May 10, 2006

Memo From Mexico, By Allan Wall

Meet The World’s Third-Richest Man—And The Nine Other Mexican Billionaires

Mexico is commonly viewed as a poverty-stricken country whose inhabitants will die unless we open our borders right now. An appeal to the "humanitarian argument" is one of the main propaganda tools used to support open borders and mass immigration.

And by American standards—though not world standards—Mexico is indeed a poor country.

But there is a lot of money down here.

As a matter of fact, according to Forbes magazine’s latest list of billionaires, a Mexican, Carlos Slim, is the third-richest man in the world!

That’s right! Bill Gates is #1 with $50 billion; Warren Buffett is at #2 with $42 billion.

Trailing Buffett by a mere 12 billion is Carlos Slim of Mexico, with a net worth of $30 billion dollars. (The World’ Billionaires, edited by Luisa Kroll and Allison Fass, March 9, 2006).

Besides Slim, there are nine other Mexican billionaires. (That’s dollar billionaires, not peso billionaires).

Why don’t Americans hear more about these people?

Let’s take a look at each of the 10 Mexican billionaires.

CARLOS SLIM HELU

Carlos Slim (see photo here), also known as "Rey Midas" and "El Ingeniero" [the engineer] is a telecommunications magnate, owner of Telmex, America Movil, CompUsa, WorldCom and plenty of other holdings, including Latin American subsidiaries of Verizon. Of Slim’s 30 billion dollar net worth, just last year he accumulated $6 billion of it.

Carlos himself didn’t start out poor. His Lebanese-immigrant family (original surname Salim) became rich buying up Mexico City properties after the Mexican Revolution.

By the time of the much-acclaimed privatization (a.k.a. crony capitalism) policy of the Carlos Salinas administration (1988-1994), Slim was in position to purchase Mexico’s state telephone monopoly, Teléfonos de México—Telmex.

So Telmex was converted from a state monopoly to a private monopoly. It still controls 94 percent of all the fixed telephone lines in Mexico. Slim also has 80 percent of the mobile phone market.

Mexican free-market economist Silvia Luna explains what Telmex offers the Mexican telephone-user:

"Today Mexico faces the highest telephone charges in the Western Hemisphere and Telmex customers pay the highest telephone charge of the 30 countries of the OECD…"

"We Mexicans pay charges three times higher than the cell-phone users of Sweden and Denmark, which negatively affects the country’s competitiveness, while political influences block everyone who promotes competition." [Carlos Slim y su monopolio perfecto, Cato Institute, April 17th, 2006]

But the world’s third-richest man is still coming out ahead!

JERONIMO ARANGO

Spanish-born Jeronimo Arango is a self-made retailer whose retail chain Cifra partnered with Wal-mart in the early nineties. Later Cifra was bought out by Wal-mart. Arango cashed in, left the company but kept a lot of stock, and is now worth $4.6 billion. There are currently over 700 Wal-marts in Mexico, and last year its stock rose 44 percent. So life is good for the 80-year old Arango.

RICARDO SALINAS PLIEGO

Ricardo Salinas Pliego (see photo) and family are worth $3.1 billion. Salinas Pliego made most of his money in retail, cellular services, and television—he owns the Azteca Network. (Azteca, formerly state broadcaster Inmevision, was acquired from the Mexican government back in the Salinas privatization days.)

Salinas Pliego has made history by being investigated in Mexico’s first ever insider-trading case. Still pending.

ALBERTO BAILLERES

Alberto Bailleres has expanded his inherited mining interests (and other projects) into a net worth of $2.8 billion. Grupo BAL, the family holding company, includes the Grupo Nacional Provincial bank and Palacio de Hierro, a luxury department store.

MARIA ASUNCIÓN ARAMBURUZABALA

Beer heiress Maria Asunción Aramburuzabala (see photo) is Mexico’s richest woman. She and her family are worth $2 billion. Her Spanish-immigrant grandfather founded Grupo Modelo, now the country’s biggest brewer. Maria also owns part of Grupo Televisa, but she just sold out half her stocks.

And get this—last year Maria Asuncion married none other than Bush crony Tony Garza, the U.S. ambassador to Mexico.

