It has been a terrible time to be a billionaire in Mexico lately.
The peso’s plunge to historic lows against the dollar this year did not, for once, translate into rampant inflation and economic turmoil for the people of Latin America’s second-biggest economy — a turbulent scenario so often seen in the past.
But it did inflict plenty of damage on the country’s uber-wealthy already facing challenges in their industries from regulation, competition or falls in the price of commodities.
Telecoms titan Carlos Slim, the country’s richest man and for 2010-14 the wealthiest person in the world, lost a fifth of his fortune in the year to March, according to the annual billionaires’ list compiled by Forbes.
Ricardo Salinas, a media, retail and banking mogul, had it worse: he saw his net worth nearly halved. Germán Larrea, a mining billionaire and Mexico’s second-richest man, and Alberto Baillères, another mining and retail billionaire, both lost a third of their fortunes.
For Slim, 76, it was a sharp about-turn: his wealth had grown $5.1bn in the 2015 list, compared with his 2014 ranking, and he was the fifth biggest gainer among the world’s wealthiest top 10 that year. But that all changed as 2015 wore on: he became the biggest billionaire loser by a mile, with a drop of $22bn wiped off his net worth by the year’s end.
Just as well Slim has a reputation for simplicity and for caring less about money than about leaving his children investments in his companies for them to manage prudently.
The drop in his wealth reflected the tough times faced by Slim’s telecoms empire, América Móvil. The company has been pummelled by the peso’s losses against the dollar; a collapsing economy in Brazil, which has traditionally been its fastest-growing market; tough competition rules in Mexico and an aggressive new domestic player in the shape of AT&T. Last year, América Móvil posted a near 25 per cent drop in net profit.
However, since this year’s ranking was published by Forbes in March, Slim’s fortunes have actually clawed back some ground — nearly $10bn, to be precise.
That follows an unexpected Bank of Mexico rate increase to stem the peso’s freefall against the dollar and inject some confidence into Mexicans feeling familiar pangs of fear that recent, albeit tepid, economic growth was on the verge of unravelling.
Most of Slim’s domestic cohort have also enjoyed a recovery: Larrea, of Grupo México, has seen his worth rise 27 per cent and Baillères, who heads Industrias Peñoles and owns the swank Palacio de Hierro department stores, witnessed a 19 per cent improvement since the 2016 ranking was published.
The odd one out among the country’s big-name billionaires, is Salinas. He owns television empire TV Azteca, where advertising revenues are under pressure, as well as the Elektra retail chain and Banco Azteca. Elektra shares are 39 per cent lower than at the start of 2015, and Salinas’ wealth, which clocked in at $4.3bn in the 2016 ranking, has only inched up since to $4.7bn.
Many Mexicans have scant sympathy for a class that appears to live on a different planet from them. A study for Oxfam last year by Gerardo Esquivel reported that the number of Mexican millionaires grew by a third between 2007 and 2012, while in the rest of the world, their number fell 0.3 per cent.
Ten per cent of Mexicans, the report continued, held nearly two-thirds of the entire country’s wealth — a dire and seemingly unbridgeable inequality gap. But middle-class Mexicans are experiencing a breather: mobile phone charges have fallen dramatically in recent months after the government opened the telecoms sector long dominated by Slim. That has put more pesos in their pockets and powered a gathering consumption boom that is driving the economy.
So whether it is down to schadenfreude or just curiosity of a man whose wealth could, according to one estimate, maintain 10 per cent of Mexico’s poorest families for 14 years, a new biography of the publicity-shy Slim has been selling well. Slim, by journalist Diego Enrique Osorno, fills in colour and context, but despite seven hours of interviews, has no big new revelations about what makes the avid number cruncher and calculator enthusiast, known as “The Engineer”, tick.
At one point, Osorno visits New York City. “It’s an anticlimax for any admirer of profligacy that Slim’s first purchase in the Big Apple should be such a boring building,” he writes, after observing a nondescript 11-storey block on the corner of Fifth Avenue and 38th Street. Anyone hoping for frank confessions or to hear mentoring advice from the lips of Mexico’s most prosperous and probably least flamboyant businessman, is in for the same sense of disappointment.
More telling than anything in the book, perhaps, is Slim’s most recent display of the cool-headed business acumen that made him so successful in the first place.
Whatever he felt at seeing América Móvil’s share price crash to six-year lows in January, or his own wealth tumble so sharply, Slim did not say. Instead, he spent the six months to February quietly spending half a billion dollars to take advantage of the cheap share price and snap up América Móvil stock.
Perhaps his biggest lesson, then, is confidence.
Despite the painful regulations imposed by Mexican regulators to level the playing field in a telecoms industry Slim has dominated for quarter of a century, his is still the Mexican mobile operator that has been luring the most subscribers.