World’s richest man stays calm under fire

Carlos Slim is under attack. For decades, the world’s richest man built a business empire in his native Mexico with little resistance from the competition. Today, the government and rival companies are determined to loosen his near-monopolistic hold on the country’s telecommunications sector, which has helped Mr. Slim accumulate a personal fortune estimated at more than $80-billion (U.S.). Over the past three months, his Mexican mobile phone operator Telcel has been fined $1-billion for “monopolistic practices,” the government has thwarted his attempts to enter the pay-TV market and rivals have chipped away at his core business. Yet, despite the pressure from regulators and competitors, the 71-year-old appears remarkably calm when we meet at the head office of Inbursa, his Mexican bank. The room is hung with canvases showing pastoral scenes, a window looks out on to a drab urban landscape, while a bookshelf covering one wall is crowded with Spanish classics, biographies of great financiers such as Bernard Baruch, and a row of dog-eared volumes of baseball statistics, one of his passions. Yet even as others are trying to shrink his vast wealth, Mr. Slim is pondering how to put it to best use when he is gone. “Read this,” he says, pulling out a well-thumbed edition of Kahlil Gibran’s The Prophet, that staple of student spirituality. He points to a line on page 487: “You give but little when you give of your possessions.” Mr. Slim, with carefully combed hair and wearing an open-neck cream cotton shirt with button cuffs, was, until recently, too busy making money to worry about how to give it away. His telecoms business America Movil spans 19 countries and has more than 276 million customers. Together with the mining, real estate, tobacco, airline, banking and other companies that he controls, Mr. Slim’s businesses make up 40 per cent of the Mexican stock market. “When I go, I will be naked. So what do I do?” he asks rhetorically. “Do I give the companies to my children? That’s a responsibility. Do I leave them 90 or 98 per cent of my wealth? Absurd. If I sell, who would buy – a foreign company? So, do I give it all away to Mexico instead?” Famed for reading a balance sheet like no one else, Mr. Slim performs a quick mental calculation. “After tax, that would be $300 for every Mexican. It’s mere charity.” Such musings by a multibillionaire would resonate anywhere. But they are particularly delicate in a country where almost half of the 112 million population lives in poverty. Many see Mr. Slim as partly responsible for this gulf that divides rich from poor. Critics say his dominant position in telecoms keeps prices high and stifles competition. Alongside other Mexican oligarchs, the argument goes, Mr. Slim has stunted development, leaving Mexico to lose ground to other emerging economies, such as Brazil. Despite such charges, and the government’s offensive, Mr. Slim is not a hate figure. One of the country’s biggest employers, a recent poll found that Mexicans see him as the “great leader that Mexico needs.” And, in a recent book, Jorge Castañeda, the Mexican intellectual and former foreign minister, described Mr. Slim as “unusual among Mexican magnates. … He is generous with his time, not always with his money, but is a disarmingly accessible, discreet and good-natured tycoon.” Rather than charity, Mr. Slim believes the solution to Mexico’s problems, and his own conundrum, is more investment, especially among small businesses as they create the most jobs. It is an apparently contradictory claim given criticisms that his own market dominance squashes smaller players. “Human beings are contradictory,” he shrugs. Despite this ambivalence about philanthropy, he has set up two charities, Fundacion Telmex and Fundacion Carlos Slim. With a general focus on child development and early schooling, they provide the complementary investment in human capital that Mr. Slim sees as essential in a world increasingly dominated by sophisticated service industries. “A lot of people make money out of poverty – studies, conferences, NGOs – it’s a massive business,” Mr. Slim observes. “The answer is jobs, jobs, jobs. Work is the only way to dignify the receiver. It meets an emotional need. And it encourages development.” Mr. Slim breaks off the conversation and heads to a small bathroom in the corner of his office. He does not bother to close the door. Arturo, his son-in-law, who has been sitting quietly smoking, smiles wryly. Despite his fortune, the world’s richest man is surprisingly down to earth. Known for his simple tastes, he only recently bought his first property outside Mexico – a New York townhouse on the Upper East Side. Otherwise, he lives in the same Mexico City house that he first moved into 40 years ago. He never remarried after his wife died in 1999 of kidney failure, and always dines with his six children on Sundays. He even drives his own car. That might seem eccentric, or plain rash, in a country increasingly associated with drug-related crime and kidnappings. But such parsimony is in keeping with his Warren Buffett-like value approach to investing. One of Mr. Slim’s best deals came after he bought heavily into Brazilian telecoms just as that country’s market crashed in 2002. Good timing is a Slim family trait. His father, an immigrant who fled violence in his native Lebanon, made good after founding a general store during the Mexican Revolution and then selling the business just before the great stock market crash of 1929. Mr. Slim is also one of world’s biggest collectors of Rodin and this year included some of the French impressionist sculptor’s works in a free museum he opened in Mexico City to house part of his art collection. In Mexican art circles, it is said, perhaps apocryphally, that he has calculated the average cost per kilogram of Rodin’s works. Mr. Slim certainly knows a good deal when he sees one. Indeed, he has proved himself as adept a competitor abroad as he is a monopolist at home. “Conquerors used to extract tributes; now they extract dividends,” he likes to say. The plumbing gurgles and Mr. Slim returns to the room. When he sits down again, he seems so at ease that you would never know that some people wonder whether his fortunes are turning. On the day of the interview, regulators fined him another $90-million. Mr. Slim is unfazed. “I don’t feel persecuted,” he says. “I never felt persecuted as a child, I don’t feel persecuted now.” Instead, sipping tea from the same chinaware used in his mid-market Sanborn’s department store and cafeteria, Mr. Slim keeps his cool. Even the country’s drug war, which has claimed 40,000 lives over almost five years, has not changed his daily routine. “My life is exactly the same as it was five or 10 years ago,” he says. In a show of pride for the country in which he made his fortune, the billionaire adds: “Anyone who isn’t investing now is missing a tremendous opportunity.” He should know: During the first three months of this year, Mr. Slim increased his fortune by about $8-billion. Extrapolate from that performance, and he has just ended an interview about $7.5-million richer than when it began two hours before.

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