As COVID-19 hammers economies worldwide, the informal sector has become engulfed in an unparalleled crisis. Deemed a barrier to inclusive development and the full exploitation of citizens’ potential for economic progress, the informal sector is, however, often the only livelihood option available to millions of people across the world.
Currently, an estimated two billion people, comprising 61 percent of the world’s employed population, rely on the informal economy for livelihoods. International Labor Organization (ILO) estimates indicate that informal enterprises represent about 82.7 percent of all employments in low- and middle-income countries, ranging from 85.8 percent in Africa; 68.2 percent in Asia and the Pacific; 68.6 percent in the Arab States; 53.1 percent in Latin America and the Caribbean; to 25.1 percent in Europe and Central Asia.
Women in the developing world are particularly affected by informality, which compounds women’s barriers to equality. It lowers their access to finance; diminishes their ability to exercise property, business, and labor rights; limits their networks, heightens their vulnerability to extortion; and depletes their voice and visibility.
COVID-19 is having a disproportionate impact on women’s work and enterprises in the developing world. Compared to men, women are 1.8 times more likely to lose their jobs during this recession. Due to a combination of well-documented factors, women-owned informal enterprises in the developing world were already in a vulnerable and precarious situation before the pandemic. Since then, COVID-19 containment measures such as mobility restrictions, physical distancing, quarantines, lockdowns, social isolation, and closures of markets have worsened matters. These actions have disrupted the supply chains that many women-owned informal businesses rely on, shrunk their client base, triggered losses and damage to their goods, and forced many of these businesses to operate below capacity or shutter temporarily or permanently.
So, what can be done post-COVID-19 to counter the compounding impacts of the pandemic on women in the informal economy? Read more to find out what strategies we suggest to ensure recovery.