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"This article is focused and the effect of economic development, especially urban development, upon informal activities and urban poor. The gist of this article is that although an impressive record of economic growth had been achieved during PJP I (the first long term development strategy), the urban informal activities and urban poor still seamed to experiences the same problems. Partly these as a result of the development implemented tend to be concentrated in urban areas of Java, especially around the primate city of Jakarta. This inequality of development not only affected the performance of development activities but has also hindered the spread of employment opportunities to other areas, both rural and urban. Consequently, most of the urban labour forces have forced to remain involved in the informal activities and therefore keep them stay in the poor conditions."

" This paper defines the informal sector (IS) as being self employedpersons assisted by family and other non-wage earners. It discusses sometheoretical aspects of the urban informal sector and presents some pertinentfindings in indonesia such as why persons enter the informal sector.relationships of the informal sector to itself and the formal sector (FS),factors affecting the competitiveness and potential of the informal sub-sectors. and the interpretation of a change in the size of the informal sectorrelative to the format sector. An analysis of Central Bureau of Statisticsdata shows that the rate of growth of the informal sector from 1985 to 1990was much tower than the formal sector and much lower than the informalsector from 1980 to 1985, with the construction and transportation sectorsbeing exceptions and the female informal sector growth rate being 39 % thatof males."

"This report is based on presentations of the third "International Workshop on Asia-Pacific Security" hosted by the National Institute for Defense Studies (NIDS). This workshop was held on January 17-18, 2012 ..."

"ABSTRAKSektor informal masih memiliki peranan yang besar dalam perekonomian Indonesia, serta memiliki hubungan yang erat sebagai pendorong perekonomian sebagaimana kurang lebih 45 persen output di Indonesia diproduksi oleh usaha-usaha sektor informal dan hampir 90 persennya merupakan lapangan pekerjaan bagi tenaga kerja di Indonesia. Kendati demikian, perhatian seringkali lebih ditekankan pada bagaimana cara membuat para pelaku sektor informal ini untuk berpindah menjadi formal alih-alih menargetkan secara langsung sektor informal tersebut untuk berbagai program pembangunan. Padahal, terdapat beberapa bukti empiris yang menemukan bahwa sektor informal di negara-negara berkembang seperti di Indonesia tidak mendukung model ekslusi exclusion model mdash;mereka ada karena pertimbangan rasional rrational exit model dan melayani pasar yang berbeda dengan sektor formal dual economy. Selain itu, kebijakan-kebijakan yang diterapkan seringkali tidak mengakumulasikan adanya heterogenitas dalam sektor informal yang meyebabkan implementasi kebijakan tidak tepat sasaran karena adanya perbedaan karakteristik. Penelitian ini mereplikasi peelitian yag dilakukan oleh Grimm, Knorringa, Lay 2012 di Afrika yang mencoba untuk membagi sektor informal di Indonesia menjadi tiga kelompok mdash;top performers, constrained gazelles, dan survivalists mdash;serta mencari tahu bagaimana heterogenitas sektor informal di Indonesia ini berpengaruh pada performa perusahaan yang diukur dari level profit perusahaan. Selain itu, penelitian ini juga melihat pengaruh dari heterogenitas pada keinginan pengusaha untuk mengembangkan usahanya melalui pinjaman dari lembaga keuangan formal seperti bank.

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ABSTRACTThe informal sector still plays a significant role in Indonesian economy, as well as associated with one of the growth factor as roughly 45 percent of total output is produced by informal Small and Micro Enterprises SMEs and more than 90 percent of them provide jobs for the labor force in Indonesia. However, many of the policy makers rsquo attention is placed on how to formalize these firms instead of targetting the informal sector directly for development programs, even though some evidences about the informal sector in dynamic developing countries like Indonesia say that their existence is more driven by the rational exit model and dual economy model instead of exclusion model. In other words, the informal sector exists toserve different market than that of formal sector, and their existence is a product of some rational cost benefit calculation. Moreover, the implemented policies, both policy about how to formalize these firms and financing policy for especially SMEs usually don rsquo t take into account the heterogeneity within the informal sector, which make such policies ineffective and inefficient due to diverse characteristics of groups in informal sector. This research tries to homogenize the informal sector in Indonesia into groups that are first introduced by Grimm, Knorringa, Lay 2012 which is the top performers, the constrained gazelles, and the survivalist, and also to further research whether the heterogeneity within Indonesian informal sector affects firms rsquo growths. This research also tries to see if heterogeneity, in any way, affects informal entrepreneurs rsquo willingness to expand their busniesses through the formal financial setors rsquo financing. "