Mexican Leapfrogs Buffett and Eyes No 1 Spot

A cigar-chomping Mexican telecoms tycoon, Carlos Slim, has quietly slipped past Warren Buffett to become the world's second richest man with a fortune of $53.1bn (£26.8bn) - equivalent to roughly 7% of his country's annual economic output.

Although he is barely known to the rest of the world, Mr Slim has seen his fortune rocket by $23bn in the last 14 months. His wealth is only a whisker behind that of the Microsoft magnate Bill Gates, who is worth $56bn according to calculations by the US magazine Forbes.

The son of a Lebanese immigrant, Mr Slim, 67, works from a windowless bunker in Mexico City. His business empire includes a budget airline, Volaris, a cigarette company, Cigatam, a music retailer, MixUp, and an internet service provider, Prodigy.

But the key to his success was snatching control of Mexico's dominant telecoms operator, Telmex, when the service was privatised in 1990. Telmex accounts for nine out of ten landlines in Mexico and experts say Mr Slim has been vigorous in protecting this near monopoly.

George W Grayson, a Mexico specialist at Virginia's College of William and Mary, said: "This is why everybody old enough to grow a moustache, and many people who aren't, owns a cellphone in Mexico - because landlines are extremely expensive."

A cautious spender, Mr Slim has told interviewers that he created a ledger at the age of 12 to record his every purchase - even down to individual tortillas, drinks and doughnuts. He inherited millions from his father, who opened a successful store in Mexico City called Star of the Orient.

A father of six, Mr Slim lost his wife to kidney disease in 1999. He has named a museum after her which houses his collection of Rodin sculptures.

More recently, Mr Slim has developed a charitable foundation aimed at improving healthcare and education in his country, pledging funds of $10bn over four years. He has made it clear, however, that he does not intend to loosen his grip on his empire, telling Reuters: "Wealth is like an orchard. You have to share the fruit, not the orchard."

Critics say Mr Slim's good relations with Mexican governments have eased his path to prosperity. He has trodden a careful line politically, advocating tax cuts and reduced red tape as a way to boost business and catapult Mexicans out of poverty.

Prof Grayson said that in some ways, Mr Slim's story was typical of the Latin American country's problems: "His situation epitomises the reason Mexico has not enjoyed faster economic growth. With Nafta [the North American Free Trade Agreement], it opened its economy to the outside world but inside, Mexico is still infused with monopolies, oligopolies and bottlenecks."