a new generation of bangkok street vendors: economic crisis as opportunity and threat

Cities xxx (2012) xxx–xxx

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A new generation of Bangkok Street vendors: Economic crisis as opportunityand threat q

Chuthatip Maneepong a,⇑, John Christopher Walsh b

a School of Politics and Global Studies, Arizona State University, USAb School of Management, Shinawatra University, Thailand

a r t i c l e i n f o

Article history:Available online xxxx

0264-2751/$ - see front matter � 2012 Elsevier Ltd. Ahttp://dx.doi.org/10.1016/j.cities.2012.11.002

q An early version of this paper was presented toWomen’s Research Networking Conference, organizedSocial and Human Sciences in Asia and the PacificFebruary 9–13, 2009, Imperial Tara Hotel, Bangkokgrateful for comments of Prof. Cheung-Tong Wu, Greviewers. The mapping technical assistance of Aappreciated.⇑ Corresponding author. Tel.: +1 6622041487.

E-mail address: [email protected] (C. Maneep

Please cite this article in press as: Maneepong, CCities (2012), http://dx.doi.org/10.1016/j.cities.2

a b s t r a c t

In 1997, the financial crisis seriously damaged the Thai economy and led to the closing of many compa-nies. Previously, it had been believed that laid-off workers would mostly return to rural employment orpart-time urban tasks. However, research among street vendors in Bangkok reveals that many of theretrenched workers preferred to, and did, remain in the city and put to use their latent business andentrepreneurial skills to practice by establishing their own informal businesses. This group of vendorstends to dominate these activities, often through business savvy, with experience in the formal sector.Instead of the ‘‘street’’ image of vendors being that of domestic migrants, the ‘‘new generation’’ of vendorsis evolving into something more complex. The paper focuses on documenting and understanding the phe-nomenon of new generation street vendors. We attempt to derive lessons from the 1997 economic crisisto improve the transition of vendors from the formal to ‘‘new’’ informal sector under current, and likelyworsening, economic conditions. This paper analyses how and why these two groups express themselvesand how they respond differently to the socio-economic and political forces that have an impact on theurban space they share. It then considers whether policy makers should regard street vending as a viablepart of the economy which is not transitional but more permanent and should be regarded as an impor-tant part of the urban economy of industrializing nations such as Thailand.

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Introduction

Street vending has been conventionally considered a source ofemployment for the poor, uneducated, and recent immigrants tothe cities. Furthermore, it is typically associated with developingcities. The authors question these perspectives. Street vending isan important activity in most cities, developing to developed.The range of vending activities, particularly in developing cities,ranges from provision of low cost food to high end branded prod-ucts and services. This case study, based on an extensive researchproject in Bangkok, Thailand, set in the context of the empiricaland theoretical literature on global street vending, examines thecontinuum of street vending activity in Thailand from a spatial per-spective. It identifies a post 1997 cohort of street vendors charac-terized by advanced business, technical and language skills: a‘‘new generation of street vendors’’. Acutely aware of market con-

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the UNESCO Gender Studies &by the Regional Unit for the, UNESCO, Thailand, during, Thailand. The authors areabi Guigu, editors and peerndrew Gulbrandson is also

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., & Walsh, J. C. A new generati012.11.002

ditions, they operate utilizing sophisticated, but often informal,networks. The authors contrast this group with the ‘‘old genera-tion’’ of street vendors, who sell mostly street food and low-endclothing to a customer base of mainly lower income workers inthe neighborhoods in which they live.

The success of both groups is very spatially sensitive. When lo-cal governments force them to move as little as 200 m, their busi-nesses can be ruined, such as the Bo Bae market relocation at theend of 2006. However, at a more macro-spatial level, the spatialdynamics of the two groups diverge. The new generation of streetvendors is increasingly clustering (around product/service special-ization), and are disproportionately found in the center of businessdistrict (CBD) and tourist areas, particularly with respect to thegrowing mass transit systems and the apartment blocks being builtnear their stations (see Fig. 1). On the other hand, the geographicdistribution of the low-end vendors is much more closely alignedwith the distribution of Bangkok’s population.

