Peru-Urban Informal Sector

In 1990 the vast "informal sector" (see Glossary) of Lima's economy was the most striking feature of its commercial life. There, 91,000 street vendors, 54 percent of them women, sold food in the streets or public squares of central Lima or the residential area of Miraflores, the upscale mecca of the city. Street vendors have been a part of Lima life and culture since early colonial times, and the city government has persistently attempted to remove them to fixed market places. Nevertheless, street commerce in Lima throughout the colonial period and until the twentieth century was generally regarded as a colorful, folkloric aspect of urban life and was often depicted in period paintings and descriptions. Since the great migrations began in the early 1950s, however, the city elites have come to disdain the street vendors who swarm over the Rímac Bridge every afternoon. As Hernando de Soto has abundantly documented in El otro sendero (The Other Path), this freewheeling entrepreneurial sector of the labor force was, in the 1980s, producing the equivalent of almost 40 percent of the national income. As "unregistered" business, this activity is outside the control of the national economic institutions, whose cumbersome and often corrupt bureaucratic regulations stifle initiatives, especially if one lacks resources to pay all the bribes and formal start-up costs. In the circumstances of 1991, the public need to participate in the economy had, in essence, neutralized and bypassed the official system (see Nonparty Organizations , ch. 4).

Data as of September 1992