by Griselda Nevárez
George Washington University should rescind its invitation to the world’s richest man, who is scheduled to receive an 2012honorary degree at that institution’s May 20 commencement, a coalition of Latino leaders said May 8.
Latino advocates from across the nation launched the coalition, that they say exposes how Mexico-native Carlos Slim, who controls most of Mexico’s telecommunications, has become the world’s richest person through alleged monopolistic practices at significant cost to the Mexican people.
But at least one economist who specializes in Mexico said Slim is but one manifestation of a much larger cultural problem in that country that encourages cartels in all sectors of its economy.
During a May 8 press conference at the National Press Club in Washington, D.C., members of the Two Countries One Voice coalition accused Slim of exploiting and stealing money from Mexico’s most needy.
“Much of the wealth that he has amassed has been at the direct expense of the rural communities of Mexico and those who have no options,” said Juan José Gutiérrez, one of the coalition leaders. “That, in return, has resulted in Mexico’s economic development being delayed.”
For three straight years, Forbes magazine has named Slim the world’s richest man. The magazine reports the 72-year-old’s net worth at $69 billion, most of which comes from his telecommunications company América Móvil.
The company controls 80% of Mexico’s landlines and more than 70% of the country’s mobile phone market.
América Móvil spreads to 18 other Latin American countries. With 242 million wireless subscribers and 58 million fixed-line subscriptions, including phone, cable TV and Internet, it is Latin America’s top mobile carrier and the world’s third largest operator .
Over the years, Slim has made major investments in several U.S. companies, including Saks Fifth Avenue and Sears. He even owns 8 percent of The New York Times Company.
U.S. INVESTMENTS CITED
Worried over Slim’s increasing investment in the United States, members of Two Countries One Voice told reporters they will host actions against U.S. institutions and companies that have strong ties with the billionaire.
On May 8, it announced its first action, calling on George Washington University to break its relationship with Slim.
In a letter requesting to meet with the university’s president, Steven Knapp, the group asked that GWU dis-invite Slim to its May 20 graduation ceremony, where he is to receive an honorary degree. In 2009, the university awarded Slim the President’s Medal for his philanthropic work.
Andrés Ramírez, also a member of the coalition, described Slim as “a modern day robber baron” and said granting him the honorary degree sends the wrong message.
“It gives people the wrong impression that this guy is okay, that it’s okay for people to interact with him and that it’s okay for people to take contributions from him after he’s stolen money from the people of Mexico,” Ramírez said.
Candace Smith, the executive director for the university’s media relations, didn’t indicate whether Knapp plans to meet with the group. In an email, Smith said George Washington University “is looking forward to Mr. Slim’s participation in commencement.”
CUSTOMERS ‘OVERCHARGED’
She added that Slim was invited to receive the honorary degree “in recognition of his contributions to business and community development in Mexico and Latin America, and his extensive philanthropic work, which has led to improvements and investments in education, health care, employment and the fine arts, among others.”
Two Countries One Voice was formed in January, following the release of a study that revealed Slim’s América Móvil overcharged customers $13.4 billion a year from 2005 to 2009. The study, which was conducted by the Organization for Economic Co-operation and Development, also found that a lack of competition in Mexico’s telecommunications industry has led to low infrastructure development and ineffective telecommunications markets that have cost Mexico’s economy $129 billion.
The study came a year after Mexico’s competition regulator found that Slim’s company had been carrying out monopolistic practices by charging its customers higher fees for making calls to phones operated by other networks.
After a one-year battle, the Federal Competition Commission said May 4 it will drop the nearly $1 billion fine only after Slim cuts the extra
charges on its competitors.
‘SLIM IS NOT TO BLAME ’
Jorge González, a former economics professor who studies Mexico’s economy, said Slim’s América Móvil is not a monopoly, but rather an example of a sector in Mexico that is highly concentrated by one company. He asserts that instead of going after one particular person, the blame should be placed on barriers that prevent others from being able to compete in that same sector.
“The message should focus on developing policies that enhance the number of competitors in the marketplace because, ultimately, more competition will lead to better services and lower prices for consumers,” said González, who is Vice President of Academic Affairs at Occidental College in Los Angeles. He added that though América Móvil has been highly criticized for having major control over Mexico’s telecommunications, the company is credited for increasing a stronger telecommunications link among Mexicans over the last 25 years.
“Despite all the problems and despite the high prices, more Mexicans now have access to landlines, cellular telephones and internet than ever before,” he said. “More competition, however, would likely to lead to even better services.”
