Academic journal article Theoretical and Empirical Researches in Urban Management

Vulnerability of Urban Informal Sector: Street Vendors in Yogyakarta, Indonesia

Academic journal article Theoretical and Empirical Researches in Urban Management

Vulnerability of Urban Informal Sector: Street Vendors in Yogyakarta, Indonesia

Article excerpt


Indonesia is one of the countries with large informal activities. According to Blunch et. al. (2001), informal sector in Indonesia absorbs 77.9 percent of non-agricultural employment; meanwhile, in other Asian countries, contribution of this sector to employment ranges between 73.7 percent in India, 67.1 percent (Pakistan), 66.9 percent (Philipines), and 51.4 percent (Thailand). The role of this sector is more important when the economic crisis hit Indonesia since 1997 in which the ability of modern-formal sector to absorb employments decreased. A large number of employees lost their jobs because of numerous downsizing in manufacturing industries and construction sectors. In this situation, informal sector is a solution for unemployment problems. Hence, economic crisis also has reversed formalization of the economy as shown by a decrease in the share of employees in formal sector (Suryahadi et. al., 2003). According to the Indonesian Central Bureau of Statistics, the number of informal employees in 1998-2006 were more than 57 millions or about more than 60 percent of productive work force (Table 1). By definition, informal employees in Indonesia refer to own-account workers, self-employed assisted by family members, and non-wage family workers.

Informal sectors are also an important activity in the daily life of urban people since most of labor force depends on the informal sector as their main source of employment and income. It is not surprisingly that there has also been a significant increase in the number of urban informal activities in almost all cities in Indonesia since the crisis. Based on his survey evidence of an urban village in Jakarta, Tambunan (2004) concluded that no doubt that the informal sector is very important for many urban families, at least as a secondary or a complementary source of income.

One of the important informal activities in urban areas is street vending (pedagang kaki lima). As street-based traders, they use space in the streets that are originally not intended for trading activities and it is also considered illegal This illegality status makes the street vendors face harassment and threat from policy and other government authorities (Suharto, 2003). Suharto showed that municipality government in Bandung often use 'clearance' operations to remove the traders from the busiest areas of the city. Local government in Yogyakarta and Sleman (both are in Yogyakarta Special Region) also tend to adopt relocation policy rather than rearrange the use of public space as expected by the street vendors (Brata, 2006). It indicates that street vendors face vulnerability in their daily activities. However, it should be mentioned that their vulnerability does not only relate to local government policies but also to other aspects.

The purpose of this paper is to estimate empirically the vulnerability of street vendors as an important part of urban informal sector in the case of street vendors in Yogyakarta urban regions that are defined as area of Yogyakarta city and a part of Sleman district in Yogyakarta Special province in Java. According to Wetterberg et. al. (1999), among islands in Indonesia, Java has been the hardest hit by the economic crisis of the year 1997/1998. In this study, a binary-composite index of vulnerability is developed based on an approach that has been used in a study on the street vending community in Delhi, India (Dabir-Alai, 2004). The study found that most of street vendors in Yogyakarta experience vulnerability at the medium level. In general, vulnerability of food seller vendors is higher than other vendors. Vulnerability also varies across the locations of vending.


According to Dercon (2005), the term 'vulnerability' actually has been used in a variety of related but different meanings in several studies that in general related to "a sense of insecurity, of potential harm people must feel wary of--something bad may happen and spell ruin. …

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