Dharavi’s grimy canvas caught the attention of world-renowned economist Hernando De Soto, who visited the various informal production units in the slum on Thursday.
The Peruvian economist is in the city to attend a conference, organised by Ficci, to address the issue of integrating the informal sector into the formal economy with an objective to develop an ‘inclusive’ market economy in India.
Observing the small informal agglomerations, De Soto ventured along Dharavi’s dingy lanes and open drains to get a firsthand experience of the Asia’s largest slum. “Dharavi is a swamp being converted into development. There is another swamp in Washington DC. While this place has Indian characteristics, the similar phenomenon to what you see in the developed countries is striking,” De Soto said. He added that there should be legal empowerment of entrepreneurs among the poor.
While in Dharavi, De Sotto chatted with workers at units recycling soaps, cardboards, potters and women making Lijjat papad and farsan. “I see an early stage of industrialisation here. However, this place lacks the way to capture surplus value. They are still not a globalised society. This could be something good if you gave it the legal infrastructure,” he said.
Commenting on the jewellery and silver units, De Soto said that Indians had a tendency to accumulate jewellery whereas westerners would not invest over 10% in precious metals.
“Dharavi is trapped in a glass jar phenomenon. At one end you have India’s financial capital and at the other, a huge industrious potential lying with the poorest inhabitants of Mumbai,” he said. “It’s a mystery and the only way out is to believe in the potential here and break the glass jar.”
