The informal economy in Pakistan is one of most-understudied phenomena despite its huge prevalence. Marketplace (bazaar) traders are an important part of the informal economy of the country and sociologist Umair Javed has written an insightful chapter on it in Akbar Zaidi and McCartney’s edited volume on Pakistan’s Political Economy, 2019 and we are going to refer to it in this article today.
Javed starts off by agreeing with some other contributors of the book that the Alavian thesis needs revision. According to him, “Transformations such as deepening capitalism, increased urbanisation, and gradual, albeit often curtailed, democratisation during the last four decades have changed the terms of state-society engagement and, consequently, the nature of political sphere itself” and the Alavian thesis of the “overdeveloped state” needs to be extended.
The chapter mainly revolves around bazaar traders in Punjab. The retail and wholesale activities in bazaars are run by these traders. These traders are part of the “intermediates classes” and constitute a large part of the informal economy and the services sector in Pakistan. There are roughly 285,000 bazaar traders in the country and the estimation is that 165,000 of them are in Punjab. These traders have over $50,000 of annual turnovers, and employ labour.
As stated earlier, bazaar traders fall in the realm of the informal economy that is 91 percent of the total economy, employing 65 percent of the total labour force. The bazaar economy is the biggest retail and wholesale part of the services sector and the services sector itself contributes more than 54 percent of GDP. According to Javed, the retail and wholesale subsector “currently contributes 18.4 percent of total GDP, and employs approximately 18 percent of the total labour force, and 41 percent of the working population in towns and cities. While overall economic growth has averaged a paltry 3.5 percent per annum since 2007, the bazaar sector has grown by nearly 6 percent per annum in real terms during the same time period”.
The bazaar traders have played an important role in the local and national politics post 1977. The political influence of traders is embedded in the structure of “domestic capitalism” itself. The traders have expanded their influence in urban Punjab and have a clout on policy administration and governance matters in Punjab.
During the anti-Bhutto mobilization by PNA in 1977, these bazaar traders played a significant role. The Zia regime included these traders subsequently in the power circles and distributed selective patronage to them. The local government election results in the Zia era showed that traders won electoral gains. They were also able to graduate in large segments to the provincial and national level elections. The old political class was in disarray due to the high-handedness of the Zia regime and a new political class was born representing traders and their interests in urban areas. “In this context, a personalized, vertically structured form of patronage politics came to take precedence over the class-based mobilization of the Bhutto era”, according to Javed.
Behind the PNA’s successful anti-Bhutto mobilization was the convergence of influence of bazaar traders and religion-based activism. While the PNA ended abruptly, the bazaar traders and religious activists alliance continued to prosper in the decades to come. This bazaar-extremism relationship has played a significant role in the influence of Islamic groups and perpetuated the exclusionary politics of Punjab.
Bazaar traders had control over money which facilitated them to finance the patronage politics in Punjab. The analysis of 1979 and 1983 local government election trends shows that bazaar traders were the “largest segment” who climbed the ladder to reach the level of provincial and national politics. They are also involved in earning social repute through charitable acts in addition to dishing out personalized patronage. They have also cultivated good links with state institutions and the bureaucracy and use their organizational muscle to avoid documentation and taxation.
The bazaar traders’ “shutter-down” agitational politics made them mobilize their cadre and it plays an instrumental role in “contentious politics” in the country. The traders association called Anjuman-e-Tajran, first active in the PNA movement, has successfully mobilized against various governments’ efforts to document and tax the informal economy of retail and wholesale.
Javed concludes on the basis of his case study of bazaar traders that the process of the state being “socialised ‘from below’ to a considerable extent” is reflected in the ascending power of traders and it offers a commentary to extend the Alavian “overdeveloped state” model. It is a testament of the “increasingly informalised and fragmented nature of capitalism in Pakistan”. The state caves in to the “personalised and localised patronage relations” and largely does not have its cohesiveness and autonomy to the point where it cannot even generate enough revenue for spending on the pro-poor growth and more substantive democracy is forestalled.
It is important to research the prevalence of the informal economy in developing countries like Pakistan and the work discussed above does that from the lens of bazaar traders. Innovative research is a fulfilling task as it enables you to bring to the fore the understudied social realities.
The bazaar traders have been instrumental in spreading their influence through personalized patronage politics and their alliances with other “religio-cultural” groups. They have been able to successfully subvert the efforts to document the economy for many decades.
There is a need for a long-term vision and planning on the part of successive governments in Pakistan to break this huge informal clout of the bazaar traders and achieve documentation and taxation of the economy.
The writer is an Islamabad-based social scientist.