King Midas on the Move
by Frontera NorteSur
Posted on April 3, 2006
Now rated by Forbes magazine as the world's third-richest man with an estimated fortune of $30 billion, Mexican businessman Carlos Slim often has been called King Midas because of his wildly successful business endeavors. [forbes profile] Slim's buddy Bill Gates and Warren Buffet have more dough, according to Forbes. The prime beneficiary of the Mexican state's privatization of the public telephone company Telmex back in 1990, Slim has made a fortune in telecommunications, retail trade and cigarette distribution, among other activities.
In this Mexican election year, Slim made his mark traveling around the country and promoting his Chapultepec Pact for economic development and political stability. The agreement calls for increasing investment in education, healthcare, job training, and infrastructure development. In short, an infusion of money into under-funded sectors of the economy. Mexico, Slim holds, is at a ripe juncture for an economic leap catalyzed by a private-public partnership. "The internal and external factors are favorable, perhaps never like this in the history of Mexico," Slim said in a recent Guadalajara meeting. "Let's not allow this opportunity to pass."
Generally worded, the Chapultepec Pact is a declaration that could attract people from across the political spectrum. Slim has been successful in convincing other prominent businessmen, politicians, union leaders, intellectuals, and community leaders to sign on to his movement. Chemist Mario Molina, Mexico's internationally known Nobel Laureate, is a Chapultepec supporter, as are presidential candidates Roberto Madrazo and Felipe Calderon. At a recent meeting in Chihuahua City, the governors of the northern and border states of Durango, Baja California, Chihuahua, and Coahuila signed the dotted lines of the pact.
Presidential front-runner Andres Manuel Lopez Obrador still hasn't officially endorsed Chapultepec, but he has a long-standing relationship with Slim. During the 2000-2005 Lopez Obrador administration in Mexico City, Slim bankrolled much of the renovation of the capital city's historic downtown.
During the last regional Chapultepec conference held in Guadalajara this month, Slim was asked about Lopez Obrador's absence from the pact. The billionaire said it didn't matter whether someone signed or not as long as he was in general agreement with the overall goals of Chapultepec. Slim said he was confident business and investment as usual would go on whoever was elected president in 2006, a statement that departed from recent comments by former President Carlos Salinas de Gortari and others warning of a Lopez Obrador victory as negative for the political business climate.
Slim has criticized aspects of the economic model many Latin Americans call neo-liberalism, saying not enough emphasis has been placed on eradicating poverty, boosting growth and cultivating human capital. Some analysts caution, however, that one trend that could emerge from Chapultepec is a greater reallocation of public pension funds in development schemes that benefit private interests.
According to Chihuahua journalist Luis Javier Valero Flores, Chapultepec specifically urges "changing the law to be able to add private and public savings to public finances." One Slim critic is Guillermo Ortiz Martinez, the governor of the central Bank of Mexico, who in recent veiled comments lashed out against monopolists in the private sector. Ortiz criticized Telmex's domination of the fixed and cellular phone market, calling the company's services "the most expensive in the world." Responding to Ortiz, Slim said, "(Guillermo Ortiz) doesn't agree? If he doesn't want to sign (Chapultepec), he doesn't have to sign."
Seemingly unworried, Slim is moving ahead with various projects that have significant ramifications for the coming years. The magnate has capitalized a $9 million fund to study the implementation of 109 priority public works projects defined as key for breaking "the inertia of underdevelopment." To carry out such projects, Slim has founded a new company, Ideal, which is focusing on building public works and infrastructure. This month, it was announced that Ideal is to build a new wastewater system in the northern city of Saltillo, Coahuila. The plant is scheduled for completion by September 2007.
Ideal is also hoping to land the contract for the expansion of the Mexicali-Tijuana aqueduct. According to the federal National Water Commission, the $111 million project will provide water to 390,000 inhabitants of the Baja California municipalities of Tecate, Tijuana and Playas de Rosarito. Ideal will be publicly traded on the Mexico City and New York City stock markets.
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-- El Universal, March 10, 12 and 14, 2006. Articles by Carlos Coria Rivas, Fernando Pedrero, Ulises Zamarroni, and editorial staff.
-- El Diario de Juarez, March 12, 2006. Articles by Luis Javier Valero Flores and
-- Frontera/EFE, March 9, 2006.
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Reprinted with permission from Frontera NorteSur (FNS): on-line, U.S.-Mexico border news, Center for Latin American and Border Studies, New Mexico State University, Las Cruces, N.M.
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