Chen (2007) suggests that policy-makers should recognize therole and importance of the informal sector, including street vend-ing business, as a microenterprise that deserves support and pro-motion such as offering training and secure areas. In line withthe International Labour Organization (ILO) agenda on decentwork, every man and woman deserves to have opportunities forwork in conditions of freedom, equity, human security and dignity(Asian Development Bank (ADB) & ILO: Bangkok, 2011). However,

on of Bangkok Street vendors: Economic crisis as opportunity and threat. J.

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Fig. 1. Major areas of street vending business in Bangkok.

2 C. Maneepong, J.C. Walsh / Cities xxx (2012) xxx–xxx

the old generation of street vendors is vulnerable, often passive, inthe face of market change and harassment from powerful players(officials, street mafia). This point of view is reflected in case stud-ies of Bangkok (Charncheongrob, 2001, Nirathron, 2006), Vietnam(Jensen & Peppard, 2007; Walsh, 2010), Cambodia and Mongolia(Kusakabe, 2006), and Indonesia (Yatmo, 2008).

On the other hand, the new generation of street vendors locatestheir vending businesses in strategic areas in CBD and tourist areasand has to pay high rent for those private pitches. Thus, they aremore adaptive to official rules and regulations and avoid harass-ment from powerful players and incidences of corruption situa-tions. It is mostly external forces that prompt both sets ofvendors to take up operations, either as an attempt to alleviategenuine poverty or to take advantage of emergent entrepreneurialopportunities. Tolerance of corruption by officials and criminalsand repression of vendors maintains socio-economic inequalitiesinitially created by the external forces.

This study, based on street observation, media content analysis,interviews with officials responsible for street vending, and exten-

Please cite this article in press as: Maneepong, C., & Walsh, J. C. A new generatiCities (2012), http://dx.doi.org/10.1016/j.cities.2012.11.002

sive interviews with 39 vendors (19 new generation, 20 old gener-ation) in CBD areas such as Silom Road, tourist areas such asKaosan Road and suburban areas such as Bangkhen in the northof Bangkok during 2007–2009. The interviews examine the differ-ences between the two groups of street vendors particularly in re-gard to their characteristics, strengths and performance, andobstacles and barriers. Interviews were conducted face-to-face inthe Thai language (central dialect) and were accompanied byextensive note-taking prior to interpretation of findings into Eng-lish for subsequent analysis using recognized content analysistechniques.

This paper begins with the literature review of urban planningparadigms for the street vendors, followed by an examination ofBangkok Metropolitan Administration’s urban street economyand policy on street vending, which is the body charged with reg-ulating public space in the city. This is followed by a discussion ofthe findings of the different behaviors and business profiles of thetwo groups of street vendors that have changed the social base ofthe vendors and urban economy of Bangkok.



1 US Dollar = 30 Thai Baht.

C. Maneepong, J.C. Walsh / Cities xxx (2012) xxx–xxx 3

Urban planning paradigms for street vending

As studies on urban economies demonstrate, most researchershave a normative vision of informal economies as offering poorquality of employment, low levels of income and poor business pro-file and performance, street vending businesses provide little profitand are unable to lift poor people out of chronic poverty in Africa(Fonchingong, 2005; Lyenda, 2005) and in South Asia (Bhowmik,2007). In addition, street vending businesses are involved in illegalaffairs starting from encroachment of public pavement, selling fakeand poor quality products and inducement of mafia and corruption(Kusakabe, 2006; Phitsanbut & Apichanapong, 2007; Siriprachai,2000) and represent undesirable aspects of commerce such as lackof hygiene (Department of Public Affairs, Office of the PrimeMinister, Thailand, 2005). Policy implications from these studies fo-cus on job creation and employment provision in an organized,well-managed, stable, productive and growing formal sector to in-crease the economic opportunities for the poor, including streetvendors (Lyenda, 2005). Street vending employment is only consid-ered a means of acquiring the skills and experience necessary togain access to employment in the formal sector. Following exclusionrecommendations, city authorities consider street vending busi-nesses as symbols of under-development. As a consequence, thereis a desire either to sweep the vendors out of sight or to eliminatetheir presence altogether. Their own government officials harassstreet vendors where these vendors located their business followingthe distribution of their customers. In Mexico City Mayor MarceloEbrard tried to resolve the street vendor ‘‘problem’’ by sending morethan 1000 police in riot gear into the historic center to keep vendorsfrom setting up stands and blocking sidewalks (McKinley, 2007).

