From the outside, low-income settlements look primarily like residential areas, row upon row of corrugated iron shacks squeezed tightly together on top of poorly-serviced land. It is near impossible, however, to find a low-income settlement that is entirely residential, with even the smallest of settlements having a few tea shops and grocery stalls to serve the local residents. A deeper investigation into employment among the urban poor in four low-income settlements of Dhaka, however, revealed the number and variety of businesses and enterprises through which people forge their livelihoods and struggle to improve their households. Here I take a brief look at some of the entrepreneurs and their businesses that I came across during my fieldwork.
The more expected businesses to come across in urban poor communities are the stalls and shops serving the communities with all their daily needs. The size and variety of market shops in Karail, the biggest low-income settlement in Dhaka, was surprising, however. A huge and bustling market lies at the centre of the settlement, selling not only fresh and dry foods, flours and rice, but also saris and lungis, jewellery, make-up, and even some electronics goods. Even amongst the more residential sections of the settlement, housing is interspersed with tea stalls and grocery shops and shops selling firewood, and in some busy areas this stretches to pharmacies, tailors, rickshaw garages, restaurants, and more.
(Rhuma, another of our respondents, sits in her tailor’s shop, through which she supports her family. Her husband is ill and unable to work regularly, so she is the main-income earner in her household)
(Saddam Hussein (yes, really!) stands beside the cows which provide the household income. His father bought these loans with an initial NGO loan, which is now fully repaid. Now they are earning a good monthly income from these cows)
Unfortunately these success stories do not extend to all, however. The majority of poor households cannot save the capital required to start-up and run a small business. In other cases, rising costs were destroying people’s business prospects. Walking into one room we saw an elderly man crouched over a wooden slab making tiny sandals. Abdul Rashid has made children’s sandals for the last 9 years. He used to be able to support his household through this enterprise, but now he can only manage around 1,000 taka (around $15) a month and must rely on the incomes from other household members. Recent price increases have been devastating to his business, with all of his raw materials – brightly coloured plastic, glue, cardboard and plastic piping -having more than doubled. Meanwhile, he is unable to increase the price of a finished pair of sandals as this would make them unaffordable to the income of his customers – poor urban residents whose incomes have also been squeezed by price increases in household essentials.
What lessons can we learn from both these successes and obstacles faced by businesses run by the urban poor? While I have focused here on small businesses, my wider research has also focused on two other main employment categories, namely unskilled labour and formal sector jobs. In all categories you can find households who have been able to improve their household situation through the income generated by this employment, and those who have not. It is only by trying to understand the ways in which poor urban citizens make their livings, and the barriers that they face to improving their household situation, that development interventions can start to help turn more of these livelihoods into success stories.