World Bank pushes for pro-poor businesses
Darwin G. Amojelar
Manila Times
THE World Bank wants the private sector to focus on the poor in developing countries such as the Philippines to bring them out of their misery.
“Addressing the unmet needs of the BoP [base of the economic pyramid] is essential to raising welfare, productivity, and income—to enabling BoP households to find their own route out of poverty,” the Washington-based lender said in a report titled, “Business and Poverty: Opening markets to the poor.”
The World Bank estimates the Philippines’ BoP market to number 23.6 million Filipinos with a combined purchasing power of $13.09 billion. In estimating the local BoP market, the multilateral lender used the 2000 Philippines Family Income and Expenditure Survey.
In Asia, the BoP market represents 83 percent of the region’s population and 42 percent of its purchasing power—a significant share of Asia’s rapidly growing consumer market.
The report said engaging the BoP in the formal economy must be a critical part of any wealth-generating and inclusive growth strategy.
“Many of those in the BoP, and perhaps most, pay higher prices for basic goods and services than do wealthier consumers—either in cash or in the effort they must expend to obtain them—and they often receive lower quality as well,” the World Bank said.
“For some services BoP consumers lack access altogether. The high cost of being poor is widely shared: it is not just the very poor who must walk long distances for water or firewood, or who often pay more for the transportation to reach a distant hospital or clinic for the treatment, or who face exorbitant fees for loans or for transfers from relatives abroad,” it added.
The report said the BoP market analysis is intended to help businesses and governments think more creatively about new products and services that meet this sector’s needs.
Globally, about four billion people who live in relative poverty have purchasing power representing a $5-trillion market. The BoP market in Thailand stood at $23.38 billion; Vietnam, $16.03 billion; Malaysia, $16.27 billion; and Indonesia, $6.17 billion.
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