided with start-up loans totaling Rp 200 million from the Surakarta city administration, on top of Rp 5 billion in business operation funds from the State Ministry of Cooperatives and Small and Medium Enterprises.

“The ministry has assured us the funds would be disbursed,” said Joko.

The local administration will also earmark at least Rp 3 billion for other sidewalk vendors to build new shelters throughout the city, as well as 750 mobile kiosks and thousands of tents, all provided for free.

“The city would look neat by organizing them that way, and people would not feel uncomfortable when buying things and eating out in the stalls,” Sidewalk Vendors Management Agency head Bambang Santoso Siyono said.

One vendor, Kusumo, 28, said, “When we were still in Banjarsari, we always avoided the fee collector. Here, we feel more at peace because its assured that we can do business”.

As a stall keeper, Kusomo said he could earn Rp 20,000 per day, with extra commissions on top for each transaction. “I sometimes act as a middleman here to supplement my income,” said the father of two.

The daily turnover for vendors in Klithikan Market varies, ranging from between Rp 500,000 to tens of millions of rupiah. Many food and drink sellers have also moved into the area. Even though they earn less than the stall vendors, the work allows them to support their families.

Despite the program being deemed costly by some, Mayor Joko said it could be worthwhile for the administration. By collecting daily fees of between Rp 600 to Rp 2,000 from each vendor, the administration could earn up to Rp 150 million annually, he said.

“The government will still own the assets, such as land and buildings, while the trickle-down effect would be enormous and could raise people’s welfare. The government would also not be busy paying the high social cost (of poverty),” Joko argued.

In 1999, a year after the economic crisis hit the country, Surakartan’s average yearly income was only Rp 4,084,713. It rose to Rp 7,354,989 in 2003, and reached Rp 9 million in 2006.

“We’re positive people’s per capita income will continue to rise over the years,” Joko said.