Recovery “kick off”? Of football, sausages and lost opportunities

Blog by
11 March 2010

When it’s done, the global tally could be 50 million. So says the International Labour Organization (ILO) about job losses from this recession.

In richer countries, that has meant growing pressure on central government resources, as formal jobs have been lost and draws on government benefits have increased. Estimates include 8 million jobs lost in the US and 1.3 million in the UK.

In developing countries, people are more likely to juggle several jobs than in the developed world. This means underemployment

– where people cannot find as much work as they would like, but still have some form of employment. The term is more accurate than unemployment as a description of what happens in poorer countries during slumps.

Elusive estimates

Estimates of underemployment are hard to pin down, particularly because most of the people it describes eke out a living in the informal sector — that sector of the economy that is neither taxed nor monitored by government.

Though it is often associated with illegality and contraband, the informal economy is mostly law-abiding, locally focused and communally-regulated. Indeed, a proportion of all economic systems globally is informal.

Though data is lacking, estimates from the ILO and Organisation for Economic Co-operation and Development (OECD) show that globally in 2009, there were over 200 million more informal sector workers owing to the recession.

In South Africa, for example, the recession is estimated to have cost more than 900,000 jobs and the informal economy is still the respite of most South Africans seeking work.

However, with the June 2010 football World Cup looming in South Africa, many service and hospitality industries are dreaming of a windfall. Supporters will be venturing out of their recession-proofed homes to enjoy the sporting atmosphere in company with other fans in pubs, hotels and hostelries across the country.

And that could just be the open door many of the underemployed have been waiting for.

Tantalising opportunity

Could football be a recession-buster? And surely a massive post-recession boost for South Africa? Could the informal economy cash in on the World Cup?

Football is inextricably tied to snacking, for instance. So serving hot dogs or the South African sausage dish boerewors and other delicacies at the roadside and other convenient places could net substantial profits. High-quality, safe food, in high demand by locals and tourists alike. A win-win, surely?

And the International Monetary Fund agree: on Wednesday IMF chief Dominique Strauss-Kahn urged greater competition in the food sector in South Africa as a vital element of post-recession growth and stability.

Unfortunately, the South African authorities disagree. It’s a stance that may well prevent millions of South Africa’s informal traders, and the poor millions depending on the success of these traders, from benefiting.

Informal traders are currently being bounced off the streets of Cape Town and Johannesburg as authorities strive to present a clean, uncluttered version of the Rainbow Nation to international tourists. (Ironic that cleanliness is being so heavily promoted, when ticket sales have been marred by criticism of monopolisation and inflated prices).

The authorities appear to have fallen into a classic “offside trap”. They have failed to grasp that one of the joys of travel for football supporters as for everyone else is to meet local people, eat local food and get as far as possible, atmosphere-wise, from their own local bar in Liverpool or Livorno or Libreville.

Driving informal traders away also makes limited sustainable development sense. Money spent on the informal economy goes directly into the pockets of the poorest and most needy in South Africa, eager to try out their entrepreneurial prowess.

And with the recession biting so hard right now, there is a real sense in which tourists, locals and sustainable development have similar needs, not opposing ones.

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