Nearly a billion people worldwide live in slums. Hanna Ingber Win visits Dharavi in Mumbai, one of the world’s largest slums – and a functioning economy that exports goods all over the world
Published in The Times of London July 25, 2011
From a distance, a slum’s haphazard collection of huts piled on top of one another, corrugated metal roofs and makeshift windows looks like a disaster in the making.
And yet, step inside and the picture changes dramatically. Many slums in the developing world, in particular Mumbai’s famous Dharavi, are hives of productivity and ingenuity.
Walk down one of Dharavi’s main thoroughfares or through the zigzagging lanes, and one finds snack shops, restaurants, tailors, bakeries, welders and barbers. In an area called Kumbharwada smoke billows forth from brick kilns as men sit on the floors of their adjacent homes sculpting clay pots on a wheel. In another area, a woman squats in front of a deafening chilli pepper grinder as a boy sits across the lane selling watermelon by the slice. Dharavi swarms with the activity of business.
As the world undergoes rapid urbanisation, more and more people are moving to cities to find work and then – unable to afford proper apartments or houses – creating temporary homes nearby.
As the slums grow, it is time policy makers and urban planners view them more accurately, says Aneerudha Paul, the director of the Kamla Raheja Vidyanidhi Institute of Architecture and Environmental Studies in Mumbai.
A slum such as Dharavi, one of the world’s largest, is not merely a residential area for Mumbai’s poor and downtrodden. Dharavi has a well-established, complex economy and in some ways operates like its own nation state.
Dharavi imports items such as food staples and raw materials, and it exports small-scale, labour-intensive manufacturing like the assembly work of cheap sunglasses. Its massive population – estimated between 700,000 to 1 million people – also becomes a market for goods and services produced there.
What stands out most about Dharavi’s economy is the high level of entrepreneurialism among its residents. Poor people who move into a city like Mumbai do not have the ability to fall back on the state if they cannot find a job. Instead, they must find a way to make do. They might start by selling bananas and eventually open their own shop. The area has more than 5,000 informal businesses, according to a report by the Harvard Business School.
Dharavi’s economic scale has enabled it to become both a producer and consumer of goods, according to Vinod Shetty, the director of the ACORN Foundation India. Businesses within Dharavi serve the population food, goods and even entertainment services. One afternoon, a group of young men gathered on wooden benches in a one-room theatre to watch a Tamil movie.
The nature of a slum like Dharavi also enables entrepreneurs and small businesses to operate with low costs. Many work out of their homes, keeping rent costs down. The congestion enables businesses to sell in volume plus have a constant supply of both skilled and unskilled labourers. Employers avoid the time-consuming bureaucracy involved in setting up formal businesses in India.
However, an informal economy also has drawbacks. Government services like sanitation are rare. Businesses regularly flout labour, environmental and safety regulations. Employers often do not provide safety gear, and employees have no recourse for compensation. Furthermore, informal businesses cannot get bank loans and therefore must rely on expensive moneylenders.
In countries without safety nets or enough formal jobs, slums like Dharavi have become places the poor rely on for housing, services and – most importantly – work.