Mr. Carlos Slim keynote address in Business Summit Mexico, 2010 (October 24-26, Toluca, State of Mexico). This 8th edition was titled “Take-off Time: Actions for Change”.
Toluca, State of Mexico, October 24, 2010.
This new civilization has new paradigms. The economic paradigms, we know, are globalization, competition, innovation, productivity, flexibility, medium and long-term vision, flexibility in decision-making processes, large investments and efficiency to execute both projects and programs; all of these new paradigms, all of these new features, are appropriate for both civil society and private sector, rather than for governments.
What we are looking at, in my opinion, is that all those countries having a huge tax collecting, like Spain by instance, which collects about 40% and has a deficit about 11-12%, means that the Spanish State controls about 52% of the Spanish economy. That state is loaded, besides, with huge liabilities, a high unemployment rate, and costly welfare policies. It affords about 1,000 or 1,200 monthly euros for each of the unemployed against 800 euros as average monthly wage, so the unemployed refuses to accept jobs and the economic situation becomes more pressing.
The United States is not better; it has huge deficits and liabilities. What I want to stress as a thesis is that the way out of these problems lies on a biggest involvement of the private sector and even civil society. How civil society is called for? NGO’s and other social institutions should become more engaged in environment care, human rights, public safety, etc., that is, we should work more actively with social society for solving these problems.
On the other hand, big investment and employment challenges are in the face of us, of course. This is a private sector task. Here I want to stress another point that could sound a bit harsh, yet it counts for the lesson of all of the developed countries: tax-collecting increases ─many of them being made for political reasons and welfare policies while ignoring long term sometimes─ are allotted to run current spending, not public investment.
Many countries run very costly retirement, universal health care or early retirement policies. Such programs are highly compromised, exceeded in fact, so they are unsustainable. Fortunately, both the Mexican federal government and the State of Mexico have introduced reforms for balancing their own social policies.
Job creation is a pressing question. It appears clear nowadays that poverty cannot be viewed as a social justice or ethical issue any longer. Big charity and aid works did play an important role in the past, but poverty has now acquired a pressing economic importance because what we need is educated people to overcome poverty.
In this sense I would say that what is needed for those wanting a leveled starting point is, by instance, maternal nutrition during pregnancy to make sure healthy birth, so the poor have equal opportunity from the very beginning.
More generally, I am talking about early education. Good nutrition, good health and good education are critical for the new civilization. Young people should enter to the labor market at 20 or 22, not 15 or 16 years old age. So, they should have better education and training in order to make a better workforce offer and have more job choices to choose.
These are the young men we should look for, and they are many. There is a talk about Mexico’s demographic bonus which means about 2,400,000 children. I don’t have the child-mortality figure, but it is clear that it has substantially diminished during the last decades.
So, there are more than 20 million young people between 15 and 20 years old, to say, so we need to have not only good job offering but a well-educated workforce. Why? Because human capital, education and knowledge are critical for this new civilization. What is the key for competing in this new world? The key is having a powerful human capital. This is the only way to accelerate our own development.
I think that, apart from the eventual course of things, population growth will continue to diminish by much during the next 15 years, while per-capita income, I hope, will probably double at least. Per-capita income is now about a little more than 8,000 dollars, and it will be about 16,000-17,000 dollars in the foreseeable future. At this level extensive middle classes will be formed, and our country will surmount the underdeveloped or developing stage to be a developed one. I am talking about the next 15 years.
What is to be done during these next 15 years? What we have to do, as I am saying, is to create more human capital and job opportunities for the university, middle-level and technical young graduates.
The point that I want to stress is that this is an effort to be made immediately, in the very short term. It is not a task for medium or long term because then birth rate growth will be lesser than the current 1,900,000 yearly birth rate, and it will probably diminish faster during the next years. Population will become more urban and the educational level will be higher.
By then, the already high job offer will diminish. So, our urgent task is to create more job opportunities and education for the current job-offering generation.
Due to our human-capital formation and competitiveness needs, it is preferably that 16 years old young be in school instead of working because, if educated, they will have more chances to have a regular job.
So, in this strategy and planning we should even consider education as an occupational factor for the young. This would help us to create the required job posts.
This is the more interesting because at this point we should conceive non-traditional ways for education. As I have said, developed countries economic policy has exceeded itself; its condition is critical and it should evolve seriously. Such an evolution should run through civil society and private sector as well, especially in the economic field.
We have to study fresh educational alternatives. In order to double our educational capacity we can’t build more school buildings or physical spaces, neither graduate more teachers because they are not any-time-now tasks. Instead, we have to rely on the technology that is already transforming our civilization and society to rapidly increase distance and virtual education; I mean education through internet with the best teachers producing educational material and some groups of persons as conductors. This can be rapidly done.
In order to enlarge middle-level and higher education we have to rely on these modern communication and telecommunication means. In fact, that’s the only way to achieve it, and we can do it with high quality.