Informality is a major problem for emerging economies like Peru. One example is the artisanal fishery sector in Peru, where 70% of activities are informal. This informality leads to negative economic consequences like disorderly extraction of resources and lack of safety regulations. It also makes the true size and benefits of the sector unclear. To address this, the government needs programs to help fishermen formalize, follow environmental and safety protocols, and create trade unions to collectively negotiate working conditions.
1. INFORMALITY: A PROBLEM
IN EMERGING MARKETS
Peru
Abstract
Negative Economic Consequences in emerging markets due to informal economic activities.
For example: Artisanal Fishery in Peru.
2. Coursera:Final Project
ExecutiveSummary:
Introduction:
There are many economic sectors and activity that are promising for the country´s
economic growth. However, there is a lot of informality from the habitants. The eager to
earn more money makes habitants resilient to pay takes or be compliant with regulations.
Informality is a big issue in emerging countries as they play an important role in the labor
market sector. This is a big
problem because it does not give
a clear view of the country´s
economic growth.
The relationship between poverty
and informality it is clearly linked
and it can be seen in emerging
countries. As it can be seen from
the graphic where it states that in
Peru the problem that mostly
affects the Peruvian SME´s is
informality.
To understand the problem that
Peru faces regarding to its
informality approach, we will
take an example:
3. Coursera:Final Project
ArtisanalFisheryas an economic
activity.
Artisanal Fishery is an economic activity that has been seen as one of the most potential
sources of development for Peru. This entrepreneurial economic activity is being
developed in ten regions of the Peruvian coast. There is a high increase in this activity,
many towns have started to set up an artisanal fishery craft as a way of enhancing their
way of life.
Facts:
According to the last Artisanal Fishery Census, there are 12 thousand crafts in the coast
of Peru, Tumbes, Piura, Lambayeque, La Libertad and Ancash where approximately 50%
of them are artisanal fishers. Furthermore, in the last 17 years this activity has increase in
35% in those cities mentioned above. However, according to the Peruvian Ministry of
Production, 70 % of its activities area are considered informal.
Effects:
The Artisanal Fishery informality causes
disorder and damage to a country´s natural
resources. It increases the volume of
indiscriminate extraction of aquatic
resources. Fishers do not recognize the
importance of incubation dates and when it
is best to wait and not interfere with the fish
reproduction cycle.
4. Coursera:Final Project
Safety regulations
Fishers do not consider some aspects that are important for their wellbeing and the success
of their business. In other words, they do not consider essential to follow some protocols
that are only seen expenses. Unfortunately, when an accident happens it could be
devastating as it can incur in financial and human lost.
Unclear economic view:
Due to informality, the government cannot access easily to objective data and numbers,
that could help to have a clear view of the economic activity, its benefits, obstacles and
how to improve it.
Solutions:
Government should be seeking to reduce informality and develop this economic activity.
Inclusiveness
An effective solution could be
the creation of programs that
allow fishers to formalize their
activities and informs fishers
the impact that this could cause
on the environment when they
fish in the wrong seasons.
Another program should aim to
give information and
motivational courses so fishers
with few economic resources can be entrepreneurs, formal and active in the Peruvian
economy.
Public policies and Formalization
There should be more regulations and the
creation of a strict protocol to follow
during fishing periods. Assist fishers to
formalize their activities and register
their fishing craft.
Trade Unions & Syndicates
Syndicates can help their members to
negotiate in a collective approach the salaries, benefits and solve obstacles in a more
effective way. It could be beneficial to create incentives and awards between the
members to motive and align their activities more formally.