Carlos Slim: world’s first trillionaire?

Carlos Slim has replaced Bill Gates as the world’s richest man, according to a Mexican financial journal. Online financial publication "Sentido Comun" (Common Sense) claims that businessman Slim is now worth an estimated $US67.8 billion. In 2006 Forbes rated Slim, who controls most of Mexico’s telecommunications industry, as the world’s third richest man however Sentido Comun now says that a 27 per cent surge in the share price of his telecommunications company America Movil has pushed him ahead of both Gates and Warren Buffett. At his current rate of financial expansion, Slim could be the world's first trillionaire as early as next year.

Slim has had a stellar year so far increasing his wealth by a staggering $3.5 billion each month. As well as seeing success with America Movil which is the predominant wireless operator in Latin America, his other main company Telmex (which has cornered the Mexican market in fixed line telephones) is up 34 per cent this year. His bank Inbursa also saw its stock jump by 20 per cent.

Carlos Slim Helu is a 67 year old native of Mexico City. His father Julián Slim Haddad Aglamaz was a Lebanese Maronite refugee who fled to Mexico in 1902. Julián established a dry goods store and prospered in real estate. When he died, he left a large inheritance to his six children. Carlos was born in 1940, the youngest of the six. He used his share of his father’s money to enter business after graduating from the Universidad Nacional Autónoma de México in 1961 with a degree in engineering. Slim dabbled in a number of different companies across many industries including telecommunications, retail, banking and insurance, technology, and auto parts manufacturing.

Slim had the happy knack of finding undervalued companies and making them profitable. This ability earned him the tag of "Warren Buffett of Latin America." When he bought Telmex he was criticised for immediately raising phone costs. However he also improved phone services by offering local and long distance calls, mobile phone services, internet services, and a telephone directory. His empire now includes telephones, cigarettes and parts for crude oil platforms.

It is difficult to live a day in Mexico without buying one of his products. Mexicans use electricity carried by his Condumex brand cables, drive on roads paved by his CILSA construction company firm and burn fuels pumped from his Swecomex drilling platforms. They communicate through Telmex phone lines, smoke Slim's tobacco sold under the Marlboro brand, and shop at Sears Roebuck of Mexico, a subsidiary of his Carso Group.

Slim’s wealth is now worth 6.3 percent of Mexico's annual economic output. This in a nation where per capita income is less than $6,800 a year and half the population lives in poverty. His critics describe him as rapacious monopolist who built his empire on suspicious ties to Mexican presidents and other politicians. He owns 90 percent of the landline phone business, and 73 per cent of the mobile market. Although often portrayed by Mexican media as a gluttonous, insatiable tyrant, his supporters counter these claims by pointing out he has never been investigated or charged of bribery, peddling influence or any other scandal.

Nonetheless Slim has faced increasing criticism from many quarters in Mexican society In Mexico’s 2006 federal election, the leftwing candidate Andrés Manuel López Obrador claimed he would remove unfair privileges of elites such as Slim. Some doubted Obrador’s claim given that he had worked closely with Slim to re-generate Mexico City’s central district when he (Obrador) was mayor. In any case, Obrador lost the election. Of perhaps more concern to Slim was the criticism by Mexico's Central Bank chief Guillermo Ortiz. Ortiz complained that despite ten years of deregulation, Slim’s monopolistic telephone company cramped the nation's competitiveness by charging some of the world's highest rates.

Like fellow multi-billionaires Gates and Buffett, Slim will now face even greater pressure to give away more of his wealth. Slim has responded with a PR campaign centred around $4 billion in charitable donations and scholarships. Slim is also developing a plan for propelling Mexico out of economic stagnation called the Chapultepec Accord. His idea is to push "the development of Latin America through the development of human capital and structural investment." Damien Fraser, chief Latin America equity strategist at UBS Warburg, says the move is half altruistic and half self serving. “Mexico has become a much more democratic country, so it's no longer sufficient to have a good relationship with the president and the finance minister to make things work the way you want,” he said. “You need to have many more levers of power."