This letter was published in a Mexican newspaper (probably in Mexico City) on February 15, 2009. Denise Dresser (at left) is a journalist and a political science professor, but that's all I know of her. The Spanish version of this is in my other blog. It was not easy to translate. Open letter to Carlos Slim: By Denise Dresser
Dear Sir: I write this as a citizen, a consumer, a Mexican worried about the destiny of my country and about the role you play in its present and its future. I have thoroughly read every word you pronounced in the Forum “What To Do To Grow” and I have reflected on their implications. Your position about diverse themes made me remember that famous phrase attributed to the president of General Motors that said: “What’s good for General Motors is good for the United States." And I believe that you think something similar: what is good for Carlos Slim, for Telmex, Telcel and Grupo Carso is good for Mexico. But it is not so. You perceive that you are part of the solution when actually you are part of the problem; you think yourself a statesman with the capacity to diagnose the evils of the country when you have actually contributed to produce them; you see yourself as an indispensable rescuer when you are actually a critical obstacle. There the contradictions lay, the lapses and distortions that plagued your speech. You say that it is necessary to transform an urban and industrial society to one tertiary society, of services, of technology, and of knowledge. That is certain. But in Mexico, that transition becomes difficult in proportion with costs of telecommunications that are so high: where telephone service is so expensive, and penetration of broadband Internet is so low. That is the result of the dominance that you and your companies have in the market. In a few words, in the speech, you propose something that you are actually dedicated to prevent. You emphasize the imperative to foment productivity and competition, but throughout the years you have fought and been protected in courts before regulatory efforts that look for precisely that. You applaud competition, but only as long as it is not promoted in your sector. You say that it is not necessary to worry about the growth of the Gross Domestic Product; that the most important thing is to take care of the jobs that people like you provide. But it is indeed the lack of economic growth that has been behind the low generation of jobs in Mexico for years. And the lack of growth is directly tied with the persistence of anti-competitive practices that people like you justify. You send a message that foreign investment must be viewed with fear and ambivalence. You say that “the modern companies are the old armies; armies that conquered territories and received tribute." You hope that we do not enter a stage of “Sell Mexico” to foreign investors and you lobby so that foreign investment is not allowed in fixed telephone services. But at the same time, you have just invested millions of dollars in the United States: in The New York Times, the Saks stores, and Citigroup. From this incongruous perspective, foreign investment is worthy and must be applauded when you invest in another country, but it must be rejected in Mexico. You reiterate that “we need to be competitive in this society of knowledge and we need competition; I am in agreement with competition." But at the same time, in recent days, you have shown your open opposition to an effort to foment it, disqualifying, for example, the Plan of Interconnection that looks for a level playing field. You say that it is indispensable to help small and medium-sized companies, but simultaneously, your company - Telmex - imposes high costs of telecommunications on those same companies that impedes their growth and expansion. You say that the middle-class has grown smaller, that “people do not have income", that there must be better distribution of income. The diagnosis is correct, but it is surprising to see the lack of understanding on how you contribute to that situation. The president of the Federal Commission on Competition explains it with great clarity: consumers spend 40 percent more than they would through the lack of competition in sectors like telecommunications. And the poor pay an even higher price. You suggest the main reasons for Mexico’s troubles reside in the government: the inefficiency of the governmental bureaucracy, corruption, the inadequate infrastructure, the lack of access to financing, the crime, and the public monopolies. Without a doubt all of this contributes to the lack of competitiveness. But private monopolies like yours also contribute. You speak of the necessity “to review an economic model imposed as if it were ideological dogma" that has produced mediocre growth. But indeed that model - of regulatory insufficiency and governmental collusion - is the very one that has allowed people like you to accumulate the fortune that you have today, estimated at 59 billion dollars. From your point of view, the model is bad, but it is not necessary to change it in whatever particular form it allows you to accumulate wealth. A precise review of your words and of your performance for more than one decade reveal a serious problem: there is a breach between the perception that you have of yourself and the injurious impact of your performance; there is a contradiction between what you propose and how you act; you suffer a myopia that lets you see the straw in other people's eyes and to ignore the beam in your own. You see yourself like a great man with great ideas that deserve to be listened to. But that day before the deputies, before the senators, and before public opinion, you did not speak of the great investments that you were going to make, of the fantastic projects of infrastructure that you were going to promote, of the jobs that you were going to create, of social commitment in the face of the crisis which you would engage, of the characteristics of the new economic model that you would promise to support. In place of it, you threatened us. You spoke – in words more or less to the effect – that the economic situation would get worse and that in the face of that, nobody should touch your business, nobody should regulate it, should question it, should force it to compete. And, since on the following day the government published the Plan for Telephone Interconnection that would seek to force competition; you, in response, announced that Telmex would trim its plans for investment. You, of a whole body, acted like someone ready to do damage to Mexico if he does not obtain what he wants, when he wants it. You had the opportunity to grow and instead you shrank. Without a doubt, you have a right to promote your interests, but the problem is that you do it at the expense of the country. You have a right to express your ideas, but given your behavior, it is difficult to see you as an altruistic and disinterested actor, who only looks for the betterment of Mexico. You, without a doubt have a singular and praiseworthy talent: you know when, how, and where to invest. But another, less attractive characteristic unfolds: You know when, how and where to press and to scam the legislators, the regulators, the media, the judges, the journalists, the leftist intelligentsia, which allow themselves to be guided by a misunderstood nationalism and for that reason, accept the exploitation of a Mexican because – at least he is not foreign. You will probably shrug off this letter in a thousand ways, as you disqualify the criticisms of others. You will say that I am one of those that envy your fortune, or that I have some personal problem, or that I am resentful. But it is not thus. I write with the annoyance shared by millions of Mexicans tired of the exorbitant accounts they pay; tired of the tiresome contracts they sign; tired of the rents they transfer; tired of the rapacious companies they suffer; tired of the government employees who from time to time criticize the monopolies but do little to dismantle them. I write with sadness and frustration, and the disappointment that it produces, to be witness to conduct which could better be - conduct that could be dedicated to innovate instead of blocking - that could compete successfully but prefers to protect itself constantly – a person who could give much to the country but who chooses to keep milking it – one who could become a more influential philanthropist but who instead insists on being an insensible plutocrat. John F. Kennedy said that great crises produce great men. It is a pity that at this critical moment for Mexico, you insist on showing us that you do not aspire to that. Denise Dresser
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