There is a big department store run by the government in one of the centers of Hanoi. Last year I went there to do some shopping. While I was looking for postcards several children and women came to me trying to sell their own goods, inside the same store. They were just selling things already on sale there. When I finally found the set of Vietnamese postcards I wanted I looked at the price, but decided to buy the same postcards from one of the street children vendors. The child smiled at me and half-joking I started to negociate in front of the stand where the postcards were. As expected the first round was almost double the price. Finally after about three minutes we agreed with the price and after writing it down, I bought the postcards from him. Of course, the child wanted more money, but when I pointed at the stand of the store where the same postcards were on sale. He realized the price was the same and calmed down. The clerks of the department store do not worry about the matter.

This is just one example of the situation in Vietnam these days. There are many others I can mention, like selling envelopes, stationary, etc. at the door of the Central Post Office, and the free exchange of money done by girls in front of the big Banks, and the International Post Office in Hanoi. The examples mentioned provide the image of what is happening in countries like Vietnam now. There is a strong willingness in ordinary people to proceed ahead and to develop at all costs. The public sector is losing ground to privately run enterprises, although due to the communist political one-party system the future perspectives are unclear. The situation of the public department store of Hanoi will certainly change when more modern private stores are built. Street vendors will never be allowed inside. Since a few months ago, they were not allowed to sell their products in the streets, and when the police found them doing their mini-business they fined them.

Dynamics of the Informal Sector in Vietnam

---

Infinitesimal businesses face many difficulties and contradictions in Vietnam now. They have been able to move freely, in spite of the State controlled political system, but new tax policies and a serious lack of capital do not allow them to expand further. There is still much confusion concerning the use of street sides, pavements, and marketplaces, and the many kinds of fees and fines imposed upon small businesses make them very unstable. On the other hand, officials believe that fake products, drug addiction, tax evasion, prostitution, etc. are promoted at the level of the informal sector, and they want to control it.

The informal sector not only absorbs a large proportion of Vietnam's labor force, but it serves millions of Vietnamese. It will remain permanently in Vietnam as an important sector in its economic life and structure. Studies show that each year about one million young persons start looking for jobs, and there is no way for Vietnam at this moment to create so many new jobs. The only solution will be the expansion of the informal sector in urban and rural areas.

In fact thinking of the urban areas, the dynamism and the possibilities open through informal economic activities give much hope to the urban poor. The informal sector works using simple technology, with non-fixed working hours. The place of work might be fixed, but in many instances it is ambulant. It is not systematically organized and the people working are not beneficiary of any social insurance system. Their activities are so flexible that they usually do not need permits of local authorities. Nevertheless tensions arise as a result of new official regulations forbidding the street mini-restaurants, or limiting the access to the center of the cities of tricycle vehicles. This popular transportation in Vietnam generates incomes that are often higher (300,000 VNd/monthly) than the wages of many workers, and many slum dwellers and poor families get their support fromthere.

Lately many isolated studies have been done on the informal sector and the national results are, that about 20%. of the whole active population in Vietnam is related to it. It is possible to estimate that the informal sector has created jobs for about 7 million workers. It is also important to note that it also provides extra jobs and that way offers possibilities of income to many people whose jobs are not enough to let them support their families. This is true about teachers, for instance. In the rural areas, also, millions of farmers are able to gather extra income through sideline occupations. The living conditions of farmers are so hard that in many regions their monthly per capita income is roughly 16,000 VNd ($1.30). This is especially true in mountain areas where people usually live very poorly.

(Ando)

---