Footpaths, livelihoods and the limits driving out hawkers

Zahir sells wallets on the pavement in front of the City Corporation Market in Nilkhet. While keeping a lookout for the police, he spoke to The Business Standard.  

"The raids have been ongoing since 5 April. Yesterday was particularly strict; I couldn't set up shop at all. There have already been two raids this morning. I've only just opened now, in the afternoon. If the police catch us, they will fine us Tk5,000-10,000. I open up with a constant sense of fear and shut down the moment I spot them. I'm only keeping the stall going to try and cover my costs," he says.

A walk along the pavement tells its own story; nearly half of the temporary stalls are shuttered. 

Tanveer, standing in front of a closed footwear stall, offers a matter-of-fact assessment, "As soon as the eviction drive ends, we set up again immediately. I've only closed the shop temporarily because of the raids."

Khalil, a hawker in front of New Market Gate 4, describes the daily routine in sharper terms, "We keep a lookout in every direction. The moment we hear the magistrate is coming, we pack everything up. We're essentially playing a game of cat and mouse with the authorities just to keep our business running."

This has been the reality of Dhaka's footpath economy since the Dhaka Metropolitan Police launched a coordinated drive to reclaim the city's footpaths from 1 April. Across Dhaka, mobile courts, magistrates and traffic officials fanned out to at least 50 locations, warning traders to remove encroachments or face fines, confiscation and even jail.

And this eviction has popular support as footpaths, clogged by makeshift stalls, force pedestrians onto already choked roads. Congestion worsens, accidents rise, and the city's fragile mobility system edges closer to collapse.

Yet beneath this enforcement push lies a deeper paradox. 

The very footpaths being "freed" are also the site of one of Bangladesh's largest, most dynamic — and least understood — economic systems. To treat it purely as an urban nuisance is to misunderstand its scale, its function, and its inevitability.

The invisible backbone of the economy

The footpath economy is the visible face of a much larger informal sector that dominates Bangladesh's labour market. Estimates from the International Labour Organisation and the Asian Development Bank suggest that nearly 89% of all jobs in the country are informal.

"Eviction is not a solution. Many of these vendors are climate-vulnerable individuals with no safety net. Before any eviction, the government must adopt a more compassionate and data-driven approach. Authorities should collect digital data and contact information on vendors to integrate them into structured relocation plans."  Mahtab Uddin, Assistant Professor, Department of Economics, Dhaka University

In Dhaka, that figure still hovers at over 78%. In absolute terms, nearly 60 million people depend on informal work nationwide. For women and youth, the dependence is even more stark, with informal employment rates exceeding 90%.

Street vending is at the centre of this ecosystem. In Dhaka alone, unofficial estimates place the number of vendors between 2.5 and 3 lakh. For many, it is the first and often only entry point into the urban economy. 

The barriers to entry are minimal. A few thousand taka can secure initial stock. A strategic corner can generate daily cash flow. No formal paperwork, no licensing, no regulatory friction except for some bribes. But that ease comes at a cost.

A prospective billion-dollar economy hiding in plain sight

Street vending is often dismissed as marginal.

According to the Bangladesh Bureau of Statistics, the broader informal sector contributes to 43% of the Bangladesh economy. Within this, the footpath economy represents a dense network of micro-transactions that keep the city functioning.

In high-traffic areas like Farmgate or Gulistan, daily turnover runs into millions of taka. Bangladesh Shop Owners Association (BSOA) showed that during festive periods such as Eid, sales volumes surge dramatically. Retail transactions ahead of Eid in 2026 exceeded Tk1.70 lakh crore, with a significant share flowing through informal channels.

At the individual level, earnings vary widely. Many hawkers survive on modest monthly incomes of Tk3,000 to Tk5,000. But prime locations can yield upwards of Tk20,000, especially for those managing multiple stalls.

Behind each vendor lies an extended supply chain — wholesalers, transporters, small-scale manufacturers, and even rural farmers who rely on these informal retail nodes to reach urban consumers. 

For over 60% of Dhaka's residents, these footpath markets are an essential spot to buy cheaper goods. 

The cost of chaos

And yet, the costs are undeniable. Dhaka Transport Coordination Authority (DTCA) estimated that nearly 60% of the city's footpaths are illegally occupied. The result is a daily contest between pedestrians and vehicles, often with fatal consequences. 

Traffic congestion, already endemic, is exacerbated by reduced road capacity. Dhaka's average traffic speed has fallen from over 21km/h in 2004 to below 6.4 km/h in recent years, according to research by transport planner and South Asia specialist Robert Gallagher. 

