Family clans dominate in 50 of the country’s strongest consortiums

Mexico City. The concentration of economic power in Mexico has become a family inheritance and a revolving door to political power. There is no economy in Latin America and the Caribbean, nor in the Organization for Economic Cooperation and Development (OECD), where so many large companies are in the hands of so few family clans like the Mexican one, shows a new report from the World Bank.

About 95 percent of the 50 largest private companies in Mexico are owned by the country’s richest families and have income equivalent to a quarter of the gross domestic product (GDP), the agency reported. This results in it also being the country with the highest percentage of family companies listed on the stock market, double the world average.

This economy of family inheritances is evident in various classifications and estimates. The fortunes of the eight richest men in Mexico do not list themselves. Carlos Slim Helú and family, Germán Larrea Mota Velasco and family, Ricardo Salinas Pliego and family, Alejandro Baillères Gual and family, Maria Asunción Aramburuzabala and family, Juan Domingo Beckmann Legorreta and family, Carlos Hank Rhon and family and Antonio del Valle Ruiz and familyreports Forbes on his list of possessors of fortunes valued in billions of dollars.

These eight families, linked at some point with names such as Telmex, América Móvil, Telcel, Grupo México, Cinemex, Banco Azteca, Elektra, Tv Azteca, El Palacio de Hierro, GNP Seguros, José Cuervo, Grupo Modelo, Banorte and Maseca, among others have a combined wealth of 170 billion dollars.

The crux of family-owned businesses is the influence they can have beyond economics, the report states. Competition: the missing ingredient for growth? where the World Bank reports that the GDP of Latin America and the Caribbean will advance 1.6 percent in 2024, slightly below the 2 percent projected in October, and makes an analysis of the structural factors that have made the region one of the slower growth.

Greater opposition to the treasury and to being regulated

The WB recovers three hypotheses regarding the role of business families in politics. “First, opposition to any tax, regulation, or measure that adversely affects family wealth is likely to be much more intense among members of a business family than among contract managers.

“Second, families have an advantage in politics because of a longer-term vision, compared to managers. If these families agree to support a political sector, they will be able to monitor its performance over time more effectively, rewarding or punishing it appropriately.

Third, families solve agency problems in both management and politics. Younger generations often enter politics acting as trusted representatives of the family within the political elite. The family ownership factor is not irrelevanthe emphasizes.

The organization states that, on average, in Latin America 22 percent of publicly traded corporations and 28 percent of companies with 100 to 5 thousand employees are family-owned.

The dimension of market power that facilitates the extraction of rents It not only affects productivity. An analysis of more than 300 economic cartels detected in Latin America between 1980 and 2020 found that at least 21 percent of cases involved staple consumer products such as sugar, toilet paper, wheat, poultry, milk and medicines. Mexico is the largest number of these cases, with 15, followed by Colombia (11) and Brazil (10).

The lack of competition and a market that had developed as an oligopoly has led to around 40 percent of economic activity in Mexico being investigated for alleged anti-competitive practices between 1993 and 2018, according to data recovered by the World Bank.

A good example of this is the telecommunications sector in Mexico, where concentration and oligopolistic pricing are well documented (…) The telecommunications and media elite have resorted to systematic lobbying in search of favorable laws and has used the Mexican judicial system to hinder regulatorsreports.