This tends to bear out Steve Sailer’s thesis that Bush policy toward Mexico is based on a dynastic desire to emulate the Mexican oligarchs.

ROBERTO HERNANDEZ RAMIREZ

Roberto Hernandez Ramirez, now 64, is a self-made banking and finance magnate. Hernandez’ big break came when he was in charge of the Banamex bank at the time of its purchase by Citigroup in 2001. That deal made Hernandez almost $2 billion. So now he sits on the Citigroup board along with former U.S. president Gerald Ford. And he reportedly devotes himself to social and environmental causes.

LORENZO ZAMBRANO

Lorenzo Zambrano looks pretty happy in this photo! No wonder. He is the head of Monterrey-based cement firm Cemex, founded by his grandfather. He and his family are worth $1.8 billion. Last year Cemex spent $5.8 billion acquiring British cement firm RMC Group. Zambrano also owns a good chunk of telecom company Axtel. At 62, Zambrano is single and has no children, so I wonder who will inherit his fortune.

EMILIO AZCARRAGA JEAN

Emilio Azcarraga Jean (see photo) is only 38, but he’s worth $1.7 billion.

Azcarraga inherited media conglomerate Grupo Televisa from his late father and owns almost 15 percent of its outstanding shares.

You might be interested to know that Televisa already owns 11% of U.S. Spanish broadcaster Univision, notorious for its funding of the opposition to California’s Proposition 187.

Azcarraga is planning to become a U.S. citizen so he can increase his share in Univision.

After all, what is American citizenship about if not increasing your market share!

ALFREDO HARP HELU

At only $1.4 billion, Alfredo Harp Helu (see photo) is a "poor" cousin of Carlos Slim (see above). Harp made his fortune in the Banamex buyout (see Roberto Hernandez above) and also owns the "Red Devils" Mexico City baseball team.

ISAAC SABA RAFFOUL

Self-made Isaac Saba Raffoul and family are worth $1.4 billion, making him the "poorest" Mexican billionaire. (Well, somebody has to be!)

Saba runs pharmaceutical giant Grupo Casa Saba, and has textiles and real estates. He runs Marriott hotels in Puerto Vallarta and Cancun. Even though his CasaMagna resort in Cancun is closed because it was hit by Hurricane Wilma, Saba is not hurting.

SO WHAT?

OK, so Mexico has 10 billionaires (plus plenty of millionaires). Is that bad?

No, not if the billionaires are using their money to invest in businesses that provide jobs for Mexicans. In fact, if they were using their wealth to raise the Mexican standard of living, they would be heroes.

Carlos Slim talks about the importance of economic growth and jobs. He even meets together with a group of other high-rollers, politicians and intellectuals and other elitists to talk about economic development.

That’s about as far as it’s gotten.

I believe that if mass emigration to the U.S. didn’t exist, there would be much more pressure on these billionaires.

President Fox is OBSESSED with emigration. But rather than using his presidential bully pulpit to pressure Slim and his fellow billionaires, Fox has used it to bully the United States into accepting more Mexican immigrants.

Mexico has a huge gap between the rich and the poor, I’ve seen it firsthand where I live. You don’t have to be a Communist or radical egalitarian to see the potential social problems caused by this reality.

If Mexico’s rich were doing more to provide jobs for their fellow citizens, who could begrudge them their wealth? I wouldn’t.

Here is my American strategy. What if the U.S. got control of its borders, deported illegal aliens, refused to give amnesty, eliminated the Anchor Baby loophole, and expelled any Mexican diplomats who meddled in U.S. immigration policy?

What if we drastically reduced legal immigration, and made it clear by our policies that this era of mass immigration is over?

There would be a lot of shouting and whining. But in the end, Mexico would have to accept it.

Then Mexicans would start paying more attention to their fellow citizens who are billionaires and millionaires.

With the U.S. safety valve shut off, Mexico’s masses might start to pressure the government confiscate the wealth of Mexico’s rich…or just take some of it themselves.

Faced with this prospect, I think these Mexican billionaires would start thinking seriously about generating more job opportunities for their fellow citizens.

These billionaires have formidable wealth, assets and connections.

How about using them to create more and better-paying jobs right here in Mexico?