Mr. Carlos Slim Helú’s speech.
Forum: Mexico Business Summit, Monterrey, Mexico, November 8-10, 2009.
November 8th, 2009, Monterrey, Nuevo Leon, Mexico.
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Ladies and gentlemen, good afternoon:
I am grateful to Mr. Miguel Alemán Velasco’s words and, above all, to his friendship, alike to his wife. Thanks to both of you.
The Honorable President of Costa Rica, Mr. Oscar Arias, and the Honorable Governor of Nuevo Leon, Mr. Rodrigo Medina Cruz, I am pleased to participate in this forum. I have written some notes, a rough draft of some ideas that I would like to read for you.
In order to have a wide sight of the new world era we are engaged in, we should try to compare it with the preceding ones. It is about seven thousand years ago that human civilization began, some three million years after the Homo habilis, and some 200 thousand years after the Homo sapiens rise. Most of the human thrives made during these million years are unknown to us because they just vanished away along the subsistence and procreation practices they served for. Many, many years have elapsed since the first man did emerge; we don’t surely even know if he counts for our truly older ancestor. What we know for sure is that human civilization began about seven thousand years ago.
During this passing of time admirable ancient civilizations have flourished and died: the enigmatic and colossal Egypt, the refulgent and harmonious Greece, the powerful and practical Roman Empire, the magnificent European Renaissance, all of them inheriting us precocious and paramount developments. Yet, it was just until the 19th Century when a formidable and multifaceted transformation began through continuous technological development as its keystone.
Technological development was not unknown for predecessor societies, of course. Sailing navigation, wind mills and many other artifacts and techniques were profitably used and improved since ancient times. Yet, it was not but until the 19th Century when all of the then energy-producing known forms could be generated by a single and most powerful technique, the steam engine.
The steam engine came to introduce thoroughgoing and accelerated change: railroad, steel industry, steamship, and others, all of them producing a big impact in many social fields. This was a steady succession of great leaps forward which impelled many countries to transform themselves in, I would say, a revolutionary manner, so embracing their route to economic and social development. Most of them keep standing as the developed ones.
The key for their transformation lies on industrial productivity originating in the textile manufacture, subsequently replicated by all of the industries and services being moved by steam engines in the most varied economic activities: manufacture, transportation, mining, and even agriculture, whose productivity grew twenty times at that time.
A bigger development came during the 20th Century with the introduction of electricity power and internal combustion engine. Science and all of the economic activities did grow as never before. Population, scarcely amounting ten millions eight thousand years ago, and 100 million two thousand years ago, have multiplied itself seven times to almost seven billion nowadays. All of this is well known for you, of course. The point I want to make is the emergence of wholly new social, political and economic paradigms that such changes did create.
In ancient times, agricultural societies were conjoined with monolithic power and social immobility. Economic wealth was dependant on land and brutal human exploitation. A set of severe, fixed and frequently deadly rules governed human affairs. It is not strange that monolithic rulers claimed divine origins for their authority. The Egyptian Pharaoh, the Aztec Tlatoani, the Inca Sapa, the Japanese Emperor, and the European monarchs should be invested by their respective priest caste in elaborated ceremonies. Political, religious, economic, military and social powers were amalgamated into a single one. This was the reason for the existence of slaves, vassals, human servitude, illiteracy, superstition and blunt ignorance. These humiliating conditions remained almost unchanged even after the invention of the print at the end of the 15th Century since its use was a privilege of the few.
The evolving social changes gradually introduced by a constant economic transformation began to altering such painful state of human affairs. After the Second World War a wholly new society began to emerge. This new society is no longer agrarian, neither industrial even. It is a tertiary or service economic organization evolving into a knowledge and information-based economy, or digital economy, as it has been named. Its engine is technology generating unprecedented growing productivity. In parallel or intertwined with it, a social sea change has occurred from monolithic power to democracy, plurality, diversity, human rights respect, globalization, economic competition, productivity, environment care and constant innovation.
This is a 180 degree transformation in respect to the agrarian societies, for sure. Unfortunately, as obvious as it appears, we have not fully assimilated it yet. The transition from the industrial society to a service-based society has provoked successive crisis, and we already are in the middle of the most recent of them. In a historical perspective, the current crisis did break up at the beginning of the 1980’s, it picked up during the middle 1990’s, and it flared up during the current days.
However severe this chain of crisis could be, we should not underestimate the full social and political transformation we are already experiencing. This change is generous in itself. We are no longer inclined to land or men exploitation. It is well-being what we all are interested in. Poverty eradication has become an economic need, rather than an ethical or social-justice claim.
The poor should be incorporated to economic modernity in order to sustain the economic development of countries. We Mexicans have already experienced a prior massive incorporation of the poor to modern economy. We should not forget the 50 year period, since 1932 to 1981, during which our country steadily grew 6.2 percent annual, in spite of varied ideological orientations of successive governments. It was just during the Great Depression years when the Mexican government and the productive forces agreed to develop a multifarious state policy to transforming the rural Mexico into an industrial and urban society. This has been the biggest change Mexico has successfully undergone.
The range of such a change can be compared to the ones experienced by the United States and several European countries during the 19th Century, and China and Brazil during the present time. Indeed, China is already hastily transiting from a rural-subsistence society to a higher education-based modern society. But unlike Mexico, China has linked its educational efforts to economic globalization, commercial openness, competition and productivity, to become the biggest good-manufacturer in the whole world. Of course, we are not overlooking that its highly competitive cost structure hardly could be equaled by any other country, let us its political system.
By selling goods to the rest of the world, China has filled up its reserve currency coffers. Since 2002 year it has accrued about 60 billion dollars each single year, in contrast to the United States, which have accrued a comparable amount in deficit during the same time period. With such huge gains, China has been able to investing big sums in order to get ten of million people out of poverty year by year. These masses of people have left subsistence economy and ignorance behind to get incorporated into modern economy and higher education.
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