Vicente Fox and Carlos Slim on the economy of Mexico
By Barnard R. Thompson
Mexican magnate Carlos Slim Helu, the richest man
in Latin America, cuttingly criticized the government of Vicente Fox Quesada and the economic course the president is steering
during a March 23 speech to industrialists and entrepreneurs in Mexico City. Scathing
to the degree that Fox, who was on a state visit to Honduras at the time, gave in to his compulsion to hastily fire back —
an all too frequent quirk and practice. However in this case it offers an opportunity
to look at Mexico’s economy from two distinct spins and points of view.
Carlos Slim [63] is the chairman of Grupo Carso,
a Mexican conglomerate that today ranges from North America to Tierra del Fuego. But
it was in 1990 when Slim’s fortunes went from those of mortal men to astronomical levels, when former President Carlos
Salinas de Gortari [1988-1994] gave him a sweetheart deal to purchase Teléfonos
de México (Telmex), the Mexican national telephone company.
In fact the deal was so good many wondered if Slim
might have had a hidden presidential partner? One of the jests of the day was
to call Telmex “Carlos and Charlie’s,” a play on words from the shared first name of Salinas and Slim coupled
with a popular restaurant chain.
In his recent speech, titled “Growth with jobs
or populism?,” Slim called for what he said is Mexico’s failing neoliberal economic model to be updated as its
lack of economic results is bringing on a “social fatigue and nostalgia for populism.” Furthermore, “in some cases (the model) is moving towards authoritarian governments,” he said.
In order to avoid populism and authoritarianism,
Slim called for changes that will allow ever-greater economic dynamism. What
is needed is a vision of the future, with ideas and plans that will allow Mexico to keep from making errors and face globalization
rather than obstacles, he said.
The social orientation of public spending must focus
on education, as well as on the construction of infrastructure needs and housing, he said.
These things bring about development and growth.
Slim added that public funds should not continue
to be used to finance expenditures such as the system of pensions for public employees.
The development of Mexico should be supported, among other means, through internal savings, national companies, transparent
public financing, reduced government spending and the elimination of labor liability quotas, he said.
Slim also said that in the last 21 years the per
capita income of Mexico barely grew at a rate of 0.3 percent annually. “And
that is thanks to 10 million Mexicans having gone to the U.S. who sent back US$14 billion,” he stated.
In response, Fox said from afar that the businesses
of Grupo Carso have been prospering quite well thanks to the climate of economic stability in Mexico. “The companies of Mr. Slim had a very important growth last year, and therefore I do not quite understand
what he is referring to when he says that the model is not working.”
The president said that Mexico’s economic model
“is not neoliberal, it is a market model but one with social responsibility.”
In response to a question during a joint press conference
with Honduran President Ricardo Maduro Joest, Fox stated: “I am of no mind to argue with Carlos Slim, (however) ours
is a model of macroeconomic financial stability, of fiscal and monetary discipline, that is now yielding important and valuable
fruit for the people, for the citizens and families of Mexico.”
Fox also said, with respect to housing, that 575,000
homes will be built this year, more than doubling those constructed in past years. This
is being done thanks to macroeconomic stability, as well as interest rates and inflation levels that have returned the purchasing
power to workers.
The president called attention to February’s
trade balance, when non-petroleum exports rose 10.5 percent. That was the third
month in a row that Mexico registered an important growth in exports.
The maquiladora industry is also growing again. The president pointed out that 18 months ago there were reports of maquilas leaving
Mexico, “and with the same emphasis I want us to now talk of the growth in jobs and exports of maquiladoras, that show
a true recuperation of the Mexican economy.”
Fox said that Mexico’s latest biweekly labor
statistics reflected an ongoing increase in formal employment. Some 34,000 new
jobs were created in the past 15 days, which means in four fortnights Mexico will exceed 200,000 new jobs, a rhythm far superior
to recent years, the president claimed.
