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 Business News | March 2007 
Carlos Slim Strengthens Forbes Ranking
 Marla Dickerson - LATimes
| | "He's Mexican. We always have to root for our countrymen." |
Mexico City - Telecom mogul Carlos Slim Helu has built a corporate empire so vast that it's nearly impossible for most Mexicans to go a day without slipping a few pesos into his pocket.
On Thursday, Forbes magazine estimated his net worth at $49 billion. That represented a $19 billion increase from 2006, the biggest one-year jump in a decade for anyone on the magazine's annual list of the world's richest people.
Microsoft Corp. co-founder Bill Gates' $56 billion helped him retain the top spot. Investor Warren Buffett was again runner-up with $52 billion. But with those tycoon philanthropists increasingly focused on giving away their fortunes, the 67-year-old Slim appears destined to surpass them both. While his third-place ranking didn't change from 2006, he increased his wealth by 63 percent. That's a growth rate of $2.2 million an hour.
When Mexicans talk on the phone or use the Internet, they're almost certainly doing it through a company controlled by Slim, who in 1990 bought the old state-owned telephone company Telefonos de Mexico, or Telmex, and turned it into a cash machine. Profits from that near-monopoly have bankrolled Slim's telecom acquisitions around the region, propelling his America Movil wireless spin-off into the largest provider of cell phone service in Latin America.
Mexicans buy cigarettes from Slim's tobacco company, apply for mortgages at his bank and purchase policies at his insurance firm. Shoppers patronize his department stores, eat as his restaurants and browse for CDs at his music outlets.
Travelers fly his discount airline. Industrialists buy his auto parts, electronics, steel and ceramic tile. The government hires his infrastructure firm to build highways, water treatment plants and oil platforms. More than 250,000 Mexican employees draw paychecks from his companies.
'It's virtually cradle to grave. It's Slimlandia,' said George Grayson, a Mexico expert at the College of William & Mary in Virginia. 'You are engulfed by Slim in Mexico.'
The portly Slim has more than tripled his fortune since Forbes published its 2004 list, thanks to a string of acquisitions and the ballooning value of his telecom holdings. His current net worth is equivalent to nearly 6 percent of his nation's GDP, a feat unmatched by even America's robber barons at the height of their influence in the United States.
News of his spectacular increase in wealth elicited cheers and jeers in Mexico, where Slim is a polarizing figure. And it comes at a sensitive time for Mexico. President Felipe Calderon is under pressure to confront business oligarchs blamed for squelching competition, exacerbating income inequality and retarding Mexico's economic growth.
'I have tremendous respect and affection for him personally,' said Mexico's former Foreign Minister Jorge Castaneda, who has publicly advocated breaking up Slim's Telmex, which controls 94 percent of the Mexico's land lines. 'The problem is that this is a country where we don't have either the regulatory capacity or the political will to break up monopolies.'
The son of a Lebanese immigrant shopkeeper, Slim to some Mexicans represents the triumph of hustle over heredity in a nation where a few dozen families have held sway for generations. He isn't flamboyant or ostentatious. He has given foreign competitors fits. His ranking among the world's business elite invokes pride in a country that often suffers from a chronic sense of underachievement.
'I'm rooting for him to take first place' on the Forbes richest list, said Teresa Sotelo, 50, a public accountant in the capital. 'He's Mexican. We always have to root for our countrymen.'
For others, Slim is the outsider who has become the consummate insider, a prime example of the crony capitalism that has benefited the few at the expanse of many. Nearly everyone gives Slim credit for being a savvy businessman. He made his first investments as a child and has coolly snapped up assets at bargain prices during periods of economic turmoil.
But critics say his purchase of Telmex was a sweetheart deal that merely replaced a public monopoly with a private one. Studies have shown that Mexicans pay some of the highest telecom rates in the world, which is crippling the nation's competitiveness.
Rivals say Telmex has thrown up numerous roadblocks, including high connection fees that have blocked their market access. Regulators have had little success in leveling the playing field. Slim's companies routinely use Mexico's lumbering court system to stave off authorities' rulings against them.
Still, the constant drumbeat of criticism may be forcing Mexico's monopolists to try to soften their image. Slim, who has ceded most of the day-to-day control of his empire to his sons, recently said he plans to devote most of his time to philanthropy.
But some experts say a kinder, gentler Slim won't make the job of Mexico's anti-trust authorities any easier.
'Carlos Slim may start giving away money hand over fist,' said Pamela Starr, Latin America analyst with the Washington D.C.-based Eurasia Group. 'But that doesn't mean he won't try to protect his monopoly as long as he can.'
Carlos Slim Helu
Age: 67
Fortune: inherited and growing
Source: telecom
Net Worth: $49.0 bil
Country Of Citizenship: Mexico
Residence: Mexico City , Mexico, Latin America
Industry: Communications
Marital Status: widowed, 6 children
The world's third-richest man is $19 billion richer this year and catching up with Americans Bill Gates and Warren Buffett thanks to a strong Mexican equities market and the performance of his wireless telephone company, America Movil. The son of a Lebanese immigrant, Slim made his first fortune in 1990 when he bought fixed line operator Telefonos de Mexico (Telmex) in a privatization. Last year he spent $3.7 billion to buy the Latin American operations of Verizon Communications, expanding his empire into Puerto Rico and the Dominican Republic. A widower and father of 6, Slim is a baseball fan and art collector. He keeps his art collection in Mexico City's Museo Soumaya, which he named after his late wife. In recent years he has donated close to $4 billion to education and health projects, and to the revitalization of downtown Mexico City's historical district. |
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