Slim's pickings

Observations on the rich list

Bill Gates has been deposed. And poor Warren Buffett is now only third. A Mexican, Carlos Slim Helú, has, according to Sentido Común, a Mexican online newspaper, moved ahead in the game of Monopoly played by the super-rich. Slim is now the world's richest man. Does this mean Mexico is going places? Sadly not. Slim is going places. Most Mexicans aren't. Except illegally over the border to the US.

They ought not to be so poor. As Slim's ascent shows, Mexico is not without money. A vast country, it is one of the world's largest oil producers. The economy is roughly the world's tenth biggest. Its executives are among the most highly rewarded in the world. And pay little tax. Yet, for most of the country's 108 million people, tax is not the issue. Income is. About 45 per cent of Mexicans are very poor, according to the World Bank.

State education is underfunded and ill-managed. Health care is a lottery. Work is in short supply and poorly paid. In the countryside, the average weekly wage is 500 pesos, less than £25. Which is why Mexicans cross illegally into the US to find work. Their country lets them down.

It does not let Slim down. The son of Lebanese immigrants, he has made his money Buffett-style, with astutely timed purchases of shares and companies throughout the continent. The privatisation in 1990 of Telmex, the state-run telephone company, was his biggest coup. He turned the state monopoly into a private one. His political influence has helped maintain Telmex's control of the phone market.

Through another company, América Móvil, Slim has built a dominant position in Latin America in mobile telephony. In the poorest of villages, where Telmex has not yet installed landlines, you see peasant families with mobile phones, paying exorbitant tariffs. Millions of poor Mexicans contribute to the enormous fortune of one Mexican.

Slim's extraordinary success aptly demonstrates what is wrong with Mexico. It is one of the world's most unequal countries. According to the UN Human Development Report, the richest 10 per cent of Mexico's people enjoy 43 per cent of its national income, while the poorest 20 per cent get just 3.1 per cent. The country's wealth is concentrated in a few, powerful hands. Congressmen are easily won over.

Slim's fortune, now estimated at $67.8bn by Sentido Común, is equivalent to roughly a twelfth of Mexico's gross domestic product.

But although far exceeding Gates and Buffett in his share of national wealth, Slim does not match them in charitable giving. However, he has stepped up his efforts greatly in recent months. In March, he announced that his companies would increase their charitable endowments to $10bn in the next four years.

This falls far short of Gates's growing charitable commitment and Buffett's intention to leave his entire fortune to charity. Philanthropy was never Slim's game. He prefers Monopoly.

This article first appeared in the 16 July 2007 issue of the New Statesman, Chavez: from hero to tyrant