“Against economic crisis, development, not austerity”: Carlos Slim, the world’s wealthiest businessman
October 26, 2011, Geneve Switzerland.
EuroNews interviews Carlos Slim, the Mexican telecom magnate in International Telecommunications Union’s Conference in Geneve.
He displaced Bill Gates’ second place from Forbes’s list of the world’s richest men. He fits the some-times true topic of “self-made man”, the one who buys when prices are low.
His gold opportunity came in 1990, when he acquired the then state-owned Telmex. Now Telmex stands for the biggest mobile-phone operator in Latin America.
His business interests embrace many fields: hospitals and restaurants; cement and department stores. It is said that he is unable to avoid putting money into his pockets each single day.
The following is an interview by Chiara Reid:
EuroNews: What do you think about the ongoing economic crisis? We are seeing “indignados” protesting everyday in front of London’s Saint Paul Cathedral, in Madrid, Rome and Athens streets, even in some Latin American cities. Do you think that the capitalist model that has been so good for you is nearing to an end?
Carlos Slim: No, I don’t think so. I think that governments have a duty in supporting public education. Those parents who are unable to afford their children’s education should be supported by governments.
In respect to the current crisis, governments should balance public deficits and adjust structural problems. The steadiest way to achieve these aims is, in my opinion, to have development programs instead of severe austerity plans. When unemployment is so large, people will get angry, logically. If we don’t create opportunities, hope or educational and job opportunities for the young, we will be making a big mistake.
EuroNews: You’re talking about government responsibilities. However, as a big investor, don’t you feel yourself responsible for the current crisis?
Carlos Slim: By no means. A big problem arising from monetary and fiscal policies is that they drive financial resources to mere financial activities, not to the productive sectors. I do invest in the real economy: telecommunications, small and medium-size firm commercial credit, insurance industry, mining, infrastructure building, and housing.
Capital should be managed by commercial banks to extend credit for small and medium-size business, rural activities and worker’s families.
EuroNews: How the current crisis can be fixed?
Carlos Slim: I should insist that the biggest flaw crossing over all of the structural imbalances is huge fiscal deficit. Tax collecting is not enough to pay for all of the public expenses.
I think that governments should not opt for austerity plans, but for private investment for development programs. Austerity plans shrink the economy and magnify problems.
EuroNews: It is said that you are the world’s richest man, and you live in a country where half of the population is poor. From the outside, many people see this as a stark contrast. How do you see it?
Carlos Slim: I think that in Mexico, like in many other similar countries, the best investment is fighting poverty. The best investment you can do is to create job posts. The best investment you can do is to absorb poor and marginal people into modern market economy.
EuroNews: To make them consumers, so you can sell them your own products?
Carlos Slim: Everybody should be able to consume or sell. In any case, people should have work ability, which means that they should be educated to perform good job activities. I am talking about human-capital creation.
EuroNews: What about your own telecom monopoly in Mexico? Many people say that Mexico’s telecom services are expensive due to lack of competence. Until now, the regulatory authority has treated your own business very well. Ripe time for equal opportunities has come?
Carlos Slim: Well, you are starting by the wrong question. Monopoly means just one player…
EuroNews: Well, you own 80% of fixed phones lines and 70% of mobile ones…
Carlos Slim: Are you aware that fixed lines are not economically relevant? On the other hand, my own firm is not a monopoly; there are a lot of competitors. In respect to prices, check up Merril Lynch’s ranking and you will realize that our prices rank very low in the OECD countries.
EuroNews: The opposite is said…
Carlos Slim: I don’t know what it is said…
EuroNews: The World Bank says…
Carlos Slim: No, no, sayings don’t fit the facts.
EuroNews: Last question. You come from Lebanese ascendancy. What do you think about the so-called Arab spring? Do you see looming investing opportunities in Tunisia, Egypt or Libya?
Carlos Slim: It is clear that we are already living in a new civilization –a knowledge, technology and service-based civilization. The paradigm for that new society includes freedom, plural democracy, human rights, globalization, competitiveness, technology-based productivity, environment-friendly economy and innovation. Such are the basis for that new civilization.
EuroNews: Are you going to invest in the new Arab economies?
Carlos Slim: It will depend on many factors. We are committed to make meaningful things in the 18 or 19 countries in which we are already working. We have many things to do in them for now.