Saigon with the sidewalk economy
VietNamNet Bridge – Being considered as the "promised land," Ho Chi Minh City is also facing many difficulties and complicated problems that come from the informal workers.

Immigration to the big cities such as Hanoi, Ho Chi Minh City and Da Nang has always played an important role and often caused controversy and mixed opinions.

For Ho Chi Minh City, immigration has partly contributed to make the face of the land of 10 million people. An overview of the history of immigration, the characteristics, and its social impacts on HCM City will be useful to establish the basis for the immigration policy.

VietNamNet Bridge would like introduce an article by Dr. Nguyen Thi Hau, Deputy Director of the Institute of HCM City Development Studies about the issue.

Because of the process of urbanization and industrialization, agricultural land is being narrowed and the employment pressure on rural workers is increasing. As a result, more rural people migrate to urban areas. The people who do not have capital, are not vocationally trained are unable to seek a job, even simple jobs at export processing zones and industrial parks (IPs and EPZs), then they have no choice of becoming informal workers in many economic sectors.

Vietnam's major economy in general and the Mekong Delta economy in particular are agriculture. With the basic characteristics of seasonal time structure, the leisure after harvest time is the time the farmers take advantage to earn extra income from off-farm economic activities. Going to the city to get an extra job is quite common.

Along with land acquisition or being converted to other purposes, it is able to say that farmers are the "potential" force of informal labor in urban areas.


In Saigon - Ho Chi Minh City, informal labor is an objective fact that has existed right from when the city was formed, and it has been growing strongly and diversely due to the intrinsic needs of urban life.

During the medieval urban time, economic sectors virtually did not have the distinction between "official" and "unofficial," but since the formation of the urban areas in the modern times, at the end of the nineteenth century in Sai Gon, formed and separated the two sectors.

The establishment of factories, offices, service establishments such as hospitals, schools, etc. in the French-ruled period in Saigon was not much but it was enough to form a social class - "employees", who work under the "administrative laws" on the working time and many other factors. It can be considered as the formation of the class of "urban" residents, who live in urban areas and do urban jobs, who have urban-resident lifestyle that is different from other laborers in the city.

The "formal economy" sector is concentrated in the administrative center - District 1, District 3 at present. The remaining areas of Saigon-Cholon were the places for commercial and service development. The Gia Dinh area was mainly for agricultural activities. The "non-official" economic sector surrounded the "formal economy" sector, which was the kernel of the city, the "core" of architectural planning. This characteristic was maintained throughout the urban development of Saigon from the late nineteenth century to the second half of the twentieth century.

Saigon also experienced a long wartime. Different from Hanoi (during the war, workers in the formal sector - the state-owned sector - evacuated to the countryside and only returned to the city when peace was resumed. Meanwhile, workers in the non-official sector were not forced out of town), Saigon was the place where people in many rural areas from the Central region and the Mekong Delta flocked to.

Almost not being trained, having no or little capital, they joined the informal labor force, doing the jobs such as small retailers, vendors, services, manual labor, transporting cargos by preliminary vehicles, etc. Their work areas are mainly "outdoors," which include roadsides, building sites, markets, etc.

After 1975, part of the people came back home while another part moved to the new economic zones in the Central Highlands, the formal sector was narrowed. The city’s economic structure remained only one economic sector and those who worked in the non-state economic sector became "non-official" workers.

When the national economy fell into the hard times before the “Doi Moi” (renovation) period and especially since the late 1990s until now, the process of industrialization and urbanization has took place strongly, the city has become a "hollow" where tolerates the influx of people from other provinces to make a living, many of them engaged in the form of "sidewalk economy."

The informal economic sector has kept expanding in the city, which is diversity in the type, forms of operation and its contribution to the urban life and economic development is increasing. However many urban dwellers still despise, pity immigrants, street vendors and street children. They even consider them as the main cause for the city’s “uncivilized lifestyle.”

The people who come from the countryside or those who have not lived in the city for a long time are referred to as "immigrants." Over time they will become or participate in the class of "urban poor people."

These people often live in the suburban districts or in deep alleys in the urban districts. They are not vocationally trained and do not have access to vocational training opportunities so most of them have to accept poor working conditions, low income, no be entitled to the rights and obligations of labor, social welfare, public services ...

Especially the number of women involving in this sector is quite large, who are venders, workers in industrial parks and export processing zones, charladies to waitresses in restaurants, building workers to motorbike taxi drivers. Female workers carry a “natural” responsibility: always scarifying themselves and suffer from disadvantage because of their families.

As well as the whole country, Ho Chi Minh City has a lot of activities and organizations to assist free labor, street children, and migrants. However, the size and activities of these organizations have not really created a closer, timely access to these subjects and more importantly, they have not yet enticed them to join the assistance activity.

The majority of informal workers do not know how to use the support of social organizations. They remain passive in protecting themselves. With the contribution of non-formal labor to society and the economy today, the recognition of their position, their social roles and facilitating their enjoyment of public services is urgently needed.

Sidewalk economy

Ho Chi Minh City developed from Saigon-Ben Nghe urban area. It was then connected with other centers as Cho Lon and Gia Dinh. The urbanization rate of Saigon - Ho Chi Minh City in any historical period was always very fast. However, it is needed to recognize that the state’s current planning does not keep pace with the development of the city, the spontaneous building activities because people do not have high awareness in compliance with state planning. The arbitrary development of residential areas mixed with commercial and production areas is very clear.

We can use the phrase "village in the city" to visualize the nature of many new residential areas. This is a convenient area for the development of non-formal labor: from doing trade at temporary or mobile markets to a "sidewalk economy." As the management mechanism is inappropriate, the "sidewalk economy" partly makes the city even sleazier.

The use of sidewalks and roads to do business also comes from the poor awareness of the people. Many people in the city think that the pavement and the road belong to the landlord of the street facing houses. And to have a small space on the sidewalk in front of these houses, traders have to pay monthly rent to the landlord.

In fact, the most common non-official economic form in Ho Chi Minh City is trading on the sidewalk and this form has quickly met the needs of buying and selling cheap goods quickly and conveniently. And this is also a favorable condition for economic activities on the sidewalks to arise and exist.

Along with that the “Front Culture" has becomes a new feature of Vietnam’s urban areas, from big cities to outback towns.

This habit leads to several implications: First, planning and architecture management of frontage roads becomes difficult. Second, the new highways cannot facilitate vehicles running at high speed because it is very dangerous as the people reside along the roads; Third, sidewalk business and personal vehicles have a close relationship of "supply and demand", which causes traffic congestion.

In big cities such as Hanoi and Ho Chi Minh City, if public transport develops, the demand for "fast purchase" will move to transport hubs such as parking lots, bus stations, and subway stations. This means that shopping and service centers will be set up there.

However, while waiting for that development, how do cities limit the negative aspects of the "sidewalk economy?" They should organize specialized streets for maintaining and developing the sidewalk economy and turning them into tourist destinations.

On the other hand, it is very clear that the sidewalk economy is still compliant with consumer habits, utility, affordability of the majority of people in the city. It is also considered the effective livelihoods of many poor households.

Ho Chi Minh City and many cities and urban areas in Vietnam are building a modern and civilized lifestyle. In this issue, the management and coordination role of the state is key.

Nguyen Thi Hau
Vietnam, HCM city, economy, sidewalk economy, private sector, immigrants