October 3 2022 3:49 AM E-paper Subscribe Sign in My Account Sign out

The shadow economy and thinking out of the box

A man carries a box of items in downtown Amman in this undated photo. (Photo: Ameer Khalifa/Jordan News)
A man carries a box of items in downtown Amman in this undated photo. (Photo: Ameer Khalifa/Jordan News)
Let's start with the painful facts: There are no jobs, with the unemployment rate hovering around 25 percent and hitting the 50 percent mark among youth.اضافة اعلان

Another aspect of the economic reality is that the informal economy, according to a local study released in February last year, constitutes 25 percent of the national income.

And here is the dilemma: The bigger the informal economy grows, the more public revenues shrink. At the same time, and under an economy strained by COVID, people should be given enough freedom to start their micro businesses and the government should find ways to regulate the sector without using a sledgehammer to break a nut.

I am not talking here about the educated middle-class talents in the IT, tech, or freelance translation business working from home for local and overseas customers. This is part of it, but these people work on their screens from the comfort of their homes and do not necessarily support the entire family with the money they make.

I am talking about the likes of Osama Abu Sbeitan, a 21-year-old college student, who helps his family by collecting cardboard boxes from the central vegetables and fruit market, and then sells them for peanuts somewhere else. A recent viral video on social media showed a municipal loader smashing the cart to junk because it was "illegal". I have no intention of being dramatic here, but leaving a young man supporting a family of 11 jobless is a recipe for making a street criminal, or even a terrorist.

We need to help these people go out into the street to buy and sell without harassing them. Of course, the law must be respected, but we need to act in the spirit of the law and give these people a chance to save their dependents from starvation, yet have in a place a long-term plan to fully regulate the market.

The first problem is that when municipalities allow people to have their stalls anywhere, carts roaming in the streets, food trucks … etc., there will be chaos, so prioritization is imperative, coupled with utter transparency so that people will trust that corruption in the form of wasta and favoritism is not at play. The criteria can be simple: Give top priority to households that receive financial aid from the National Aid Fund, which is not sufficient at all, and in particular to families supported by women and persons with disabilities, and to youth who have to pay college tuition.

Do not charge them anything, but grant these small businesspeople a grace period of three years. After that, they are given the choice of coming forward and applying for a permanent license and paying the fees. They will likely do it if business is lucrative; otherwise, they will choose to step out of business voluntarily and give others the chance to try their luck with the limited spots available.

When people are sure that the principles of equal opportunity and transparency are observed, they tend to be more law-abiding and when case inspection campaigns confiscate goods or violators’ carts, municipal authorities will have a solid defense, regardless of the harsh criticism they might see on social media platforms.

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