What can be observed immediately from strreet vendors in developing countries is that they operate in a vaccum of regulations, in addition to the absence of standards. They may wish to emulate some of the street vendors in developed countries, regardless of whether they sell gifts to tourists or they sell hot / cold food.This can be achieved if the government provides the legal framework that protects them, by offering them insurance protection for example in exchange for a small symbolic fixed contribution to fiscality; by protecting them against unlawful competition...etc; by offering them the facilities to standardise their mobile outlets to the current hygiene and structural standards (this would depend a great deal on their activity sector). Only then, they can be fully integrated into the economy. Indeed, their integration into the official economy is beneficial for them and the local authorities.

In any developing or underdeveloped country street vendors play a very important role in the local economy. While they earn their livelihood, and also offer goods at the door step of the consumer at reasonable prices, by cutting down the marketing cost of their wares. They also provide a perfect competition type of situation while vending on the streets as the consumers have many options available with them. Having said that, I also feel that street vending at times create problems for bigger retailers, because they offer the minimum prices possible to the consumers, but in the process, quality of the produce becomes a causality. The over crowding at the streets does create traffic issues for the commuters at times. It would be advisable to have special vending zones in the cities where only local vendors are allowed to sell, it would the consumer who has to decide where to buy from and not the vendors or retailers who are often seen at logger heads.

Street-Vendors play a vital role in local economy. They need legal protection and training. In India, it has generated employment to thousands of people.

We can provide markets dedicated for them particularly in urban areas along with necessary supports e.g access to micro-finnance public toilet, low-cost housing and other institutional assistance, etc. We can register them so that we can get information of their population size and needs.

I think that the key issue to decide at the outset is whether you want to formalise their economic activity or whether you want to provide greater social protection for the street vendors themselves. These are two separate issues which are often confused. I think that most scholars and policy makers think that by formalising the work of street vendors, this will result in them having greater social protection. However, it may be better to start with thinking about how to provide them with greater social protection and not to think about formalising their economic activity. Martha Chen is very good on this subject who is at Harvard University

Jumping off from Colin's comments: In some parts of Mexico, beach vendors are being formalized through the requirement to have licenses (which also provides revenue for the municipality). They are offered protection through the Seguro Popular (Popular Health) program in which medical care is extended. It is free to all those in the lower 4 income deciles. Professional families with a greater income, who are not covered by benefits extended to formal workers, can co-pay to be part of the program.

In many countries there is a high tax burden. In addition , there are various taxes and government control instances. Ie even abolished completely the possibilities linked to any form of corruption, the small business has difficulty applying their time to address all that is required for the formalization. An interesting solution presented in Brazil was the creation of companies governed by one system called " SIMPLES" . This is an uncomplicated way of dealing with the government and pay taxes Ie a proactive way to formalize existing business.

It is extremely important that a business, however small, EVER feel marginalized or running from the law. In other words, there are already too many crimes for governments combat and NOBODY gets nothing in simply puting the label ILLEGAL or CRIMINAL in a large number of small business, whose owners simply can not meet the above legal requirements - more suited to large businesses.

Evidence from various studies show the positive impact of vendors/workers in the informal economy: job creation, income generations, and facilitates the distribution of goods and services. However, their activities are still being seen by many, as undesirable, hence, unappreciated and unrecognised by many governments. In fact, some are quick to ask such questions as "how these economic agents can be formalised". Contrasting the popular position, I would rather explore how the informal economy can be made to make maximum contribution to the economy without 'boxing them up' within the walls of the formal bureaucracy. In doing this, both the state and participants have roles to play. For example, government can provide necessary support, whilst informal participants are encouraged to form associations. #These and more are fully discussed in my soon to be published thesis#. I will post the link ASAP.

Thank you all for responding and enriching the discussion; Bringing all responses together, a clearer picture is drawn on our look at the street vendors; but still I am not clear on how street vendors (or informal economy) can contribute to creating a sustainable city?

Thank you again!

Colin C Williams is raising important points. We have to bear in mind the fact that any formal intervention by the state or whoever is likely to introduce a certain degree of formality to the informal sector. But formalizing the informal sector has its own unintended negative consequences, which tend to exclude rather protect those who need to be in the informal sector for their livelihoods and survival. I take that street vendors already contribute in creating a 'sustainable' city by creating their own jobs and maintaining their families. In fact, sustainability is a relative term and it depends on how one defines and apply it.

Licensing does involve exclusion. There is a need for vendors, for example, to belong to a union or have some other form of influence over the municipality, here in Mexico, in order to acquire a license. And newcomers to the informal economy, which is constantly burgeoning, often lack these forms of influence, and are subjected to harassment by the authorities, their wares confiscated, and being subjected to fines.

Street vendors are crucial for the economic development and employment creation in most developing countries. However, their existence connote two important meanings:

1) They are solely dependent on the formal existence of big/huge business people who use them to act as channels of distribution through selling and finally presenting the funds attained every day or weekly to the big business owner, who, in fact are the vendors employer. Most of these vendors provide no evidence of tax payments or receipt when effecting sales, hence they jeopardize the economy as their selling affect negatively the revenue of the government.

2) Studies indicate that even the few who manage to purchase goods by cash from the formalized business, yet they carry on double roles as they cannot sustain their lives through the income they attain. Henceforth, they regularly involve into stealing and immoral practices that culminate income for sustaining their lives.

In solving their presence some critical issues must be looked at keenly through answering the following questions. Why do vendors exist? some answers include the presence of unfaithful wholesaler business people who provide goods to the vendors and collect the sales from them, which are nontaxable. If we deal in strict sense with the formal sector, most of the vendors will vanish. Secondly, why do they collude with formal sectors? Perhaps, most developing governments have weak laws or they are reluctant to make the rules work. Working seem to be accidental rather than mandatory. Hence one can survive without working, and can engage into small activities which do not amount into sustaining the person. We must workup and protect those who deserve protection and formalize those business that are worthy to be formalized. The weaker the government in managing administrative rules, the more the likely the vendors. That is is why, in most case, the poor the country, the more the vendors. We must learn not to compromise with our weakness, rather strive to improve our economies through working hard.

Thank you Molefe, Tamar, and Norman for comprehensive responses. They were really useful.

I think Norman has given quite an insightful picture of street vendors. However, I don't think that they (street vendors) should be left to the mercy of the formal traders who use them as "shop fronts"  for trading. Informal street vendors are a major part of the developing world. They need the support and protection of the government without the entrapment of red tape. They should be supported as part of the government's poverty alleviation project, given seed funding (this will keep out the big businesses whom they 'work' for. They need an association which will give them a voice to make decisions regarding their situation. This should be a facilitative process  rather than a restrictive one. Government should also be involved in demarcating areas for business, provide the infrastructure etc. through a collaborative process.