Carlos Slim: five keys to growth. Carlos Slim: five keys to growth.

Five keys for growth, according to Slim

Mexico has wasted opportunities to reinvest, businessman tells summit

Over the past 30 years Mexico has not taken advantage of its opportunities to drive economic growth, Mexico’s richest man said Sunday at the 2017 Mexico Business Summit in San Luis Potosí.

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Carlos Slim Helú — majority owner and chairman of Grupo Carso, América Móvil and Telmex — said that Mexico had not managed the oil boom of the 1980s and ’90s well because it spent rather than invested US $50 billion of income and went into debt for a similar amount.

He also said that large amounts of investment capital that have flowed into Mexico over the past decade as a result of the North American Free Trade Agreement (NAFTA) were not reinvested and that the content of many exports is not Mexican-made.

Considering options to turn the situation around and stimulate future growth, Slim identified five key areas:

1. Create employment

Slim said Mexico needs a better educated, rising middle class with higher incomes in order to stimulate consumption and strengthen the economy.

To achieve it, he said, more labor-intensive projects are needed, citing as an example the construction of the new Mexico City airport, in which he has a personal interest as a contractor. The massive infrastructure development will have a spillover effect on salaries worth 50 billion pesos (US $2.6 billion), he said.

Slim also suggested that a three-day work week would generate more employment because “one person would work three days and another the other three days.”

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2. Refocus public spending on social programs

Spending on health and education is irreplaceable, according to Slim, but he said that social expenditures should be reviewed, arguing that a salary or salary in kind may be of more benefit to certain sections of the population than government programs.

“We must look at how social programs can be transformed into a salary in kind for certain groups in society who are not integrated in the formal economy — housewives, for example,” he said.

3. Change the education model

The education system is too dogmatic, Slim said, because it favors rote learning over research and debate. He also said the internet could be used as a tool to counteract a trend in which students leaving school early to enter the workforce.

“People could study online, without the need to travel to school. At Telcel we’ve rolled out a platform that enables people to connect and access educational content without having to pay for the use of the network,” he said.

4. Investment in telecommunications infrastructure

Mexico has the lowest market penetration for internet in Latin America with 30 million people who should be connected but aren’t. Not providing telecommunication services to them “is a big mistake,” Slim said.

He pointed out that a 2013 telecom reform that introduced different regulations on Telmex and Telcel compared to those of its competitors because of its preponderance in the market (more than two-thirds market share) acts as a disincentive for his companies to fill the gap.

“. . . If we go into the areas where there is still no coverage we would have 100% of the market and we would be preponderant.”

He also took aim at competitor AT&T for not stepping up to provide greater telecommunications coverage across Mexico, saying that the company “wants to get on to the Telcel and Telmex network but doesn’t want to invest.”

5. Urban redevelopment

Finally, Slim argued that cities need to be redeveloped so that people can live, work, study and have access to recreation without having to travel excessively.

Source: Expansión (sp)

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  • geonomist

    If government is to play a role in reaching Slim’s goals, there’s only two things it can do–tax & borrow to raise money, and then spend it. Government should abolish all dumb taxes that shrink their base–taxes on sales (IVA), buildings, income, business, etc. Instead, it should tax (or lease) use of locations, extraction of resources, and pollution of the environment. Doing that will generate jobs. Recovering location value in urban areas will make it easy to redevelop in ways that don’t favor the car but bikes, mass transit, urber, etc. For infrastructure, auction off tele-comm rights for say 10 years. For schooling and other social programs, lose the bureaucracy and just pay citizens a monthly dividend. Studies show empowered parents do a much better job. Mexico would become the Tiger of the Americas.

  • WestCoastHwy

    Carlos Slim Helú what a frigging genius. That means stop the large loud band parties you have been throwing with all your profits!

  • Chris Gonzales

    Senor Slim should purchase all the uniforms and school books for every student…as they are a big expense and burden for many families in Mexico. He supports improving education, and this would be a good first step.

    • Güerito

      He could rebuild every damaged structure in the country, including schools, homes and other private buildings, with just a fraction of his ill-gotten billions.

      • Vernon King

        Hardly. What you say is a lot of money even for Telmex man.

        • Güerito

          The cost of reconstruction for both the 9/7 and 9/19 quakes has been estimated at about 2 billion USD.

          Like I said, just a small fracture of his ill-gotten billions.

          • Vernon King

            Carlos owns lots of shit but I doubt if he has 2 billion hanging around in cash ready to be handed out if that were possible. Sorry I am real about rich people and you are not.

  • Güerito

    Why would anyone take advice from Slim, who made his billions using his contacts with former corrupt PRI regimes? And who continues to make billions using his contact with the current corrupt PRI regime??

    • Vernon King

      Because his advice is good.

      • Güerito

        He never mentions corruption, impunity, and extremely high levels of income inequality.

        These are what are holding back Mexican economic development.

        • Vernon King

          Very true I don’t deny it but his advice was not bad is all I am saying. I don’t hate him buts lots of folks do.

  • From South of the Border

    The Mexican government is incapable of doing any of the things that Slim laid out. Unless or until the Mexican people hold their government to account for the corruption and other criminal activities. The problem is that all of my Mexican friends just keep on saying “this is Mexico” with a shrug of their shoulders.Until that changes nothing else will. Just like the other article in the Mexican Daily News. Business group to ask for minimum wage hike to 95 pesos a day big deal!! The minimum wage should be hourly like 95 pesos an hour or something like that, but the skin flint business owners here in Mexico would rather pay about $5 dollars a day, are you kidding that is a disgrace. Until real unions take hold and real change comes that ends most of the corruption Carlos Slim is blowing smoke and dreaming a fools dream! By the way Carlos Slim is one of the reasons that people are paid nothing since he has been a big part of the corruption in the Mexican government. What people don’t understand here is only a people who are willing to fight for what they want will actually get what they want.
    I am teaching two engineers right now getting them ready for the TOEFL exam the last thing they need is a good score in order to be allowed to immigrate to Canada and Australia. Right now one of these engineers is paying for a 200 Square meter house. ( Sorry, but back home that would be a doll house.) He has a friend from Queretaro who already has been in Brisbane, Australia for 5 years and he is paying for a 550 Square meter house more than double the size of his house in Mexico. These 2 engineers and their families will probably be in their new countries around February or March. Both men say they hate to leave their country, but they say they want a better life for their children all of which are under 4 years old. These children will be bilingual, but more important they will be able to become what ever they want to be unlike here in Mexico where the government and people like Slim hold people down earning just about nothing. Please give me a break with Slim making out like he cares even a little for the average Mexican! What a Crock!!

  • alance

    The Feds attempted to take control of education with mixed results. In several states the underpaid teachers have been teaching anarchy to their students by setting up roadblocks and stealing buses. It has turned into a political nightmare. These anarchists need to be sent to prison.

    Unfortunately, the prisons are even a worst disaster. Law enforcement and prison employees are also underpaid and ripe for corruption while the oligarchs count their billions.

  • Dave Warren

    Raise the minimum wage so the people have money to spend. Tax the wealthy and redistribute. The economy would take off.The rich in Mexico should share and stop being so stingy on wages. They can easily afford it.

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