Venezuelan Informal Economy, Scope and impact

Look who does not understand, nor understand a lengthy explanation. Constantly present government INTRODUCTION Bolivarian Revolutionary chaired by Lt. Col. Hugo Chávez Frías, said that the informal economy in the country will disappear, since the government with its socialist ideology, is committed to providing opportunities to work and avoid further increasing poverty and economic reports continue to be given in all the cities that make up the country. Unfortunately this is not a reality in the country and the informal economy has increased, just walking through the main cities of Venezuela and we see the large number of hawkers leaving much to say this, for what it represents and affects the business sector organized, productive enterprises in the country. This situation should be corrected, the government take the necessary measures to prevent the increase of street vendors who survive through the informal economy continues to affect the country's economic reality GENERAL, CONSIDERATIONS, THE IMPACT Political uncertainty currently facing the management Venezuela President Hugo Chavez has given rise to many effects that have significantly affected the business sector, where many companies have ceased operations, some closing their activities, others with low productivity due to the uncertainty, risk by the actions of government, especially to what has been very significant as exchange rate policy.

All this as we said José Aguilar has continued to engender informal activity, and not only among the poor and traditionally underserved, but young people are added annually to the labor market and before formal salaried employees who have been forced to jump socio-economic status in a process of downward social mobility. According to data from the National Statistics Institute (INE), the end of 2003 about 53% of the economically active population is developing informal economic activities. There are currently over 50% since then, consider that informality has several causes conceptually overlapping and co-determined. There is some consensus that the high costs of doing business that discourage private initiative, in parallel with the recurrent macroeconomic instability that does the same and leads to unemployment, in an environment in which the demographic transition that renews the workforce requires, have clear effects on increasing informality. New ideas emerge to give explanation to this phenomenon, recently partnered with the rules that deny opportunities for private investment in more profitable sectors in our economy compared.

The fact that despite what the current government to bring the country's economic crisis continues as if nothing and survival patterns are consolidated as opportunities for real life strategy to avoid running down the road. The informal sector of the economy increases gradually reaching almost 60% of the population and is creating an anarchic situation, uncontrolled, large-scale in major cities. Against unemployment, rising food prices and shortages of housing, it triggers the activity especially on the streets of downtown where vendors of all kinds. Added to this is the serious health crisis, where there is no guarantee of having a good service and where specifically sick in the country is a major risk. It is worrying, especially at this time dicembrina approaching, as there is a growing development of the informal economy in Venezuela, says that as a challenge and imposes Aguilar claims the attention of the leaders in charge of the country's economic progress, attention should realized by enhancing the development of small and medium enterprises, with the aim of achieving economic stability in Venezuela that we all desire.

Worrying about the current government to seek solutions, actions, programs that prevent the growth of the informal economy that only truth in Caracas is estimated about 50,000 people working in it and about two million across the country. It is known as Aguilar said of the 5 million people in Venezuela working in informal trading activities, 30% is devoted to trade. Itinerant traders or peddlers are a sub-group within the informal trade, and in relation to the informal economy as a whole, are just the visible tip of this huge iceberg. For our specific context, it is estimated that in the Metropolitan District of Caracas around 50,000 families are dedicated to Chapman. The peddler as an economic activity that are associated with serious problems are expressions of social decay, poor quality and unproductive labor, crime, abandoned children, child labor and prostitution, etc.. These problems are shared so much to informal traders as neighbors, passersby, pedestrians, workers in the area, and formal traders. But groups are not only affected by the growth of street vendors. Other branches of economic activity upstream in this activity recognize significant business potential to pose a decentralized and efficient army of salespeople.

Likewise, criminals, gangs, and other groups benefit from the apparent anarchy that prevails in areas where this activity thrives. Finally, some public officials seem to recognize in Chapman an important "breeding ground" for the development of populist clientelism or corruption. However, the social demand for finding solutions to such a dramatic problem, it seems today to encourage the achievement of a shared solution to reverse negative trends and values ​​the positive phenomenon. There is a clear change of attitude: from denial and hatred of the hawkers to the commitment to promote among them a "productive solidarity," a new view of the entrepreneur finance or real estate industry who discovers that a peddler pays 350% of annual interest and, at best, your business could be there, a new political attitude of the bet to win legitimacy now working on finding solutions, even a new thought of the hucksters who want a decent job. Very interesting when indicated, that the inability to hover valid alternative solutions and shared between actors who are affected by this reality, derives mainly from ignorance about the dynamics of socio-economic and political hucksters operates around the phenomenon.

In the search for solutions to the problems this phenomenon poses deprive orientations in which each industry so poorly organized and acting for their interests, try to impose their vision. In parallel and as a result of the above, the shortcomings of local leadership to conform to suppliers of solutions and demanding real public policy actions, through the mechanisms of democratic participation, reinforcing the trend towards preservation of these social problems. There is an urgent need to remove the veil that hides the dynamics of government interaction - formal informal traders, merchants, neighbors, as it exists today, tends to reinforce the dominance of non-property rights and the practice of law. Relations predominate patronage, bribery, bid for political support. A public policy proposal must be based on a conceptual approach of the actors themselves to the dynamics that are involved, which would give an alternative solution. This is needed to boost the human capital of informal traders and claim the role and importance of dialogue in conflict resolution. The government of President Chavez should identify more with this serious problem and look for alternatives to job creation, assist small businesses, entrepreneurs transform their business activities in companies that favor the government's plans regarding to commercialization of products, but now with the new foreign trade policy that is manifesting through alliances with countries that are major economic and commercial activities worldwide.

Take into account that the informal economy is but a symptom of a chronic disease of the legal system, political, social and economic development, since Venezuela is facing a huge hill to go back, as is the current condition of coating a country of an informal economy in formal employment in a healthy and productive economy, for the informal economy is a global phenomenon that has certainly been encouragement and financial relief for Venezuelans who have been forced to cope outside the legally constituted institutions and the financial market. www.entorno-empresarial.com

...