Blogging mostly about mundane stuff like, immigration, Workers' Compensation and other immigrant related activities.

Sunday, June 04, 2006

Fat Cat Slim

Mexico's Carlos Slim Helu is now ranked as the 3rd richest man in the world according to Forbes.  Slim Helu's Wikipedia page is here and his fortune is an estimated 30 billion Dollars.  This year Slim Helu's fortune increased by an incredible $10 billion, thanks to a growing and diverse empire that includes mostly TelMex holdings, as well as a host of retail, banking insurance, and auto parts manufacturing.  In the United States his Grupo Carso owns CompUSA and he was at one point the largest stake holder of MCI.  He bought the MCI stake for about $300 million in 2002 when the company, then called WorldCom Inc., was in bankruptcy.  In April 2005, Bloomberg reported that Slim Helu sold MCI stake to Verizon for $1.1 billion Dollars. 

Since 1996 Carlos Slim Helu's fortunes have been on an incredible rise growing from 2.7 billion to the current estimate of 30 billion.

The rise in Slim Helu's wealth has resulted from a mix of business savvy, high powered connections and Mexico's unwillingness to break up monopolies.  TelMex charges some of the highest rates for it's telecommunications services and Slim Helu's ties to Mexican presidents and politicians have resulted in his facing little competition. 

From NY Times:

"Forbes reported that the average monthly phone bill for a small business in Mexico is $132, compared with $60 in the United States."

As Carlos Slim Helu's fortunes rise, so does the attention, which he has begun to combat by casting himself as a philanthropist, a patron of the arts, as well as a citizen concerned with the welfare of Mexico and it's working poor.  Slim Helu has been known to provide scholarships to students, pay the bail money for underage first-time offenders and prevent the long wait that accompanies trials in Mexico.  He has also financed plastic surgery operations for disfigured children.

In a September 2005, Mr. Slim Helu and several other of Mexico's most powerful business leaders launched the Chapultepec Pact.  Mexidata reported:

"The most financially powerful individuals in Mexico met as citizens on September 29, at the Castle of Chapultepec, to sign an accord called the "Pact of Chapultepec."  Headed by Carlos Slim, the wealthiest man in Latin America, other participants included Banorte bank owner Roberto Gonzalez, Televisa Chairman Emilio Azcarraga, Ricardo Salinas Pliego of TV Azteca, and a host of others.  In all, according to some commentators those who signed the national unity pact represent 98 percent of Mexico's wealth."

So how much of what Carlos Slim Helu does can actually be viewed as working towards closing the gap between rich and poor in Mexico?  Not much.  Despite all of Mr. Slim Helu's generous civic actions they pale in comparison to the millions he and his business partners have contributed to the ruling party the PRI and their political campaigns.  The near monopoly power that TelMex enjoys in Mexico has resulted in what consumer advocates cite as price gouging of the poor while the ratio of telephones per 1000 inhabitants is lower than Brazil and Argentina both of which have smaller economies than Mexico.

The fact that Slim Helu's Chapultepec Pact is is being championed by Mexico's business elite and even the Mexican press and has all major presidential candidates on board, demonstrates the power that Slim Helu wields in Mexico.

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