A second approach employed in many cities including Bangkok isto regularize the activities of business vendors and bringing theiractivities within the scope of city authorization, for example by des-ignating some pavement areas to accommodate street vending busi-nesses, reduce the number of street vendors in temporary areas andoutside designated areas. However, there remain difficulties in rec-onciling different interests in public uses and so street spaces consti-tute conflict zones or exclusive and elite city locations where streetvending is generally barred (Bromley, 2000; Cross, 2000). In addi-tion, without legal status, street vendors paid illegal compensationcommissions or unlawful protection fees to third parties in orderto secure their business (The Friedrich Naumann Foundation (2007).

The third approach uses social inclusion as a means of empower-ing participation and becoming embedded within their communityand within the wider social and economic relations of the house-hold. Having choice and being in control are important characteris-tics of inclusion (Gray, 2000) and the contribution made by micro-businesses paves the routes to social inclusion. Some Asian citieshave taken the social inclusion approach by acknowledging the roleand contribution of street vendors and enabling their registration.For example, Singapore established the Department of Hawkers in1971, while Kuala Lumpur set up the Department of Hawkers andPetty Traders in 1986 and, in 1990, announced the National Policyon Hawkers. Street vendors benefit from training, access to creditand facilities improvement. During the Asian economic crisis,employment generation in this sector significantly reduced eco-nomic pressures (Bhowmik, 2005). In addition, specialized areassuch as hawker centers in housing projects and Jurong Town Corpo-ration in Singapore have been developed in order to preserve, con-trol and upgrade a health center with other services (Tung, 2010).

Bangkok’s urban street economy and policy on street vending

As in other developing countries, Thailand’s informal sectorplays a significant role in employment creation, production and in-come generation. The National Economic and Social Development


Board (Office of the National Economic & Strategies onManagement of Informal Sector (in Thai) (Bangkok: NESDB,2004) estimated that labor in the informal sector was about71.9% of the national labor force. The value of production of theinformal sector in urban areas was about 83.9% of the overall urbaneconomy. From 1997 to 2007, the informal sector contributed57.2% of Gross Domestic Product, meaning Thailand ranked sev-enth among countries with the highest ratio of revenue derivedfrom the informal sector (Thailand Outlook, 2010).

The 1997 Asia financial crisis resulted in massive lay-offs.Approximately 6% of the total number of workers (465,000 of7,600,000 workers) lost their jobs. Consequently, in that year,about 67% of laid-off workers (310,500 of 465,000 workers) turnedto self-employment under the National Statistical Office’s categoryof ‘‘hawkers, peddlers and newsboys.’’ The alternative that manyfaced was to return to their rural homes and seek employmentor partial employment in agriculture. Many preferred to remainin the city and make what income they could from street levelactivities. By 2000, the self-employment category increased 26%compared to 1997. Consequently, about 5% of the total labor forcewas self-employed (Nirathron, 2006). However, some unofficialdata report 900 vending spots in Bangkok involving a total of about250,000 registered and unregistered vendors (International LabourOffice (ILO), 2002; Siriprachai, 2000). The difference between offi-cial and unofficial figures is enormous and suggests that the infor-mal sector is more significant than usually acknowledged.

Several BMA development plans over the past several decades,including the current Plan, have promoted the concept of a ‘sys-temic, orderly and livable’ city. Since 1972, the BMA has beenaggressively monitoring vending by enacting specific regulationsconcerning fixed and mobile vending. The effort to clear the pedes-trian pavements started in 1973. In 1977, under Governor Cham-long Srimuang, the BMA Law Enforcement Department wasseparated from the Policy Bureau and became one office underthe BMA (Nirathron, 2006).

Royal Thai Government agencies have been promoting theinformal sector to achieve urban poverty reduction since theNational Fifth Plan (1982–1986). Assistance programmes providedinclude skills training, hygiene and sanitation training, financialsupport and social protection. Recent initiatives are the implemen-tation of the asset capitalization concept to provide vendors withcollateral to access soft loans from the People’s Project under thesupervision of the Government Saving Bank (Nirathron, 2006).

