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Rich grows Richer, Poor gets Poorer Print E-mail
Written by Pinoy Entrepreneur, on 26-03-2008
The rich gets richer, while the poor gets poorer. We've heard this line, usually uttered in a political context, so many times before. The initial observation about the widening chasm between the haves and the have-nots usually end up with a criticism against the rich. And rightly so, to a large extent. Economic power begets political power, and political power is used to protect and amass more economic power. It's a cycle perpetuated by those who wish to maintain power and, in the process, inevitably oppress the poor.

This, on the other hand, is unfair to those who sweat it out day and night, toiling hard to go up the ladder of economic prosperity. If we remove oppression and related harsh words from the discussion, the fact still remains that the rich gets richer, and the poor gets poorer. Indeed, it has been reported that the top 1% of all households owned 35% of the world's wealth in 2007. 

More opportunites open up to rich people. It's as natural as friendship -- the rich have rich friends, who, when they have business opportunities, naturally ask their friends to invest, supply, build or whatever it is that translates to business income. Not so with the poor people, and one of the basic reasons is not because they have no rich friends, but they just don't have the capital.

Rich people have the capital. Pinoy Entrepreneurs need capital. Capital means a lot. It makes a world of difference. You need capital for new businesses and ventures. In fact, even without going into business, capital will generate a handsome income sufficient to support one's day-to-day expenses. The poor has relatively lesser access to opportunities and capital, which concepts are distinct and separate, but as Prof. Yunus of the Grameen Bank notes, capital, to the poor, is opportunity.

Speaking of capital, rich people easily gets credit, usually under better terms. Rich people have better credit standing. Lenders and financial institutions approach them to offer credit, which is ironic because the poor needs credit more than the rich. Then again, unless you're Prof. Yunus of the Grameen Bank, lending to the poor seems to be a recipe for business disaster. Financial institutions are more lenient to debtors who have difficulty in paying debts amounting to hundreds of millions of pesos, as compared to an ordinary worker who owes a few thousand in credit card debt.

So, the rich easily gets richer. Is it their fault that the poor gets poorer? What should be done to address the widening gap between the rich and the poor?

Published in : Topics, Business Soul

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