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Street Vendors and Merchants: Economies at War

May 31, 1990

MEXICO CITY (AP) _ First they shed their shoes and socks. Next came the shirts. Then the street vendors, more than 200 of them, removed their trousers.

They stood in their underwear outside the municipal assembly building to protest police harassment, their flabby bellies and calluses testifying to lifetimes of hard work and bad food. One woman was in the group.

″We wanted the authorities to reflect on what those naked bodies represented in terms of unemployment, health problems - of vulnerability,″ one of the leaders, Luciano Jimeno Huanosta, said after the strip-in.

It was a startling tactic in this conservative society, but the vendors were desperate. Before the protest in April, police responding to shopkeeper complaints had blocked their turf for days and the vendors couldn’t work.

More than five hours after the disrobing, city officials agreed to withdraw the police. The unconventional tactic worked, but was only one maneuver in an increasingly bitter conflict between Mexico’s formal and informal economies.

The war between shopkeepers and vendors is a symptom of a sick economy.

An estimated 40 percent of Mexican workers are unemployed or underemployed. A million new jobs a year are needed just to keep up with population growth.

For many, especially the very young and very old, there is no choice but making a living on the streets.

″If they want to get vendors off the streets, they have to create jobs,″ said Federico Garcia Hernandez, 29, a second-generation street salesman.

Street vendors always have been part of Mexico, but their numbers have risen steadily since serious economic problems began in 1982.

The National Chamber of Commerce in Mexico City, which has done studies on the informal economy for three years, estimates the capital has 200,000 street vendors. If they keep increasing, it says, vendors will outnumber regular merchants in a few years.

The main field of battle is the heart of Mexico City, a 440-square-block labyrinth of commerce, colonial churches, Aztec ruins, cantinas and cafes known simply as El Centro.

You can buy anything in El Centro from a stuffed, two-headed calf to the dried, powdered, encapsulated skin of rattlesnakes to the latest VCR.

It has streets of shops that sell lingerie and lace, other streets that sell lights, spare parts, sporting goods, housewares.

You can buy from shops behind walls encrusted with layers of handbills or on curbsides so old they are worn down to street level.

It’s cheaper on the street.

″On foreign goods, they can undercut us by almost 50 percent,″ said shopkeeper Alberto Gaona. ″They don’t pay the 20 percent import tax and they don’t pay the 15 percent value added tax. And I’d estimate that 70 to 85 percent of their goods are foreign.″

The shopkeepers, who must pay utility bills, rent, salaries and taxes, say the vendors are driving them out of business.

″We have dead zones now, areas where all the merchants have shut down,″ said Guillermo Gazal Jafif, founder of Procentrico, a group of downtown merchants. ″It’s a direct attack on the formal economy.″

Procentrico estimates 30,000 street salesmen are competing in El Centro with 12,000 established merchants. Merchants have pestered city hall for more than a year to evict the vendors who clog the area’s narrow streets.

The vendors have resisted with demonstrations, sit-ins, petitions and the now-famous disrobing.

There have been vague promises that the dispute would be resolved, but no action other than sporadic police sweeps against vendors.

Both vendors and merchants agree on the reasons for inaction: Street vendors are a lucrative source of bribes and payoffs, and part of the political machinery of the governing Institutional Revolutionary Party, known as the PRI.

An elaborate system of payoffs is run by leaders of vendor unions.

More than 50 such unions are said to operate in El Centro alone. All but a few are formally affiliated with the PRI, the Chamber of Commerce says, and the occasional crackdowns are almost always on independents.

Vendors and merchants say the minimum payment by a vendor is 10,000 pesos a day, about $3, which buys a piece of turf free of harassment by policemen or competitors. The union leader keeps part of the money and uses the rest for bribes.

The acknowledged queenpin of the PRI-affiliated vendors is a hefty woman named Guillermina Rico, who can muster as many as 18,000 vendors for party rallies and is said to have a Swiss bank account.

Mrs. Rico, 54, operates from a warehouse crammed with video recorders and other electronics behind an anonymous iron door at the teeming La Merced market. The walls are hung with photos of her with presidents and mayors and other party luminaries.

The Chamber of Commerce says union leaders collected an estimated 2.2 billion pesos in payoffs in 1988, about $1 million at the prevailing exchange rate.

It has proposed dismantling the system and using the money to build markets where the vendors could set up shop. Procentrico also favors building markets.

″The vendors exist because of a deteriorating economy, official corruption and politics,″ said Sergio Rios Lara, one of Procentrico’s directors.

″Things can’t continue like this. Mexico is in a era of change. Things can’t keep working like they used to.″

End Adv PMs Thursday May 31

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