Characteristics of street vendors

The ratio between the old generation of street vendors and thenew generation of street vendors is clear. The recent surveys ofNirathron (2006) and Charncheongrob (2001) confirm the highnumber of the former group as subsistence entrepreneurs, espe-cially in the food street vending business. On the other hand, theFriedrich Naumann Foundation (2007), which conducted a widersurvey with multiple types of street vending businesses and insome medium-to-high income and business district areas such asPathumwan and Bang Rak districts, reveal a significant proportionof the new generation of street vendors who applied for and re-ceived bank loans, albeit with some difficulty. The average incomeof street vending of both surveys is above the minimum wage ofBangkok (169 Baht1 in 2004 and 183 Baht or US$5 in 2006). TheFriedrich Naumann Foundation (2007) indicates that street vendorsearn twice the daily income of general workers in Bangkok (333 Bahtper day).




This study reveals a common pattern of people who have joinedthe trade since 1997 may be former professionals, such as bankers,engineers or office managers. They approach the business of streetvending from a more sophisticated standpoint than their col-leagues. In some cases, they have university-level business educa-tion and, in one case, a vendor was pursuing an MBA. As inMalaysia and Singapore, this paper has revealed a new phenome-non of conditions experienced by street vendors, new generationof vendor group in which the vendors are educated middle classentrepreneurs with at least a vocational college qualification.These street vendors utilize their business and professional experi-ence in banking and high profile companies to develop their infor-mal businesses. The majority of these street vendors choose not togo to work or to return to work in the formal employment system.Almost all of them are full-time street vendors and are more ma-ture and experienced (aged 35–55). In contrast, the age of vendorsin the old generation group ranges from mid-20s to late-50s. Theeducational background also varies, from Grade 6 to Bachelor de-gree in marketing and business. Agricultural work in the provincesis their previous working experience and that is not very useful forconducting business in Bangkok. Some migrated from the prov-inces, especially the Northeast region, which is the poorest regionof the country, and neighboring countries, while others arehill-tribe people from highlands of the North or else suffer froma physical disability. Most of them are married, although someare divorced or widowed. They are under severe economic pres-sure to set up or maintain their street vending businesses, e.g.being unemployed and/or seeking more income for families.Friends and relatives from the same hometown are sources of basicinformation and provide simple business knowledge, such as loca-tion and type of street vending, availability of low cost accommo-dation and affordable wholesalers. Vendors tend to run theirbusinesses close to their accommodation or that of their friendsand relatives in order to maintain their networks and to reducetheir operational costs, such as transportation cost.

There are, in other words, recognizable differences in the demo-graphic characteristics and business practices of the two sub-sam-ples involved in this study. The old generation of street vendorsencountered here are familiar from numerous other studies,although the new generation has not been so well explored.

Business profile and strategies and physical locations ofBangkok Street vendors

New and old generation of street vendors display differing busi-ness management styles and have different market segments.These street vending businesses are quite different from the basicfood vending stalls familiar in so many Asian cities. Instead, newgeneration of street vendors makes use of sophisticated businesstechniques such as branding, international supply chain manage-ment and franchising at a very small scale and with the use ofmodern information technology. In particular, the selection ofgoods and services offered depends on close observation of themarket and trends within it. Telephone accessories to accompanynew generations of mobile telephones have proved to be a popularchoice for a decade, while others offer toys, traditional herbs andfoods and fashion accessories. Bangkok has in recent years beengoing through a trend for gourmet coffee and for supposedlyhealthy fruit smoothie drinks. Fresh fruit juices and smoothieshave appeared on the streets and some high quality drinks can costUS$4–5. Certain brand-names and imported clothes are priced atup to US$100. However, most goods are characterized by beingcomparatively low cost, especially in comparison with shop items,and are also typically easily portable and appeal to impulse buying.A cup of coffee at Starbucks or an equivalent would represent mostof Bangkok’s working population’s average daily wage. By provid-


ing low cost alternatives, perhaps 10–15% of the original with apersonalized brand, street vendors take advantage of unmet de-mand in the workforce and the desire of friends or colleagues totreat each other, which is an important part of not just Thai culturebut East Asian culture generally. Female office workers and womenin medium-to-low income jobs can also afford to keep up withcontemporary fashion.

Authentic brand names, own brand names and high qualityproducts and services offered by the new generation of womenstreet vendors are targeted at the middle-to-upper income market,such as office workers in business district areas and bazaars. Someparticularly popular rental pitches in private areas such as the ba-zaar behind the Headquarters office of Thai International AirwaysCorporation and Silom business district area cost up to US$500 amonth. However, these vendors can afford it and still run a profit-able business.

