Protection or taxation? New laws for street vendors

Protection or taxation? New laws for street vendors

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Sat, 04/09/2010 - 11:17

On a crowded sidewalk near al-Ataba Square in central Cairo a junior police officer seizes a teenager selling watches--cheap digitals and imitations. The white uniformed officer opens the street vendor's wooden box and casually browses through the merchandise. He tries on a few watches and then settles on one that apparently looks agreeable on his wrist. Without paying he tells the vendor, “Go on, get out of here.”

This is an everyday occurrence according to Cairo's street vendors, countless numbers of whom report that their merchandise is regularly confiscated by municipal police officers, amongst other forms of harassment. Statistics issued by the Ministry of Trade indicate that there are approximately five million street vendors nationwide--out of a total workforce of some 24 million, this translates into more than a fifth of all those working.

An untold number of vendors peddle their food in street carts, while others display their merchandise--ranging from cell-phone accessories to underwear and toys to cigarettes--on canvas spreads, wooden display boards, and suitcases. They typically line up along congested sidewalks in commercial districts, by bus stations and outside mosques, shouting to alert passers-by to their special offers.

An initiative by General Union of Commerce Workers was announced on May 2010 in an attempt to organize and unionize street vendors nationwide. The General Union, in coordination with the Ministry of Trade, is said to be currently drafting a law to protect street vendors via the establishment of local trade union committees, and the provision of social insurance plans.

Mohamed Wahballah, a member of the ruling National Democratic Party and President of the General Union of Commerce Workers, told Al-Masry Al-Youm that seven street vendors' unions have already been established - in Ismailiya, Sixth of October City, Luxor, Banha, and Cairo. According to Wahballah, “In the past four months around 10,000 street vendors have joined our union, and we hope to incorporate a good many more.”

“If we keep growing at this rate we will soon be the biggest general union in the Egyptian Trade Union Federation.” The state-controlled ETUF, Egypt's sole trade union confederation currently has an aggregate membership of approximately 4.5 million workers--most of who are employed in the public sector.

“Our goals are both to protect street vendors from the difficulties which they face, and to safeguard consumers. This system of unionization is decentralized, in that every local union committee will be responsible for the rights of its constituents.” Wahballah explained that each union committee will work with local authorities to determine the locations where vendors may work. “Each unionized street vendor will thus be licensed and accountable. In this way they will not be confronted with any problems from the police or authorities.

In order to encourage street vendors to establish and join these trade union committees the General Union for Commerce Workers has stipulated that the first year of membership will be free of charge. Street vendors will be exempt from paying their union dues, a modest LE1.80 per month--which are channeled to their respective local union committees, the General Union of Commerce Workers and the ETUF.

Wahballah added, “When this new law comes into effect it will act as a comprehensive system protecting not only street vendors, but also consumers--in that it will cut down on counterfeit products and will guarantee hygienic standards in food production.” The draft law was originally expected by the end of August, but it is still being drafted and according to Wahballah, “It will be submitted for review when parliament next convenes.”

Street vendor Mohsen Amer (not his real name), who sells Chinese watches out of a large wooden box near Opera Square in Downtown Cairo, says “I haven't heard of this draft law, but I think they're just after more taxes from us.” He added, “They want to tax us officially, although they already tax us unofficially through the confiscation of our merchandise. We also pay taxes in the form of bribes to police officers in attempts to retrieve the confiscated goods.”

Other street vendors agreed with Amer--viewing the draft law as a government ploy to collect taxes. In response to these claims Wahballah said, “The draft law initiative came from the General Union of Commerce Workers, not the government. Neither the general union nor the government is after taxes from these street vendors, this is not the aim of the law.”

Hassanein Keshk, an independent economist and analyst at the state-funded National Center for Social and Criminological Research, told Al-Masry Al-Youm “I don't believe that the government, or unions which are dominated by the government, are interested in the rights of street vendors as much as they are interested in regulating them, and in collecting taxes from them.” According to Keshk the authorities may also be concerned with controlling the goods available for trade, weeding-out pirate products, clearing-up sidewalks, and confronting drug dealing, crime and street violence.

Keshk went on to say “I believe that the government primarily wants to tap into the hundreds of millions of pounds that are generated annually by the informal sector, in order to acquire a larger portion of their pie.” Keshk claims that the actual portion of the workforce employed - directly or indirectly - in the informal sector (not just street vendors) may be as much as 30 to 40 percent. “It is extremely difficult to estimate the number of employees working in so-called 'stairwell industries', in domestic labor, seasonal agricultural or construction labor, or as green grocers, unlicensed traders, informal transport workers, etc.”

Selling socks displayed on a wooden board near Opera Square, Awad Morsi (not his real name,) said, “On average the municipal police come round three or four times a day. We run and hide, because not only do they confiscate our merchandise they also frequently arrest us. Police officers may charge us with commercial fraud, obstructing traffic, trading in stolen goods, etc. Often they also try to frame us or use trumped-up charges against us, especially drug dealing. In order to get you to confess officers often use beatings, torture, insults and other forms of degrading treatment.”

In Ramses Square a street vendor selling shoes (name withheld) said, “We're not interested in these laws. We don't want the government's unions, or it's insurance plans or pensions.  We don’t want anything at all from the government. We just want them to leave us alone, so that we can make a living and feed our children.”

Street vendors' names have been altered to protect their identities.