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 41. Thus, while any poor people may not be officially employed. most are working – in unregistered factories and construction firms, selling goods on street corners, making clothes in their homes, or as servants or guards in better-off neiqhbourhoods. Most of the so-called unemployed are in fact working 10-15 hours a day, six to seven days a week. Their problem is not so much underemployment as underpayment.

42. Most house building, maintenance, or upgrading in the cities of developing countries is done outside official plans and usually in illegal settlements. This process mobilizes untapped resources, contributes to capital formation, and stimulates employment. These informal-sector builders represent an important source of urban employment, in particular for low and unskilled labour. They are not capital-or technology-intensive, they are not energy-intensive, and as a rule they do not impose a drain on foreign exchange. In their way, they contribute their share to attaining some of the nation's major development objectives. Moreover, they are flexible in responding to local needs and demands, catering in particular to poorer households, which usually have nowhere else to turn. Many governments have begun to see the wisdom of tolerating rather than quashing their work. Large-scale bulldozing of squatter communities is now rarer, although it still happens.

43. Governments should give more support to the informal sector, recognizing its vital functions im urban development. Some governments have done so, facilitating loans and credit to small entrepreneurs. building cooperatives, and neighbourhood improvement associations. Providing tenure to those living in illegal settlements is basic to this process, as is easing some building and housing regulations.

44. Multilateral and bilateral development assistance agencies should follow suit, and some are beginning to do so. Non-governmental and private voluntary, organizations are springing up in many countries to provide cost-effective channels for assistance, ensuring that it gets to those who can use it. A much larger proportion of assistance could be channelled directly through these organizations.

45. The above measures would also reinforce self-reliance and local governance by the poor in their own neiqhbourhood associations. Left to their own devices, the poor in many Third World cities have organized to fill gaps in services left by the local government. Among other things, community groups mobilize and organize fund-raising or mutual self-help to deal with security, environmental, and health problems within the immediate area.

46. Governments should move from a position of neutrality or antagonism to active support for such efforts. A few have actually institutionalized such programmes so that public ministries or agencies work continuously with community organizations. In the Indian city of Hyderabad, for example an Urban Community Development Department set up by the municipal corporation works directly with community groups and /…