Buy from the poor, sell to the rich

The Philippine economy needs a drastic paradigm shift. Our country will never achieve inclusive economic growth nor prosperity for all Filipinos unless we revolutionize our dysfunctional business model. We all keep selling to the poor “masa” when we should be buying from them.

China is the world’s largest consumer market, but it did not content itself with selling within its borders and selling only to local Chinese. Rather, the Chinese people sold to the world and as a result uplifted 800 million people from poverty to become the world’s second largest economy.

In contrast, majority of businessmen in the Philippines—both local and foreign — choose to sell to the poor “masa”—food and drinks, soaps and shampoos in sachet, alcohol and cigarettes, even prepaid load for mobile phones.

There is nothing illegal about this but I question its morality. If businessmen sell to the poor, only they get richer while the consumer will get poorer. This must explain why the income disparity between the rich and the poor gets wider every year.

We should stop selling to the poor. Instead we should buy from the poor so we can enrich them. The poor do not need our products. They need our money so they can buy higher quality products at higher prices.

I implore businessmen — local and foreign, big and small — to revolutionize their business models. Buy from the poor farmers, fishermen, laborers, and micro, small and medium enterprises at fair market value, if not even higher prices.

Next step is for them to introduce innovations to enhance value, then turn around and sell to the rich. Since there are not enough rich people in the Philippines, then they must sell to the rest of the world—a bigger and richer market—world-class export-quality products at higher prices yielding higher margins.

It’s bad enough that we do not buy from the poor, but it’s worse that we buy from rich countries — importing (or smuggling) from abroad, then selling to poor Filipinos so we end up with an economy I call a “leaky bucket,” where money that enters the country through overseas remittances and BPO revenues flies right out the window.

Basic economics, if not plain common sense, teaches us that every $1 of export makes a country richer, while every $1 of import makes a country poorer, yet we still perpetuate this vicious pincer of importing from rich nations and selling to poor locals — a double whammy.

We must stop enriching ourselves at the expense of the poor not only because it is unchristian and may lead us to perdition, but also because it is bad economics.

Poor consumers with low disposable income and weak purchasing power do not make for an attractive market. Let us adopt the ideal business model. Buy from the poor, sell to the rich. Enrich the poor.

As written originally at https://opinion.inquirer.net/113378/buy-poor-sell-rich