Brac Institute of Government and Development (BIGD) estimates that the economic loss from congestion alone is $11.4 billion annually, with an estimated 5 million working hours wasted daily.

Then there is the shadow economy operating within the footpath economy itself. Vendors rarely occupy space for free. 

Daily payments ranging from Tk100 to Tk300 are extracted by informal "linemen" and politically connected groups. In prime areas, "ownership" of a spot can be traded for Tk8-10 lakh, despite the land being public.

This parallel system not only distorts incomes but also deprives the state of potential revenue.

Eviction as theatre

For policymakers, the response has been cyclical. It is mostly periodic eviction drives followed by rapid reoccupation.

Maha Mirza, an economist and researcher, describes this pattern bluntly. 

"Evictions are often used to create a quick visual impression of order for the urban middle class. However, this is a delusional solution to a complex problem."

Her critique goes further. The rise of street vending, she argues, is not accidental but rooted in structural failures — deindustrialisation, factory closures, and the erosion of rural livelihoods.

"The surge in street hawkers and urban migration is a direct consequence of the systemic collapse of formal employment over the last decade," she notes.

From shuttered jute mills to mechanised garment factories, the traditional absorbers of labour have steadily weakened. The result is a steady flow of workers into Dhaka, where survival often means claiming a slice of pavement.

The 'frictionless' trap

For Mahtab Uddin, assistant professor at the Department of Economics at the University of Dhaka and research director at the South Asian Network on Economic Modeling (SANEM), the informal sector's greatest strength is also its greatest weakness.

"It is frictionless — one can start a small trade with as little as Tk1,000-2,000," he says. "This ease of entry, however, creates a massive economic cost."

That cost is not just in lost tax revenue or regulatory oversight. It is also in terms of lost productivity.

"In a city like Dhaka, where millions move daily, the proliferation of street vendors in hotspots contributes significantly to traffic congestion," Mahtab Uddin explains. "If congestion adds just one extra hour of travel time for 10 million commuters daily, we are losing millions of productive man-hours."

He explained how the footpath economy is both a solution to unemployment and a contributor to inefficiency.

Beyond bulldozers: Towards regulation

If eviction is not the answer, what is?

Experts increasingly argue for a shift from enforcement to management. Mahtab Uddin outlines a framework grounded in pragmatism and data. 

"Eviction is not a solution. Many of these vendors are climate-vulnerable individuals with no safety net. Before any eviction, the government must adopt a more compassionate and data-driven approach. Authorities should collect digital data and contact information on vendors to integrate them into structured relocation plans. 

"Following models in Bangkok or Malaysia, the government should lease vacant buildings or open spaces in urban hotspots. These should operate as 'Open Markets' where vendors can rent a spot via daily or weekly tickets, eliminating the need for permanent shops," Mahtab adds.

Cities across Asia have grappled with similar challenges.

In Bangkok and parts of Malaysia, regulated street markets operate within designated zones and time windows. Vendors are licensed, spaces are demarcated, and enforcement is predictable rather than arbitrary. 

Singapore converted their Hawkers' Centres as cultural landmarks. 

India passed the Street Vendors Act of 2014, recognising vending as a fundamental right, the law aims to end arbitrary evictions through 'vending zones.' 

In China, cities like Shanghai and Chengdu have designated specific areas and times where people can set up stalls, turning what was once 'illegal' into a state-supported tourist attraction.

Dhaka has experimented with such models on a limited scale in Mirpur 10, but these remain exceptions rather than the rule.

Part of a bigger problem? 

Ultimately, the footpath economy cannot be addressed in isolation.

As Mahtab Uddin points out, Bangladesh adds nearly 2 million new job seekers each year, alongside millions of climate-induced migrants. Without a diversified industrial base, the formal sector simply cannot absorb this influx.

"While temporary urban management is necessary, it is not a long-term fix," he warns. "The only sustainable solution is aggressive, diversified industrialisation. We must look beyond RMG and dismantle the regulatory barriers stifling other sectors to provide the 2 million annual entrants with the formal, dignified employment they deserve." 

Maha Mirza echoes this, linking the problem to broader policy failures — from factory closures to agricultural distress.

"Until we see investment in the rural economy and a genuine plan for industrial job creation, the informal economy will remain the only survival mechanism for millions. Evicting them without a plan is not governance; it is a failure to acknowledge reality."