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«Contesting the streets Volume 18, number 1 • 2016 U.S. Department of Housing and Urban Development | Office of Policy Development and Research ...»

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Purman, a Banjarsari Park vendor who abandoned the Pasar Notoharjo relocation site for a nearby parking area, said, “I got a second floor stall, which was suitable for garments but not suitable for me as a secondhand goods vendor. All secondhand goods should be located on the first floor because it is hard to bring heavier goods up the stairs.” Given the limited amount of stall space on the street level or close to the entrance, relative to other parts of the market, such insights indicate a need for strategic spatial planning and management within the market spaces to support various businesses. Jogyakarta’s Pasar Pakuncen, on the other hand, has good spatial distribution and grouping of goods within the market, which helps orient customers; auto parts are positioned on the ground floor, and mobile phones and electronics are on the second floor.

In other cases, vendors complained about the dimensions of the assigned stalls. Among vendors who had abandoned Pasar Pakuncen, some faulted newcomer vendors for progressively upgrading their stalls to improve storage capacity, display areas, and lighting as to claim unfair competitive advantages and change the nature of the market. Many of the relocated street vendors wanted to maintain smaller, more communal stall areas, which favored small-scale merchants, as opposed to larger stalls, which favored larger, better-performing businesses. This finding indicates the importance of designing markets and sales spaces to suit the actual profiles and needs of the relocated vendors to prevent gentrification and displacement.

Another key dilemma noted by vendors who left the markets for the streets was the inability to wait for purpose-built markets to gain public recognition and patronage, given their immediate economic insecurity and need to seek income from one day to the next. In the cases of Jogyakarta’s Pakuncen and Solo’s Notoharjo, many of the relocated vendors sold their certificates of perpetual stall ownership within the first year of operation. In so doing, other merchants (many of whom were quite successful and not poor) captured the positive externalities of the markets’ eventual popularity. The street, in turn, offered traders flexibility to change locations depending on customer location and present competition. Eko, a former Pakuncen trader, said, “We prefer to stay mobile so that we can find a place to sell our goods, a place that is at our level. In the market, we are stuck in one place and the level can rise around us.” Thus, for many previously informal vendors, their economic insecurity and resultant inability to absorb the investment costs of being in a fixed location pushes many of them to revert to the more flexible, short-term approach of roaming to capture opportunities throughout the city.

Cityscape 79Taylor and Song

In offering policy and planning recommendations, a number of interviewees underscored the importance of following up the market siting with effective site plans and designs, including infrastructural elements and other accoutrements, such as bridges, signage, and parking spaces, that facilitate public access. As our comparisons show, such approaches and trajectories appeared more likely where vendor relocation and site planning processes prioritized dialogue, negotiation, and a commitment to finding mutual benefits for street vendors and the city. For example, in the Pasar Notoharjo relocation of 2007, Mayor Jokowi heard the vendors’ concerns about the site’s remoteness from the rest of the city. As a result, his administration extended new bus routes, completed street surfacing, and undertook a promotional campaign to integrate the area with its surroundings and change its reputation. Beyond the construction of the market building, the urban infrastructure improvements and promotional work boosted awareness of the new site, which became popular even beyond the city as a center for auto parts and secondhand goods. The result not only pacified the vendors and instilled their confidence in the move but also enabled a greater number to thrive in the new locations and stay off the streets.

Relocation Processes Failed To Prepare Vendors for the Competitiveness of the “Free” Market The government issuance of certificates of stall tenure has enabled vendors to access credit from banks and increase their stock, invest in progressive upgrades, and, in some cases, operate different stalls. In the best cases, the savvier business vendors have found niche markets and maintained relationships with long-time clients while attracting new ones to expand their revenues and incomes. Local governments often tout such scenarios as evidence that relocation can support one of their desired effects, which for Solo’s Mayor Jokowi was to improve the ekonomi masyrakat, or the economic conditions of the poor.

Several interviewees also spoke to the challenge of remaining in their new locations in the face of growing competition, however, especially from vendors possessing more business experience, greater financial resources, and unfair locational advantages and also from those vendors skirting regulations. In Jogyakarta, Mayor Zudianto designated a single marketplace for secondhand goods in a demonstration of firmness (tegas) and a pro-poor policy. As policy enforcement lapsed under the new mayor, however, three other public markets transitioned into secondhand markets, undermining the position of the Pasar Pakuncen vendors, who nonetheless grew in number to include purveyors of new items. Pak Sutrisno, a former Pakuncen trader, said— Pak Herry was strict. The new vendors and products had specific places where they belonged.





Now there is less interest in protecting the interest of the poor. Before, there were more antiques, more cheaper goods. Now the market is very busy with new things, new goods, but not with old goods. Now there are different products and new customers.

Rizal, another Pakuncen trader, also remarked on processes of market oversaturation and resulting competition.

The concept of the relocation is good, but then as it grows, new traders come, it is then not suitable for secondhand goods traders anymore. We could not compete with non-secondhand goods traders, especially when they sell similar types of goods. We cannot operate in the same location.

–  –  –

For some vendors, lacking finance know-how and business experience and skills (for example, accounting, marketing, inventory management) further stymied potential benefits of having a certificate and a fixed location in the market. Lia, a Pasar Pakuncen vendor, said— Those who abandoned Pasar Pakuncen mostly had bad financial management skills. By using their certificates, they accessed bank loans that were too big and then couldn’t manage the money—they became trapped in debt. Some of them already had a huge amount of debt before they’d been relocated.