On the other hand, most old generation of street vendors runlow cost, simple product and service businesses with limited tech-nology and professional skills for mass market low income Thaiand international customers either in busy public areas, such asin front of Chatujak weekend market or Kaosan Road, or in othertourist and suburban areas.

In a competitive market, street vendors face competition notonly from similar types of product and services in the same marketarea but also from mobile vendors. In particular, since in the oldgeneration group, the business has easy entry requirements withlow investment costs and limited business skills and professionalskills required, almost any existing or new street vendor can chal-lenge old ones. Half of the interviewed old generation of vendors,notably those offering low cost clothes, tattoos and hair decorationfor tourists, have changed some of their products and services afterlosing out in highly competitive markets and do not wish to movetheir existing street vending areas.

The old generation of street vendors runs their business in allsurveyed locations, including illegal pitches, because their productassortment serves every income segment. In private bazaar spaces,many old generation of street vendors cannot afford a rental pitchbut do their vending business by mobile vending or through pullcarts, tricycles or the back of pick-up trucks on street corners inareas unauthorized by the BMA.

On the other hand, the new generation of street vendors largelyruns their businesses so as to serve wealthy customers or in areasbehind first class office spaces such as Shinawatra Building III, ThaiInternational Airways, in front of shopping centers and wholesalemarkets such as Bo Bae. The new generation group tends to rentprivate pitches or legal or allowable pitches provided by the BMAin order to protect themselves from harassment by the enforce-ment officers of the BMA. They rarely use the same location asthe old generation.

Strengths of being street vendors

Poverty alleviation with pride

Interviewed women street vendors in 2008–2009, especially oldgeneration, are happy to share their responsibilities with their hus-bands to earn additional income for the family in order to raisetheir children. For single mothers and divorced women, it is theirpride to make money and to be able to raise their own children.Such women are financially independent. Their parents or grand-parents and relatives provide support to look after their childrenwhile they run the vending business. Street vending, in this per-spective, serves an important social service, in addition to its eco-nomic aspects. It also helps to increase the importance of womenin the economic character of the city while increasing the amount




of public space in the city in which women can safely and respect-ably go about their lives.

Flexibility

Street vending tends not to be an occupation that follows regu-lar office hours. In many cases, the BMA only permits actions after7 o’clock in the evening or the hours of operation might featureexclusively the lunch hour market or the commuter market. Somemarkets only open on certain days or times and vendors restricttheir operations accordingly. Such work schedules are convenientfor those people, especially women, who also have responsibilitiesfor care of children and the elderly or unwell. Others have takenthe opportunity to create portfolio employment systems, in whichthey manage several different business operations and streams ofincome so as to achieve their targets.

For the new generation of street vendors, they do not feel ob-liged or forced by their husbands or economic pressure to run theirvending business. They decided voluntarily to utilize their abilitiesto earn extra income for household use or saving. Consequently,they received direct assistance from their husbands and childrenin such areas as preparation of sales products, selling over theweekend and childcare. They also receive indirect support in termsof no objection or embarrassment from running a vending businessexpressed by husbands and children.

Performance of street vending business

Analysis of performance of street vending businesses depends onrespondent evaluations of profitability, which are difficult to verify.

Subsistence business

Being self-employed, street vendors can make their own deci-sions about their businesses, including risk-taking management,so it empowers them to be independent not only financially butalso occupationally. It is a legal occupation. Old generation of streetvendors works hard and owns their business, even though it maybe at the micro-level and make only marginal revenue. Since theyearn little, they spend little as well. Importantly, they have to beself-disciplined in working hard and avoiding gambling (an occu-pational hazard). In emergency situations, such as children or fam-ily members falling sick, without savings or (previously) muchsocial welfare, such people had to borrow money at high interestrates from moneylenders. These debts are very hard to repayand, therefore, they are drawn into a vicious cycle of poverty.

Future business plan

Whereas more old generation of vendors entered their tradewith the expectation that it would be a long-term occupation, per-haps a permanent one, the new generations of street vendors havea more pragmatic approach. Some began the work to make up forthe loss of a job in 1997 and intended to return to formal employ-ment whenever possible, while others see it as a supplementaryoccupation or a temporary expedient. Some make semi-formal ca-reer plans in which they calculate profit and loss margins anddetermine their deadlines for achieving certain levels of income,after which they find themselves empowered to return to a moresettled occupation, perhaps returning to hometowns left someyears previously.

