Carlos Slim isn't just Mexico's richest man he possesses an astronomical 8% of the country's GDP. So it's not surprising that Eduardo Garcia, one of Mexico's most respected business journalists and the editor-founder of the online financial publication Sentido Comun (Common Sense), last year started a quarterly feature called Slim Watch. It tracks the telecom baron's swelling fortune as well as his companies' alleged monopolistic practices. And this month Slim Watch claims to make it official: Slim, 67, has now passed Microsoft founder Bill Gates as the world's richest man.
Earlier this year, Forbes Magazine reported that Slim, at $53 billion, had surpassed investment guru Warren Buffett as No. 2, but still behind Gates and his $56 billion. Since then, however, the rising value of stock in Slim-controlled giants like Telmex, Mexico's largest telephone company, America Movil, Latin America's largest cell phone company, as well as numerous other holdings from retail to offshore drilling rigs have raised Slim's wealth to almost $63 billion, Garcia reports. "My numbers are much higher than Forbes'," Garcia concedes, adding that he would also put Gates' current fortune at $59 billion. "But based on what is publicly traded in Mexico, I'm certain this is an accurate calculation [of Slim's wealth]." Forbes has not yet said if it will revise its list as a result of Garcia's report.
Garcia's math has also grabbed the attention of federal regulators in Mexico, who finally have a substantive antitrust law at their disposal to pursue companies suspected of monopolistic market control a chronic bane of the Mexican economy. The Federal Competition Commission has announced that it will soon begin an investigation into whether Telmex, which has about 90% of Mexico's landline market, and America Movil, which has more than three-fourths of the country's wireless subscribers, are stifling competition in an industry that is the linchpin of any 21st-century economy. Sanctions could include stiffer regulation that would curb any anti-competitive practices: Telmex, for example, has been accused by potential rivals in the past of thwarting competition by charging especially high interconnectivity fees.
Telmex and America Movil deny they've engaged in any monopolistic practices and have pledged that the commission's probe will bear that out. And Slim, to his credit, has made certain concessions of late, such as agreeing not to expand into cable television until Telmex allowed competitors to hook up to its telecom network. But critics say the tougher scrutiny of Slim is long overdue. "Mexicans on the one hand are rightly proud that we have such a talented businessman with such a keen mind," says Garcia. "But nobody feels proud of the awesome wealth disparity that he represents." Mexico has more billionaires than Switzerland, but almost half its population of 108 million people lives in poverty.
Slim, the son of Lebanese Christian immigrants, started his financial ascent by forming his own brokerage firm when he was in his early 20s. He branched out shrewdly and prodigiously, buying up a dizzying array of businesses that he stuffed into his Grupo Carso holding company. The door to superwealth was opened in 1990 when Telmex, then the government telephone monopoly, was privatized: a Slim-led international investor group bought it for $1.7 billion, and today it's worth almost $40 billion. America Movil is worth almost three times as much. But Garcia charges, Slim's inordinate dominance has meant that, according to the Paris-based Organization of Economic Cooperation & Development (OECD), Mexico's telecom customers pay some of the highest rates in the world. "If not for those rates," Garcia insists, "Mexican businesses would have generated better profits and could have paid their workers better. Mexico would have been a more efficient economy."
Still Garcia and other Mexico business watchers agree that Slim has just done what any tycoon would do and that the real blame lies with the Mexican government's notorious indulgence of monopolies. President Felipe Calderon was elected last year on a platform that included cracking down on those economic behemoths. Meanwhile, all the talk about the Competition Commission's upcoming probe has sent Telmex's share price tumbling more than 5% in recent days on the Mexico stock exchange, the Bolsa. If the slide continues, Slim could find himself No. 2 again.