It is an economic term derived from the idea of airbags in cars during sudden collisions, much like the current global crisis that has shocked the world with its severity, despite warnings from the wise for years. What always serves as this ‘airbag’ is what is called the ‘informal economy’. It encompasses all artisanal, commercial, or even simple service activities that are unregistered in the system’s records and operate outside any form of government control. Who, for instance, can regulate the work of Abd al-Baset al-Surugi, Ziko the falafel cart owner, or even Um Samar, the domestic worker? What is truly striking and worthy of appreciation, however, is that they are all the unsung heroes who help economies emerge from any crisis that might shake a system.
To understand this equation, we must revisit economic history, specifically to 1987 in Poland, when the state treasury went completely bankrupt and failed to pay salaries to workers across all sectors—effectively the entire population. At the time, the country was under a highly centralised communist system. The system collapsed, and the people went hungry overnight, with the shelves of consumer cooperatives emptied of everything. This coincided with a tragic scene captured by journalists and witnessed by the world: a hysterical demonstration by a group of mothers screaming in the streets, clutching their infants, who were on the verge of death due to the nationwide shortage of milk. The cause of this disaster was simply the absence of an informal economy to sustain life when the formal system faltered. Thus, when the system collapsed, everyone fell with it, as all were part of an economic structure that only recognised development through highly complex activities.
Poland emerged from famine as soon as humanitarian aid arrived from the West, which was keen to expand its influence eastward, taunting the Soviet Union. The Catholic Church did not abandon its followers in Poland to starve and played a distinctive role in distributing aid to its flock. The humanitarian crisis passed, and it was then the system’s turn to take responsibility for restoring normalcy. It made a genius decision, contrary to what typically happens in such disasters, by not increasing investment. Instead, it lowered its ambitions for development and growth, entrusting the ordinary people to steer the wheel of growth this time, with a comprehensive plan to support the informal economy. Indeed, Poland emerged from the crisis in record time, and the government offloaded many economic burdens. This was followed by a phase of regulation and development for that sector, parallel to the formal economy, and Poland is now a member of the European Union.
So, is Egypt fortunate to have such a broad informal economic sector? Absolutely. Many developing countries strive to expand this active sector, which absorbs shocks, and Egypt has it without effort—a stroke of luck for the government in the current crisis. Ask Um Rida, the guava seller in al-Mounira market, if she has been affected by the stock market crash or even the market’s collapse after an earthquake. The truth is, none of this concerns her—‘it’s all in God’s hands’. What matters is that no self-proclaimed geniuses come along again, as they did before the crisis, calling for the regulation and legalisation of this sector under government oversight. Their rhetoric might sound reasonable, but it is certainly not suitable for a country suffering from extreme poverty and distribution crises.
Perhaps such measures are more fitting for countries at the top of economic and human development rankings, with trade surpluses—and we are certainly not among them. As long as most of us live by the principle ‘bite my heart, but don’t bite my bread’, it seems we are far from any idea that might descend from the heavens for someone to integrate this sector into the already broken formal system, teetering on the edge of collapse in the darkness of the current financial crisis. What is needed nationally is support, not oversight. And support here does not necessarily have to be financial; perhaps administrative and developmental measures would suffice to open the door for these professions to grow and gradually join the formal economy. After all, not every Ziko can become al-Tabaei al-Domyati without someone lighting the way for him.
This article is originally published by AlBorsa in Arabic and later AI-translated by South Push.