Across the developing world, enterprising people are sifting through garbage bins to build small businesses through recycling. It is in the informal economy, yet they have developed an economic system. This 鈥渨aste economy鈥� is providing new opportunities for people like Vusi Memela. He heads out at 2 a.m. seeking a paycheck by beating the formal economy鈥搕he garbage trucks鈥搕o the Johannesburg streets. South Africa鈥檚 largest city offers little in the way of formal recycling, so Vusi fills the gap, turning plastic bottles, electronics, paper and packaging into an income generated from the proceeds of the sale. The waste economy gives him a job and a life and the possibility to dream of a better future.
Vusi and others across the continent are worthy of capital investment, and yet we have not looked closely at what they are adding to society. Most of our time and money is directed toward agriculture, light manufacturing and industrialization. In the meantime, our inability to absorb youth into productive activity puts communities at risk of crime and terrorism. In Africa, where services account for 60% of economic output, we have an opportunity to diversify the economy by investing in these informal workers.
Entrepreneurial hope for waste
Rubbish has real economic value estimated to rise from $205 billion to $375 billion by 2025. The expected 70% global increase in urban waste will result in developing countries facing one of the greatest challenges. If they do not find a way to deal with waste, it will mean accepting that current and future generations will suffer severe health and environmental consequences. It will be a missed opportunity.
We have failed to recognize that informal entrepreneurs are essential to ensuring that fragile states can withstand economic shocks. They adapt and constantly seek new ways to make ends meet. The World Bank has said we鈥檙e no longer distinguishing between 鈥渄eveloping鈥� and 鈥渄eveloped鈥� countries as we enter the Sustainable Development Goals era. But fragile states that are vulnerable to economic shocks remain. Luckily the people living in those places are more resilient than they may appear and are pushing back against poverty every day. We can help them if we invest in these creative entrepreneurs. As such, providing aid tailored to their business could be far more effective in leveraging their initial investment. Recognizing and investing in them is not the silver bullet, but does represent a local and sustainable way to build the broader economy.
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