Formal and Informal Sector Interdependence

Informal sector, as the opposite of formal sector, is a term that used to describe a people or a group of people who work outside of the office, no personnel matters, no bosses, and no working hours. They don’t have a regular salary but they get income from their own works.

Informal sector such as street vendors, food stall, and other kind of small merchandiser are easily seen over the Jakarta area. When we walk along the city streets or going for some exercises in open space such as Monas, Senayan or Ancol, then we know that most of the spaces are used. Beside, they exist in every strategic place such as hospitals, offices, schools, parks, and so on. At another moment our car is stopped by traffic lamp, someone suddenly come to us to offer impatiently some kind of things like cigarette, newspaper, candy etc. As the result, sometimes we feel uncomfortable with them even to some extent we think that they have disturbed either our activities or privacies. At the same time, government officer judges that they uncontrolled grow, so it has to be reordered. In conclusion, informal sector is a reality in our life that sometimes we don’t agree with their existence.

Is it true that they are a useless person or people? In some cases, actually they support our activities so much. If you were a civil servant, can you imagine having a lunch at a restaurant everyday? If you were a driver, where can you get instant information, which is available in magazine or newspaper? When you study at school or campus, do you always prepare completely your equipment before? What will you do when you lose or forget to bring it? Do you always go to supermarket to fulfil your daily requirements? There are many similar questions that can be proposed to describe the role of informal sector. In other word, informal sector is more appropriate and more helpful in fulfilling our needs. In addition, they offer a cheaper price for their merchandiser, so we can thrifty with our income.

On the other hand, they will get some profit from their sold commodities. This profit will be used not only for fulfil their daily requirements but also for buy another goods / merchandiser at wholesale. Those explanations show there is a mutual relationship between formal and informal sector. The most important thing is how we make a system that will be able to continue the relations in harmony.

Jakarta, April 2001