Summary
Seldom will you find a Mexican commentator brave enough to write about Carlos Slim, the third wealthiest person in the world, and the growing Empire he presides (which includes not only the telecomm and IT industries, but also banking and insurance, retail sales, construction, vast real
estate holdings, infrastructure, ground- and air-transport and freight, among other crucial areas, in Mexico, the US, the rest of our continent and elsewhere). But Denise Dresser (Ph.D., Princeton), is an exception to the rule.
Analysis
Dr. Denisse Dresser has chosen to unveil the hidden scenario behind "the Engineer" (as he prefers to be called) in his quest to augment his fame and fortune before, during and after Mexico's traumatic Presidential elections, for Reforma newspaper in a brilliant column that appeared yesterday, Monday Sep. 25.
Slim, an extraordinarily crafty businessman with friends in very high places, has made a public
reapparance by criticizing his former ally and former Mexico City mayor Andrès Manuel Lòpez Obrador, even referring to the losing candidate's post-election strategy (and that of his followers) as 'insanely kafkaesque'. But where Dr. Dresser's intelligence really takes flight is when she discusses the overall implications behind the fact that one single person possesses unrestricted control of vital economic areas such as the aforementioned telecomm industry, the behavior of the Mexican Stock Exchange or the shifting price of his publicly traded spinoffs.
What it boils down to is whether it benefits the national and regional interest to have one single
volition impacting directly realms as disparate as the economy and politics, media and advertising, or something as crucial as the pockets of low-, middle- and high-income consumers, in a ruthless form of jungle capitalism.
In the long run, crony capitalism may be unable to sustain this Gilded Age. Rather, the potential for boomerang effects is dangerously high.
Lopez Obrador's public demonstrations and citizen camps clogging the city's main arteries are a
Kafkaesque folly, declared Carlos Slim, a firm supporter and prime beneficiary of Loppez
Obrador's urban programme when Mr. Lòpez was still Mayor.
What is really Kafkaesque in its true dimension, Dresser reasons, is Mr. Slim's insistent support for the establishment of an interim government in the face of postelectoral uncertainty -a scenario which would usher in a chaotic political situation for Mexico but would undoubtedly redound to the ultimate advantage of Mr. Slim's business interests, in view of the regulatory, legal and enforcement paralysis that would ensue.
As truly Kafkaesque as the fact that Telmex (Slim's crown jewel) consistently opposed, actively lobbied and fought against tougher antitrust legislation which nonetheless was approved by both Houses, only to be contested by President Fox's own Attorney General... "Nobody wants to face up to Slim, but the new Administration must do so, because the Engineer's power and predominance are symptoms of the crisis the country is currently going through", remarks
Dresser.
After leading a much-ballyhooed "Civil Society Initiative" (sic) for the drafting of a National
Agreement as signed by 5000 leading figures in the public and private sector (very distant from a
true grassroots initiative), and after touring the country extensively in its promotion, Slim then chose to disappear from the public eye. Only recently has he been back in the news when he met twice with winning Presidential Candidate and future President Felipe Calderòn. He is still making every single effort (along with loyal allies of the Ministry of Communications) to lobby current President Fox passage of the Ministry's draft ruling that would authorize Telmex to offer 'triple play' services by removing the 16 year-old restriction for Telmex to provide video services,
regardless of its well known predatory anticompetitive practices, and the firm collective
opposition of the Federal Antitrust Commission, the Federal Telecommunications Commission, and (most telling) the entire cable industry which, boasting 4 million suscribers and over 500 TV cable license holders with geographically limited licenses, will hardly be able to compete against a National incumbent which holds a 95% market share of wirelines (over 20 millionlines), and a similar share in broadband connections: a killer combination that gives it at least five times more bargaining power in the search for cheaper programming.
We could continue providing Kafkaesque variations of the norm consisting of Government officials,
presidential candidates,and omnipotent monopolies in the 16 years since Telmex and its affiliates were acquired by Carlos Slim, but one gets the picture. And the final outcome? A Mexican multibillionaire in the hunt for the number 1 slot in the world of Forbes and Fortune, feeble competition, high prices, extremely low penetration of telephone lines and broadband, shameful
rural communications, captured regulators as hostages and prisoners to the whims of One True and Successful voice; vertical and horizontal integration, a timorous securities market, and non-existing incentives for 'disruptive' technologies such as wi-fi (backhaul, not only hotspots) and VoIP, highly concentrated spectrum with no policy behind, plus losing battles in all fronts against
productivity and economic inefficiency.
So in conclusion, yes I do believe it is high time to slim down Mr. Slim for the sake of Public Interest and within the boundaries of Due Process of Law.