Rizal, a trader from Solo’s Panggungrejo market, said, “Many traders have low education levels.

Most of us are afraid to borrow money from the bank. We don’t really have a clear understanding of how it works and feel insecure about the risk.” Thus, low levels of education can put vendors in a situation of financial stress because they lack information and wherewithal.

Aside from the fear of predatory lending (given its prevalence in poor communities), lack of familiarity and access to more formal banking systems along with financial literacy to access loans on favorable terms, even from formal banking institutions, additionally increased the economic vulnerability of vendors. Many commented on feeling trapped in their new positions because competitive concerns led them to obtain loans to enlarge their stock. These loans created significant exposure, because these vendors had little experience in managing business debt. The vendor Purman of Solo’s Pasar Notoharjo said, “Immediately after I got the stall from the government, I borrowed money from the bank [with stall as collateral] just to add commodities, but, after a year I didn’t have enough revenue, so I abandoned the stall and went back to the street and the bank seized it.” Despite possession of a formal certificate and access to bank loans, vendors risk losing everything—including their stall and right to occupy the market—in the absence of other collateral in the failure of loan repayment. While street vending allows flexibility of movement and experimentation with strategic locations enabling better access to customers during difficult times, being tied to single locations preclude such opportunities.

Other respondents accentuated how moving to a new facility with a certificate to operate a stall can unwittingly exacerbate the economic and social vulnerability of the poorest vendors. Some have experienced unexpected hardship, such as a medical condition, forcing them to sell their certificate to access financial resources. Bagus, a vendor from Pasar Pakuncen, was keen on operating a stall and thrilled to receive a certificate, but he was forced to sell it soon after to pay for his fatherin-law’s surgery following a motorcycle accident. Others referred to similar family emergencies;

problems with gambling, alcohol, or irresponsible financial management; and other unexpected or unavoidable shocks as triggering sudden liquidation of assets. The trader Sutrisno and his wife, also from Pakuncen, spoke more generally: “How could poor traders like us resist such temptation of instant money from other traders? We finally sold our stall for big money.” As a counter example, Jakarta’s Pasar Tanah Abang Blok G relocation included regulations stating that the vendors do not possess ownership of stalls but only the right to occupy them (which they cannot transfer or sell), which protected poor vendors from the seduction of selling. For those not using their allocated stall in 3 months, the government reserved the right to grant it to someone else.

Thus, market mechanisms intended to advance the economic prospects of vendors often unwittingly perpetuate inequality, as better resourced and more able vendors leverage available

–  –  –

opportunities to get further ahead while the poorest vendors get overwhelmed by the competition, shoulder added economic risks and burdens, and ultimately return to the streets. In simple terms, the free market engenders creaming and inequality, thus exacerbating the conditions causing urban informality in the first place. Among potential policy and planning interventions that interviewees discussed, several vendors accentuated the importance of government oversight, whether in regulating new street vending following relocations, illegal business practices and unfair competition within the markets, or the selling of stall ownership certificates, the latter being critical to tempering gentrification and displacement within the markets. Beyond seeking protection from fierce and uneven competition, many interviewees also underscored the importance of adapting to and finding niches within the market. Antok, head of the Pasar Pakuncen traders association, summarized this issue: “There are some reasons people fail or succeed here: level of tenacity, type of commodity, amount of capital, extent of knowledge based on experience and education, and social links or networks.” A fellow Pakuncen vendor, Dul, added, “To win competition, first we should become distinct in the quality of our commodities, service delivery, and price because the competitors are not just those in this site but also the many new street vendors who have not been relocated.” Again, local NGOs, financial institutions, trade or professional associations, and CBOs may play a role in delivering technical assistance along these lines, given they fill the jurisdictions and usual functions of government. Finally, where financial credit access is both a great resource and a liability, interviewed vendors suggested a mediating role for civil society organizations. Nur Rochmad from Solo’s Pasar Notoharjo said, “A cooperative offering soft loans can be really helpful for vendors to access capital and make new investments.” Long-Term Relocation Planning and Management Failed To Consider the Emerging Needs of Vendors Our findings indicate that government commitment to vendor outreach, inclusive and continued negotiation, and participatory planning is instrumental to successful vendor relocation from street to market and also to sustaining results beyond the transition phase. In the relocation of street vendors from Solo’s Banjarsari Park to Pasar Notoharjo in 2007, Mayor Jokowi’s deep engagement of vendors through dinner invitations, site visits, and participatory planning processes involving the vendors, their associations, and intermediary NGOs and CBOs was critical to building trust, obtaining mutual concessions, and producing a satisfactory outcome. The second phase of the project in 2012, which lacked such participatory and communicative components, failed, however, because of inadequate support. Likewise, in Jogyakarta, the Pakuncen administration supported newly relocated vendors with lunch money in the initial phase when the market was growing in reputation and popularity and undertook renovations when there was a fire, the result being that vendors remained on site during difficult periods.

Street-to-market transfers have been less successful in cases of inconsistent maintenance and enforcement following relocation. When former sites of relocation are inadequately monitored, the streets often become reoccupied and reclaimed, in turn spurring jealousy and weakening resolve among relocated vendors, not to mention distrust toward city officials. In Jakarta’s Tanah Abang, the relocation of some vendors to Blok G was followed by the reoccupation of vacated spaces by other vendors without regulatory consequence, and in Solo’s Pasar Panggungrejo, the government 82 Contesting the Streets Return to the Streets relocated one group of traders while allowing others to remain in the streets; in both cases, the result was increased tension among vendor groups and diminished faith in government capacity.



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