People Profiles: Carlos Slim

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Business magnate Carlos Slim dominates Brazil’s megacorps and his influence is spreading across the border into the USA and beyond. We delve into the illustrious past of the world’s second richest man.

This is how Carlos Slim was described by the Billionaire’s list bible, Forbes Magazine, in October of last year:

‘Carlos Slim Helú holds the title of the world’s second richest man (net worth USD $69 billion), having lost the world’s richest spot to Bill Gates in May. The biggest chunk of Slim’s fortune lies in telecom. He also owns mining, financial, industrial and real estate companies, plus a stake in the New York Times. In 2012 he added soccer to the mix, buying into Mexico’s Leon and Pachuca clubs and Spain’s Real Oviedo. In February, Slim and Bill Gates announced they were funding research to reduce hunger and support innovation for farmers in the developing world.’ The entry also notes that he has since regained the Number 1 Billionaire spot, but slipped from #11 to #12 in the World’s Most Powerful List.

Biography.com simply notes that: ‘Carlos Slim Helú, one of the wealthiest people in the world, was born on January 28, 1940, in Mexico City to a family of Lebanese Christian immigrants. He became a billionaire after the economic crash of 1982 when he purchased investments at low prices that would later be extremely valuable. In 2000, he founded the Foundation for the Historic Centre of Mexico City to restore and save significant buildings.’

We do know that on Mondays, the second-richest man in the world likes to sit down to a home-cooked Mexican meal of quesadillas or chile relleno in his simply-furnished home.

Just six bedrooms and a modest swimming pool means from the exterior the house is worlds apart from the sprawling mansions inhabited by the rest of the planet’s top earners.

But inside the clues of Mr Slim’s vast personal fortune are all around: the walls are adorned with the paintings of Van Gogh, Renoir and Diego Rivera, while the rooms are dotted with sculptures by Auguste Rodin – of which Mr Slim is the world’s foremost collector. Mr Slim’s vast family empire controls more than 200 companies spanning industries including banking, telecoms, road-building and restaurants.

His influence is all-encompassing in his homeland of Mexico, and it is rapidly spreading across the border into the USA and beyond. He idolises his father, Julian, who emigrated from Lebanon at the age of 14 and made his fortune trading property in the 1910-17 Mexican revolution. Carlos picked up Slim Senior’s canny acumen. He invested in Government saving bonds at the age of 11, tracking his purchases in a detailed ledger. By the age of 15 he had bought a small shareholding in Banco Nacional de Mexico – then the country’s largest bank.

By the age of 26, in 1966, Mr Slim was worth USD $40 million through a series of investments and acquisitions. In 1982 the Mexican economy, which had substantially relied on oil exports, contracted rapidly as the price of oil fell and interest rates rose worldwide. Banks and other businesses were nationalized, crippled or collapsed and the peso was devalued. Now, Slim invested heavily. He bought outright, or a large percentage of, numerous Mexican businesses, including Reynolds Aluminio, General Tire, Bimex hotels and Sanborns, a food retailer. He also acquired a 40 percent interest in the Mexican arms of British American Tobacco and 50 percent of that of The Hershey Company. He moved into financial services as well, buying Seguros de México and creating from it, along with other purchases such as Fianzas La Guardiana and Casa de Bolsa Inbursa, the Grupo Financiero Inbursa. Many of these acquisitions were financed by the cash flow from Cigatam, a tobacco business which he bought early in the economic downturn.

In modern history, no one has dominated a major economy as overwhelmingly as Carlos Slim does that of Mexico—a country of a hundred and ten million citizens, in which the per-capita income is little more than ten thousand dollars. In August, 2007, Eduardo Porter, a member of the Times editorial board, wrote on the Op-Ed page, “Growing up in Mexico City, I always knew Mexico was an unjust country—a place where small coteries of the privileged control all power and wealth while half the population lives in poverty. But it never occurred to me that Mexico would have billionaires.”

Grupo Carso his holding company also owns T1MSN – the Latin American version of Microsoft’s MSN website – which is ironic since Mr Slim refuses to use computers and demands that everything he needs to know about each business deal be presented on a single sheet of paper. This mistrust of technology is even more ironic when one considers that, according to The Wall Street Journal, Slim credits part of his ability to “discover investment opportunities” early to the writings of his friend, futurist author Alvin Toffler.

Comparing Slim to the robber barons of America’s Gilded Age, Porter observed, “It takes about nine of the captains of industry and finance of the 19th and early 20th centuries”—he listed John D. Rockefeller, Cornelius Vanderbilt, John J. Astor, Andrew Carnegie, Alexander Stewart, Frederick Weyerhaeuser, Jay Gould, and Marshall Field—“to replicate the footprint that Mr. Slim has left on Mexico.”

This is not to say he hasn’t tried to make a positive contribution. In 1995 he established Fundación Telmex, a broad-ranging philanthropic foundation. This followed the creation of his eponymous non-profit philanthropic foundation, Fundación Carlos Slim Helú in 1986. In 2007 Slim announced that the latter body had been provided with an asset base of USD $4 billion and that it would be establishing Carso Institutes for Health, Sports and Education. Furthermore, it was to work in support of an initiative of Bill Clinton to aid the people of Latin America. However, because Mexican foundations are not required to publish their financial information, it is not possible to confirm Slim’s claims of charitable giving through a public source, even though in May 2011, Slim was mentioned in Forbes’ World’s Biggest Givers after stating that he had donated USD $4 billion to his foundation. And there have been further criticisms of his activities in his homeland, where his growing fortune has caused controversy because it has been amassed in a developing country where average per capita income does not surpass USD $14,500 a year and nearly 17 percent of the population lives in poverty. Critics claim that Slim is a monopolist, pointing to Telmex’s control of 90 percent of the Mexican landline telephone market. Slim’s wealth is the equivalent of roughly 5 percent of Mexico’s annual economic output. Telmex charges among the highest usage fees in the world, according to the Organisation for Economic Co-operation and Development.

According to Professor Celso Garrido, an economist at the Universidad Nacional Autónoma de México, Slim’s domination of Mexico’s conglomerates prevents the growth of smaller companies, resulting in a shortage of paying jobs and forcing many Mexicans to seek better lives in the United States of America. The Mexican Senate, which has received contributions from Carlos Slim, has made it easier for firms to hire and fire workers, and shorten labor disputes. The man himself seems unmoved by such attacks, saying:

“When you live for others’ opinions, you are dead. I don’t want to live thinking about how I’ll be remembered.”

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