Researchers in Economic and Management Sciences
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Browsing by Author "Charman, Andrew"
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Item Enforced informalisation: the case of liquor retailers in South Africa(Taylor & Francis, 2013) Charman, Andrew; Petersen, Leif; Piper, LaurenceAfter a decade of unsuccessful efforts to migrate informal businesses to South Africa’s formal economy there remains little understanding of the dynamics in this sector, especially as regards micro-enterprises. International literature discusses ‘exit’ and ‘exclusion’, holding that poor law enforcement is the reason for the persistence and growth of the informal economy. Through examining the informal liquor retail (“shebeen”) sector, we demonstrate that enforcement actually produces informality in this sector. Illustrated with examples from one of our sites in Delft South, Cape Town, the article describes key aspects of shebeen business practice, including the responses to greater law enforcement. Notably, instead of closing shop or facing the hurdles of compliance, the great majority of shebeens continue to evade the law by downscaling their activities. This finding has implications, not just for liquor policy in South Africa, but for understanding both theories of formalisation and theories of the informal economy.Item From local survivalism to foreign entrepreneurship: the transformation of the spaza sector in Delft, Cape Town(University of KwaZulu-Natal, 2012) Charman, Andrew; Petersen, Leif; Piper, LaurenceSmall, home-based grocery stores, known as spaza shops, are ubiquitous throughout the township areas of urban South Africa, constituting an important business in the informal economy. In recent years, this retail market has become a site of fierce competition between South African shopkeepers and foreign entrepreneurs, especially Somalis, and is often cited in the media as one reason behind the xenophobic attacks on foreigners. Drawing on original data collected in the Delft township in the city of Cape Town, this paper demonstrates that foreign entrepreneurs, overwhelmingly Somalis, have come to own around half of the sizeable spaza market in Delft in the last five years. This increase is attributable to larger scale and price competitive behaviour as these entrepreneurs operate collectively in terms of buying shops, and stock, as well as in stock distribution. Also important are some more customer friendly services too. Compared to the more 'survivalist' local business model where individual owners look to supplement existing household income rather than generate an entire livelihood, the Somali business model has rapidly outcompeted local owners, bringing spaza prices down and forcing many locals to rent out their shop space to foreign shopkeepers. Consequently, while South African shopkeepers resent the Somali influx, most consumers appreciate the better prices and improved service. The rise of Somali shopkeepers thus represents a transformation of business practice in the spaza sector from survivalist to entrepreneurial modesItem Xenophobia, criminality and violent entrepreneurship: violence against Somali shopkeepers in Delft South, Cape Town, South Africa(Taylor & Francis; Unisa Press, 2012) Piper, Laurence; Charman, AndrewViolence against Somali shopkeepers is often cited as evidence of xenophobic attitudes and violence in South Africa. However, as argued in this article, it is not necessarily the case that such violence is driven by anti-foreigner sentiment. Instead, as illustrated in the case of Delft, a poor, mixed-race area in the City of Cape Town, violence against spaza shopkeepers may also be explained in terms of criminal activities and economic competition in the form of ‘violent entrepreneurship’. This argument is made drawing on a survey of over 100 spaza shopkeepers, a household survey, police statistics, and interviews and focus groups with key stakeholders living in Delft. The key insight is that despite a recent history of intense economic competition in the spaza market in which foreign skopkeepers have come to dominate, levels of violent crime against foreign shopkeepers, 80 per cent of whom are Somali, are not significantly higher than against South African shopkeepers. In addition, while South African shopkeepers openly resent the Somali advent, most consumers remain indifferent to their presence and certainly prefer the lower prices. While our findings cannot be generalised beyond this case, they do alert us to the importance of locating arguments about xenophobia in the wider context of crime and violence in South Africa, as well as paying close attention to the local particularities that can turn general sentiment into xenophobic action.