•     |    
    Initial credits
  • 00:06    |    
    The future of global economy
    • A world without property rights
    • Companies' perspective
    • Countless informal enterprises
    • Proctor & Gamble: Benefits and dependence of formal companies on informal economy
    • Mobile phone firms in Africa: Symbiotic relationship between formal and informal economies
  • 14:25    |    
    World-wide growth of informal economy
  • 16:45    |    
    What about taxes?
  • Paying bribes: Formal and informal economies
  • 20:13    |    
    An economy of unrecognized strength
    • The downside to banning informal economies
    • The flea market is the free market: Principles for the economic future of the world
  • 24:39    |    
    "System D"
  • 27:19    |    
    Questions and comments section
    • Should government develop public policies that protect informal economy?
    • What are the three more important obstacles government creates against the promotion of informal economy?
    • How can a formal, tax-paying company compete with an informal company?
    • Can big and small businesses both benefit from tax reductions?
  • 39:11    |    
    Final words
  • 39:21    |    
    Final credits

Informal Economy in Latin America

New Media  | 24 de abril de 2013  | Vistas: 8

Robert Neuwirth argues against the conventional view of informal markets as negative, criminal sectors of economy. For Neuwirth, the global economic future involves smuggling, piracy, and flea markets of all sorts. And all of this isn’t necessarily unwanted. On the contrary, the ever-growing framework of what we call “underground businesses” is currently one of the strongest sources of revenue and innovation, especially in developing countries.

Informal economy occurs openly, in the middle of the street, and no one seems to be complaining. Companies’ profit margins are not impeded, and in some cases, they grow. Large multinationals recognize the added benefit of a source of market research and active networks where products and brands can be sold. When confronted with the argument of unfair competition for real companies, Neuwirth disagrees. Informal businesses still pay taxes, even if not in the traditional way. Underground payments to government officials are often requirements to stay in business. Bribery exists both in formal and informal businesses.

According to Neuwirth, there is a downside to banning these vibrant, dynamic marketplaces. They are very often systematic and self-reliant mechanisms developing populations use to make a living. In other words, they are lifelines. And they are here to stay. Rather than stifling their success, Neuwirth believes government should create public policy that encourages their growth. This “System D” - as he calls it, after “debrouillardise”, french for self-reliance - is a promise to developing world prosperity.


Robert Neuwirth is an American journalist and author of the books…