Interview to Mr. Carlos Slim Helú performed by Salvador Camarena, published in El País news from Spain.
October 18, 2012.
Seventy-two years old, the richest man in the whole world makes a case against early retirement. Carlos Slim Helú has a busy agenda; he has not concluded a meeting yet while the next group begins to assemble around his table. In this interview about the European situation he holds that the European wellbeing state model has turned to be unsustainable. He explains that adjustments are required to guarantee high-tech training for the unemployed. He pleads for setting up a larger retirement age, less working hours and larger workdays. The Honorary President of Grupo Carso (América Móvil) gives advice to overcome the current crisis: “Europe needs two things to be made: selling assets in order to diminish both debt and deficits, while inviting the private sector to make the investments that the state has no longer a reason to make.”
Question. In an interview, you have recently stated: “You see the figures and they say you what is going on”. What is the message coming from the European figures? What is going on there?
Answer. It’s a mix of figures, concepts, history and the evolution of things. Technology has been the driving force for societies’ civilizing changes during the last 10,000 years: wheel, alphabet, sailing, mill, everything. Advances have been steady and low, normally. But sudden and big changes also happen to occur and they provoke huge civilizing changes. After traversing across the post industrial era, we are living in that new civilization whose paradigms are wholly different from those of the agriculture societies, where power was monolithic, slavery was normal and there were no human rights. We already are in a 180 degree opposite position. That new civilization is one of democracy, freedom, human rights, environment care, competence, productivity, globalization… That big technological change has brought many consequences. Since World War Two, Europe has experienced big economic growth, big population growth and, above all, huge fiscal expenditure in spite of having sizeable tax income. They have been taking away growing domestic product shares, and they are running big fiscal deficits. The main reason for that situation is that European governments adopted an ever-growing welfare state since the end of World War Two. That welfare state has turned to be unsustainable. Some structural adjustments are needed, yet they are absent. Governments, instead, are using the old fiscal-adjustment recipe for increasing taxes or decreasing public spending. In that wellbeing state, people use to retire at 60 years old in some countries, while life-expectancy is about 85 years old nowadays, and it is expected to grow even more. These countries run universal health-care systems which are very important, but whose efficiency is low. Some of them provide health-care services for tourists even. The worst thing is the big amount of unemployed people, especially the young. Figures are implacable on that respect. From a social and economic standpoint, such a situation is worrisome. And it seems that nobody is thinking about proper solutions.
A. Retirement age should be enlarged because past societies were based upon physical work. During the industrial age, workers should stand united to the machine. Physical wear and tear was big. Modern societies, on the other hand, are based on services. Physical force and work are no longer important. Experience and knowledge are that count. Ours’ is a knowledge society. Retirement at sixty years old seems to be a sad thing because people live its best step at that age.
Q. Would you get retired?
A. Alas, since many years ago! That’s absurd. In a knowledge society experienced and qualified people is misused because they retire. I think that retirement age should be enlarged. I mean 70 years old to say, by assuming that people is going to live until 85 on average. When a person is 65 or 70 years old, his life expectancy is bigger. Life expectancy can be about 75 or 77 years old since birth. But those having 70 years old or more in good health conditions can live more time. On the other hand, I think that we should look for providing universal health care, of course, but in a more efficient way, better [falta una línea al menos], adequate social-protection networks and paying out labor-upgrading for the retired.
Q. That is a cultural change.
A. We are already living a whole fresh-paradigms civilizing change. What we have to do is to introduce the required structural changes for the new conditions. Changes should be made. Having 50, 30 or 20 percent unemployed young people is unacceptable. Growing wellbeing systems and shorter retirement age are no longer conceivable. Unemployment plans or unemployment insurance should be linked to labor upgrading in order to facilitate further hiring. Unemployed persons should be able to perform new tasks; otherwise he or she will never be hired again. Working people should be able to perform multitask activities. The more they got able, the better job opportunities for them. What is already occurring in Europe and the whole world in general is a civilizing change crisis. In a context of increasing productivity, efficiency and globalization, some working sectors tend to lag behind and several problems arise. Some deep changes are required to be effectuated in order to find working solutions. Apropos of figures, they got short for financing these programs. If we calculate the current retirement costs of working people, both employed and unemployed, they would come about unsustainable.
Adjustments are called for, while, of course, offering valuable choices to working people, by instance less working days and larger working hours during the last 10, 15 or 20 laboring years.
Q. From an investor viewpoint, where European opportunities are? Which sectors?
A. The first important thing is to solve the structural problems. It would be remote that developed countries go back to underdevelopment. There are no strong clues of it in sight. What is observable is that other countries tend to advance faster. Europe will experience some hard times, but it will find the right solutions and restart its development path. Some activities will demand more labor force since they are capital intensive and all embracing. One of them is information technology, a very attractive field in the near future. Health care, education, entertainment, health care for the older, tourism… Once the required structural changes are introduced, all of these activities will create employment. It should be clear that our global society is a service-based one.
Q. Almost everybody is pessimistic nowadays, yet you are investing in Europe. It is a symptom that you are expecting for recovery?
A. No, no. I just think that technology business investment is capital intensive, while technological change goes fast. Staying ourselves in state-of-the-art technology stands as one of our core principles. Those in the business who refuse to invest will lose quality ground, service offering, market share and clients. Clients will choose those firms offering state-of-the-art services. Client preference is linked to it. That is the reason why we heavily invest in that sector. Information technologies stand for the nervous system of that civilization.