Mr. Carlos Slim, special guest in the Annual Ceremony of the National Awards granted by the Association of Engineers and Architects of Mexico (Asociación de Ingenieros y Arquitectos de México, A.C.) (AIAM).
May 25, 2011. Mexico City.

The AIAM granted the 2009 National Engineering and Architecture Awards to Dr. Daniel Reséndiz Núñez and Arch. Ricardo Legorreta Vilchis, respectively. Dr. José Narro Robles, Dean of the National Autonomous University of Mexico, presented the awards to the winners. In the ceremony, held in the Palace of Mines, Mr. Carlos Slim Helú gave a speech as special guest.

During his participation, Mr. Slim stated that the generation of opportunities is in sight in countries such as Chile, Argentina, Colombia, Ecuador, and Brazil. In Latin America, the largest and most populated countries have a per capita income of about 10 thousand dollars a year, which is a significant progress to break the underdevelopment barrier. He stressed that this barrier must be broken as the gravity attraction is broken by the escape speed. It is the underdevelopment escape speed, and we are getting closer to it, 10 or 12 thousand dollars are an important platform to achieve it.

These national awards have been granted by the AIAM every year, since the sexenium of President Adolfo López Mateos.

Words of Mr. Carlos Slim in the Annual Ceremony of the AIAM National Awards.
May 25, 2011.

Good evening.
Mr. Dean Dr. José Narro Robles.
Dr. Salvador Landeros, President of the National Executive Committee of the Association of Engineers and Architects of Mexico.
Dra. Yoloxóchitl Bustamante Díaz, Director of the National Polytechnic Institute.
Distinguished Members of the Presidium.
Distinguished and recognized winners of the National Architecture Award, Arch. Ricardo Legorreta, and the National Engineering Award, Dr. Daniel Resendíz,
Dear friends, engineers and architects,
Ladies and gentlemen,

It is a great pleasure for me, and a great pride, to be present at this ceremony at the Palace of Mines of the School of Engineering of the UNAM, to which we all owe so much.

It is remarkable to live in these times, times of civilizational change, in which we live in a new society with paradigms 180 degrees different from those of agricultural and industrial societies. A society that is generous and virtuous, but implying many changes, which must be conducted properly to minimize social tensions. Otherwise, they create conflicts like those we are seeing in developed countries. These tensions are stuck, and they are not seen to be resolved soon.

This new civilization and its paradigms, as I said before, is very generous, it is made of democracy, of freedom, of plurality, of diversity, of human rights. However, it is also a society of global competition, of technology, of innovation, of productivity, of competition, of environmental care. And it has a common denominator that has always been the reason for humanity’s changes. It has been changing thanks to the technological advance that has emerged from the discovery of fire, language, writing, technological development and innovation, and even revolutions, that are like huge mutations, as was the Industrial Revolution 250 years ago.

And lately, this is the society of knowledge, the society of service, in which the majority of the population works in services, in which technology makes productivity enormous and fully transforms the ways of life of society. This change will have to be conducted in it to train, prepare and educate people in those new fields that this civilizational change demands: more employment.

Now, in this society of knowledge, it is clear that we need to have knowledge, education, obviously, but before you must have health; modern, quality education, have a digital education, digital culture. We must have innovation, research, technology, science, development and a great human capital.

That human capital is, undoubtedly, the basis of this new civilization, of this civilization where there is a lot of competition, there is globalization. There is a substantial change that must be led to avoid what is happening in Europe, for example, or in the United States, which have large public deficits. They have welfare levels that have become unsustainable due to early retirement, universal health, and so on, and they have not been able to make that change, sometimes because they have not tried or there is no political will. Other times they have tried, as we saw in France, where they wanted to change the retirement age only two years, and it was not accepted. This retirement age was established when people died at 60 or 65. Today, however, they will probably live up to 85 and that will be very complicated.

We need to have people educated in the knowledge society, in a University like this one, and of course, will need to have physical infrastructure. We have to look and search within these needs of education, human capital, physical infrastructure and, of course, universal access to education, health, nutrition, medical care, job security, retirement, housing, etc. We must have economic activity and investment, because public budgets are insufficient, especially when it comes to annual flow accounts and when investment is confused with current spending. And there is no differentiation among budgets, nor deficits, when it is about current expenditure and when it is about productive investment that, of course, curbs productive investment, that social investment that the country requires so much.

However, I am optimistic. I think we are in a situation where we can transform what has been, for example, in recent years, the generation of the crisis, with the generation of opportunities. We are living in an era in which, despite stagnation that may take several years for developed countries to overcome, and their critical levels of unemployment and public and commercial deficits, and financial and banking crisis, and unsound public finance, in Latin America the world is different.