Economic and business multiplier effects

Many of the new generation of street vendors who run sophis-ticated businesses, such as franchising of food and drinks, develop


their own brand-names and organize production through factoriesfor hire, while running multiple pitches in different locations tomake their business a source of significant employment for theirsubcontractors, franchisees and employees, including their familymembers, in a range of up to 10–200 workers. These businessesgenerate indirect jobs for supplying companies, transportationcompanies and courier companies. The multiplier effect of thesebusinesses is significant for the economy of Bangkok, as it is forother cities.

Obstacles and barriers

Vending pitches

The BMA has relaxed enforcement by allowing street vendors intwo areas; (i) 287 designated areas, and (ii) 76 temporary or non-designated areas around Bangkok (Nirathron, 2006). The supply ofvending pitches seems sufficient for the 16,000 registered streetvendors in 2007. However, the high traffic of customers makesthese locations profitable for street vendors, despite the costs. Onlysome locations are in demand. In authorized areas, street vendorspay monthly official fees, business tax and penalty fees to the req-uisite district office of the BMA in the range of US$9–30 in order tosecure and protect the legal status of the pitch and ensure cleanvending areas. Research reveals the rental cost of private pitchesin bazaars to be in the range of US$294–588 a month. Apart fromofficial fees for authorized pitches, street vendors also have topay informal transaction fees for permission from other street ven-dors in prime vending areas such as the wholesale market of BoBae. This informal transaction fee for permission is not an officialfee payable to the district office of BMA or any government agencybut is instead a payment required by the former owner of thatpitch. The fee can be extraordinarily high, ranging fromUS$1470–11,764. Owing to limited land available, the private pitcharea of a bazaar is relatively small, about 200–400 sq. m. with facil-ities such as shelter, electricity and rest room. The legal pitch orauthorized pitch provided by the BMA is worse since it had neitherfacilities nor shelter.

Official harassment is generally predicated on the administeringof regulations and the collection of fees for services, as well as theeffort to ensure that vendors do not encroach on areas where theyhave been designated as unwelcome. Many old generation of ven-dors have reported that, when they wished to register their pitchesat the relevant District Office, they have been asked to make addi-tional payments or ‘tea money’ of up to US$1515, for which no offi-cial receipts are provided. Vendors also report that they have beenvictimized by the police if their customers (or just visitors to thearea) contravene parking regulations. Owing to flexible and flexiblyapplied rules and regulations, there are gaps in enforcement whichleads to the corruption of BMA police officers and hence theirharassment of street vendors. In addition, mafia in the street ven-dor business areas force them to pay for protection or illegal rent.Attempts by the BMA to change business operations at the Bo BaeMarket, a well-known wholesale clothes market area, have beenmet with determined opposition from the vendors themselvesand their supporters. Violence has been used on occasions againstthe vendors, mounted by unknown attackers and intended to drivethem away from their pitches. Again, the vendors have demon-strated solidarity in resisting the violence in whatever form it ar-rives such as demonstrations outside city hall and blocking partsof the busy nearby Krung Kasem Road, when 23 vendors were ar-rested (The Nation, 2006).

The new generation of vendors decides to rent their expensivepitches from private owners in order to avoid incidences of corrup-tion. Even though some vendors experienced requests and threatsfrom corrupt district officials and mafia, they can afford to pay tea




money but refuse to do so. Regarding street vendors’ protests, vio-lence and street riots, many new generation of vendors do not sup-port them because they fear that the negative image of streetvending causes business decline.

