Business Permits and the Marginalized

It’s Business Permits renewal time again, that wonderful time of the year when tempers flare, blood pressures soar, and panicky people panic; when the system that was supposed to have been set up in the last few days of the last year are hurriedly installed in a desperate effort to start entertaining applicants on the first day of work this year.

In the next twenty days we will hear all sorts of complaints: the staff don’t arrive early enough, the computer system fails every now and then, somebody is earning money on the side, the people who should be in charge are nowhere to be found, etc, etc.  We’ve heard it all before, and we’re likely to hear it again in the future.

 

But what we won’t hear at all are complaints from the marginalized businessmen – the small-time entrepreneurs who are too small to get Business Permits, who don’t bother to apply for one because the process is too complicated for them.

 

We call it the underground economy.  They are merchants without receipts, whose goods managed to slip through customs from who knows where, or are locally produced in household kitchens and shops.  They sell anything from DVDs to cheap electronics to garments and sexy underwear.  You find them in street corners, while some of the more audacious have put up shop just like “legitimate” businesses.  Some of them weave through stopped vehicles before a red light, hawking their ware to drivers and passengers alike.

 

These entrepreneurs make up a huge portion of the local economy.  How much do the DVD/VCD stores in the malls make, compared to what those guys in the sidewalks of Colon and Fuente Osmena earn?  And they are certainly industrious – just watch anybody tending a barbecue stall, and see how much patience and endurance is required to stand before live coal and delicious food – and how much discipline it takes to refrain from eating your own product.

 

Yet they find it hard to be part of the formal economy.  De Sotto says that part of the reason for this is the difficulty in acquiring titles or deeds to whatever assets they might have.  Former President Ernesto Zedillo says that another reason is the difficulty in getting business permits.  Often, the requirements and processes involved in getting business permits, while surmountable by small and medium enterprises, are too much for the sidewalk entrepreneur.  Just try asking a sidewalk vendor for a statement of income certified by a CPA. 

 

We need to start looking at a business permit for the marginalized entrepreneurs.  Ambulant Vendors’ permits are a start, but we need to cast a wider net and simplify requirements for non-ambulant businessmen who may be individually small, but who collectively form a large part of our economy.