In Latin America, we have stopped being the problem to be the opportunity, to booster development, to promote growth. Obviously, together with other countries of other regions, such as Asia and the Middle East, but I want to talk specifically about Latin America.

Latin America has this great opportunity to start a generation of growth and development. And what makes me think with optimism, is that we have all variables and parameters in good condition, we have the bases, the fundamentals, the critical mass to achieve it. Of course, to have economic activity, what is required? An important economic activity, investment is required. The interesting thing is that, in the face of this crisis in developed countries, there are huge financial resources, large capitals, large resources available to finance any project that is relatively viable, that is sufficiently viable. Low long-term interest rates, in foreign currencies, in national currency, in Pesos. There are enormous resources for financing our development, our investment and our infrastructure. It was also mentioned just now, that bank credit is minimal. It is very small as related to what it was before, and to what it should be, and to what it is in countries with similar development, it is a potential.

The new worldwide trend that has been demonstrating its efficiency for many years is the public-private partnership. In it, public projects are financed with private resources in such a way that the debt ceiling is removed, and public finances are healthy, perhaps, and I agree with that, they are too healthy because they confuse the instruments with the objectives.

Healthy public finances are instruments; they should not be an objective. Moderate inflation is an instrument, and other issues that are instruments, are not objectives. For many years, we have kept them as objectives, and have followed recipes from other some places. We have been thinking that, if macroeconomic variables are adequate, if they are stable, the country will grow by itself, and economy is not even left to the market waves, it is left at random, and that is not reasonable.

We are living this creation of opportunities, a creation of opportunities we already have in sight. We are seeing it in neighboring countries, in Latin American countries, as Chile is progressing more and more. Argentina came out of a deep crisis resulting from recipes that were followed for many years, in which it sold everything, spent everything, entered into large trade and fiscal deficits of all kinds, and keep on growing. Colombia has sustained growth; Peru, growing, Ecuador growing; Brazil, of course, also growing. And there is another situation to be underlined, which in one way or another, despite our low growth, in Latin America, the largest and most populated countries have a per capita income of about 10 thousand dollars a year, which is a significant progress to break the underdevelopment barrier. He stressed that this barrier must be broken as the gravity attraction is broken by the escape speed. It is the underdevelopment escape speed, and we are getting closer to it, 10 or 12 thousand dollars are an important platform to achieve it.

Of course, it is necessary to grow, and apart from a lot of investment, a lot of work, politics and social activities will be required to achieve such transformation; a lot of leading for this change and effort. Of course, a lot of employment will be required. In the end, social supportive policies, beyond the fact that sometimes they are clientilist, are fundamental, but, in turn, to be definitive, there must be employment that not only supports development better by strengthening domestic economy, but which also dignifies the family and the society.

It has been stressed here. Our Dean has talked about it many times, about ninis, people who neither work or study, or ninjas, as they are called in the United States, who have no income, have no work or assets. It is a phenomenon that is obviously happening because our society has not been able to give an opportunity to absorb those people who, prepared or unprepared, to enter into the labor market. That famous demographic bonus, that we have talked about so much, can become a demographic liability, if economic activities and jobs that these people are claiming for are not generated, not only the jobs, but also the studies that these people claim for.

I was saying, and maybe it seems that I am contradicting myself a little, that this is a time – without a doubt – of opportunities. Long-term financing is available, even in Pesos, healthy public finances, low inflation, and bank loans potentially important for financing initiatives. Lags in our society, lags are opportunities because, if we are going to build a road, we are going to have to make investments; we are going to create economic activity. If households are required, if we have to improve the infrastructure, if schools are needed, hospitals, that is investment, that is activity, it is employment. Moreover, all investment that can be made in ports development, tourism, airports, telecommunications, oil; we know all the national potential. We have a lot of potential and at the same time, Latin America is experiencing a similar situation.

Another important factor is that in the industrial society, countries exporting or producing primary goods lost in terms of trade against industrialist countries. There was a deterioration in terms of trade of the primary sector of the economies. Today, that primary sector, by virtue of the great demand that is being generated when many people leave poverty – when they leave the rural areas and self-consumption models – when they are in the self-consumption pattern, they do not join economy, modernity, demand for goods and services. As these people come out of poverty (and in China there are about 30 million a year or 25, leaving the rural and self-consumption pattern to integrate to the urban and industrial environments), beyond great speculation, they are fostering recovery in terms of exchange of primary goods. This is also fundamental in the economic recovery and economic potential of our Latin American countries. Our whole picture is just like that.

I believe that we have that potential. What we have to do is build a generation of opportunities within the stagnation of developed countries and end these lags.

I want to finish by quoting a phrase of President Lula Da Silva in a very recent meeting, also stressing that there are great possibilities. He said, “We have no right to waste time.”

Thank you.


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