Attitudes to vending

Bangkok policy-makers do not always recognize this importantrole and its contributions and linkages. For example, the prosecu-tion of street vendors in Bo Bae in 2006 caused hundreds or thou-sands of direct and indirect workers in supplying companies, truckcompanies and packaging companies to become unemployed.Their children had to leave school and help their parents earn a liv-ing. An interview with an executive of BMA in 2008 shows an igno-rance of the causative impacts of the prosecution of street vendors.‘‘These vendors are rich and have business experience so they canchange to other suitable business. Why should we allow them to runtheir business on unauthorized pitches?’’ In fact, an interview withstreet vendors in 2007–2008 provides another perspective: ‘‘It tookus so many years to learn and to be able to run the business withoutany government support. We do it as a family-oriented business and itis impossible to become rich from such a business. It is a business forliving. We are creating legal occupations for thousands of peoplearound Thailand. Because of unclear and unexpected prosecution inBo Bae wholesale market, we are losing not thousands but millionsof dollars. We almost went bankrupt and we can’t pay the loan forour business so how can we survive without this business and howcan we start our business again from scratch? If our business collapses,it will be not only me and my family but also thousands of other peoplewill become unemployed and face a crisis. I don’t understand why thegovernment policy punishes legal business people like us.’’ The BMAmight have a better chance to convince street vendors of the valid-ity of their actions if they were better able to enunciate their visionand demonstrate the extension of the rule of law to covereverybody.

Financial resources

Since the capital investment of street vendors is marginal andthere is some business uncertainty for both mobile and fixed ven-dors, especially since the legal status of their business space issubject to often unpredictable BMA policy change, it is very rarefor these street vendors to be able to access formal financial insti-tutions. Even though the new generation of vendors who rentfixed private pitches in bazaars or in business district areas havedecent sales, their creditability seems limited. As a result, as ob-served by the Friedrich Naumann Foundation (2007), this studyalso found that vendors experienced considerable difficulties inrequesting and receiving bank loans to allow their businesses toexpand.

The Government Saving Bank has established flexible require-ments for street vendors since 2001 by specifying that creditgroups can act as collateral. Only a few of the surveyed old gener-ation requested and received small soft loans, with an average ofUS$294–588. This was useful for capital flow only in certain peri-ods. However, they would prefer to have much bigger loans forbusiness expansion or for better flow of capital. In addition, manyold generation of entrepreneurs did not request a loan becausethey could not establish a reliable credit group. Informal creditors,relatives and friends are still a major financial source.

Conclusion and policy implications

To a certain extent and for a limited set of people, street vendingis becoming lucrative and a choice of occupation for the educatedmiddle class and not only a poverty avoidance occupation for the


poor. Many vendors are full-time vendors who run their businessesin many areas or pay high rent cost for private pitches in strategicbusiness locations in Bangkok. Street vending is not a ‘‘dead-end’’occupation but encourages some of the vendors to gain sufficientexperience to become entrepreneurs. Some flexibility in terms ofadditional low level financing might help some of these vendingbusinesses to expand and provide employment opportunities inlong term to be micro-businesses. As a result, we believe that cityplanners should consider street vending as an entirely separatesector of its own and should be regarded as a viable part of theeconomy which is not transitional but an important part of the ur-ban economy of an industrializing nation such as Thailand. Impor-tantly, the current policy on street vending business needs torecognize the new generation of vendors and provides access to di-verse financial and technical support for this new group; the exist-ing financial resource can benefit only the old generation of streetvendors and only small and medium sized businesses are eligiblefor commercial banks schemes. Without such assistance, a poten-tially flourishing niche activity could be suffocated in itsadolescence.

Given available alternatives, street vendors contribute to theILO’s campaign for decent work for all, but the abuses allegedto have been perpetrated by public officials, police officersand criminal gangs are undermining those efforts, especiallythe old generation of street vendors. These poor, with limitedbusiness capacity and resources, operates at lower, or lowest,levels of the retail hierarchy. Their level of income is normallyat, or close to, subsistence level. Previous policies on temporarydesignated areas for street vending businesses and informal reg-istration of BMA districts, including a recent policy on socialsecurity focusing on health care and soft loans for the informalsector but do not legitimize the status of street vendors. Theold generation of street vendors is seen as illegal business peo-ple occupying public space. A more serious commitment to therule of law and legal registration would prevent many of theabuses of innocent working people that have been documentedin this paper.

The area of collision between public space and private businessoperation, especially for the new generation of street vendors rep-resents a potentially fertile area of further investigation. Public pol-icy-making such as tax incentives or recognitions for social andcorporate responsibility is concerned with the area of resourceallocation and the efficiency of space, while business operatorsconsider access to customers, establishing relationships with net-work partners and maximizing revenue.

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a new generation of bangkok street vendors: economic crisis as opportunity and threat

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