Mr. Carlos Slim keynote address in Business Summit Mexico, 2010 (October 24-26, Toluca, State of Mexico). This 8th edition was titled “Take-off Time: Actions for Change”.
Toluca, State of Mexico, October 24, 2010.
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A requirement for human capital and educational transformation is access to digital education and culture. And there is no better access way that educating ourselves through it. I think that this a fundamental leap to take. We can do it in a very short time period, so we could abate job-creation pressure in this way.
The costs for this form of education will be very low, of course. As I have said, what workers need, in my opinion, are not just equal opportunities and assurance. They require job opportunities being attached to progress and human development expectations; I mean assurance, health care, education, housing for them and their families, and deserving retirement. Creating a basic nationwide wellbeing network for a good part of the population would be very important. Through proper public policies and efficient private sector participation, we should make sure a nationwide social wellbeing network for every Mexican.
We should think how to manage unemployment, of course. A basic instrument is unemployment insurance. Fired-workers compensation or paid wage taxes should be allotted to fired-workers sustenance during unemployment time period while putting them back on upgrading-labor track.
What this it means? It means that if one employee’s ability has become obsolete due to equipment and technology innovation, he should have an opportunity to upgrade himself for job-demand abilities. During unemployment time, workers should have trained to perform better-paid or at least job-demanding activities.
What these activities are? I have made some notes because we should envisage the labor force magnitude for the next 15 years from now. I guess we will have about 55 million working-age people, who will start working a little bit older than nowadays, not at 14, 15 or 16, rather at 20 or 22 years old. And they will not retire themselves at 60, neither at 65, rather at 70 or 75 years old. In-force retirement age at 55 or 60 years old is a national calamity. Many contracts already note it that. So, I think people should work some additional years than nowadays do.
How to employ these upcoming 55 million people? What our country will offer to them? I have brought a little tablet. First, the primary sector, agriculture, the traditional one: we have to attain high productivity and global competitiveness to take advantage of high commodity prices and United States high demand. That’s what Brazil, Chile, Argentina and Colombia are already doing. We have to go in this direction.
Second, we should consider energy production, of course, and mining also. Mining is now a boom primary sector yielding huge benefits. Australia is making big investments in this field. It yields 48,000 dollars per capita.
Mexico’s mining will receive big investment capital during the next three-five years, many billion dollars to excavate mines, operating them and transporting ore. This sector will employ about 15% of the labor force.
Third, we have the long-established industrial sector, building, infrastructure, housing, which have customarily served as a trigger for economic activity, not only for employment in many regions, rather exerting multiplying effects on many economic sectors on a nationwide scale.
Fourth, we have trade, which customarily have ranked top in job creation. Then, another important factor is education. We have to invest more human capital in education, culture and entertainment.
All of these economic sectors will grow up much. At the extent we get people out of poverty and subsistence to incorporate it into the market economy, all of these activities will grow up.
Health care, of course… Tourism is fundamental. Environment worries us much; in fact, it has become an important economic activity and employment source in the whole world and in our own country as well.
Then, a very important activity, besides public services and bureaucracy activity, is income-generating information technology. Information technology creates jobs not only in building and operating networks, rather in both data and call centers, which are workforce intensive. Millions people are employed and many more will be employed in call centers.
This is a big opportunity, by reason of which human capital, content production and applications development for this new technology services are very important.
There is health tourism also. In a context of U. S. economic bankruptcy, U. S. health spending amounts about 20% of GDP and it has not reached up universal coverage yet. Mexico will be able to provide health-care services for Americans at 70% lower cost. Personnel of both American firms and public entities could be serviced in Mexico, so employment could be high in this field. Retiree care counts for another important activity.
These opportunities are arising from the economic crisis of the advanced countries, a situation that has forced them to adopt a near-zero interest rate. With such interest rate, we could have long-term cheap dollars and pesos at disposal.
When long-term cheap money abounds, it is not easy to find a financial target for it because returns tend to be negative. So, big investment projects become viable because they can be funded at very low long-term interest rates. In such a situation, financial capacity tends to grow big.
I want to stop remarking in order to allow questions, which is an objective of this meeting.
Thanks.
Moderator: There is some question for Mr. Slim?
Carlos Slim Helú: What really do abate poverty and dignifies human beings is employment. Before employing people, however, government or private sector should guarantee health, education, early education, nutrition, culture and physical recreation. Businessmen and foundations are called for strong activity in all of these fields.
According to our own experience, in respect to non-income-generating business, whose activity, however, is very important, relying on a mix of foundations and voluntary personnel is commendable. For voluntary personnel I mean employees willing to freely contribute a part of their free time. In our own experience, they use to contribute gladly.
In respect to human capital formation, the state, private sector and society are called to make a big effort. We should do it because strong domestic human capital is the mean resource to help our country. We should do it in the form of non-profit deed.
Yet, the conclusive way out of poverty is employment. Obviously, the better educated the person, the better options of a dignifying job for it.
During the last 50 years or so, trillion millions dollars have been spent in erasing countries’ debts, affording health and food aid for people, making congresses, meetings, etc, yet poverty is still there. Another common anomaly is that excellence scholarship students don’t find job when graduated. So, creating human capital, either through non-profit or profiting education, is important, yet the only way out of poverty is employment.
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