Anonymous - 3-10-2003 at 01:23 PM
http://www.signonsandiego.com/news/business/20030309-9999_1b...
Uncertainty about economy, war leaves city's residents jittery
By Enrique Garc?a S?nchez
March 9, 2003
TIJUANA ? Uncertainty is the order of the day here.
The combined effects of the falling peso, rising gas prices, increasing unemployment and the fear of what will happen if war breaks out in the Middle
East have left city residents on edge.
The peso has lost more than 20 percent of its value against the dollar in the past year, with the steepest drop occurring in the past few weeks.
The exchange rate has slipped to 11.1 pesos to the dollar, making those who routinely buy greenbacks much more cautious.
"People have stopped buying," said Imelda Garc?a Rodr?guez, who works at Carrousel, a money exchange house.
The drop has affected imports, exports, and people like lawyer Jacobo Ackerman, who runs several discount clothing stores.
He buys his merchandise six months ahead of time from Taiwan and Thailand. Even before a war breaks out, he said, "It's difficult to plan things,
nothing is for sure."
Ackerman has two ways to evaluate the economic climate. "Every day, more people show up looking for work," he said.
His second gauge is equally simple. To maintain the revenue his stores brought in last year, he has had to open a third locale.
"I have to work harder to generate the same amount of money," he said.
Residents said waiting times to cross the border grew after Washington raised its terrorism alert status to "orange" last month. A spokesman for the
Department of Homeland Security, which is now responsible for the border crossings, denied this, and suggested that other factors, such as rainy
weather, caused the longer-than-usual lines at times.
Last year, Mexicans who live near the border were crossing into the United States to buy cheaper gasoline. To discourage this flight, in December the
government-controlled gasoline company, Pemex, tied its prices in the region to prices in stations along the U.S. side of the border.
This gave a break to gas-station operators in Tijuana for a while. But when prices started climbing north of the border, residents south of it faced
another headache.
This week the federal government suspended the price program, but gas still costs more today than it did before the program began. Unleaded gasoline
is selling for about $2 a gallon.
Residents are very concerned about what will happen to their city if war breaks out. One of their biggest worries is that the ports of entry will be
closed, or that the wait times will become nightmarishly long, as they were in the days and weeks after Sept. 11, 2001.
For people like Sara Casillas Estrada, the fear of a war is so real that she's considering leaving Tijuana, where she has lived for a decade, and
returning to her native Guadalajara.
"Imagine if they attacked San Diego," she said.
"We're afraid," said her daughter, Rosa Orozco, a 40-year-old single mother of seven children. "I can't move, even if I wanted to."
Orozco began selling used clothing at flea markets about nine years ago. She said she is struggling to earn enough money to make ends meet, a
situation common to many families.
"They spend less each time, and carefully look over the items before deciding to buy," she said of her clients.
Sixty-three-year-old Magdalena Aguiar Nava said she had felt fortunate to have an average salary of about 700 pesos a week, about $70, working at Sony
de Tijuana. The factory, which made stereos and DVD players, closed six months ago, putting about 1,000 people out of work, including Aguiar.
She since has been forced to accept a part-time job. She earns about 400 pesos a week, about $40, for working a three-day schedule at a candy stand in
Plaza Carrousel, one of the city's most popular shopping centers. She said her customers are talking about the same things: the economy and the
possibility of war with Iraq.
"People say that everything costs more than before, and almost everyone is afraid. They see problems coming," she said.
At the end of January, Melco Display Devices Mexico, a subsidiary of Mitsubishi, closed its assembly plant in Mexicali, leaving 300 people out of
work.
Daniel Romero Mej?a, who leads the National Council of the Maquiladora Industry, blames the plant closings on two factors: Mexican government
decisions that have hurt competition, and the drop in U.S. demand for the plants' goods.
This situation worsened after the Sept. 11 terrorist attacks, pushing unemployment to levels not seen in years. Nationwide, 300,000 assembly plant
jobs have been lost.
The tourism industry hasn't fared any better.
Approximately 90 percent of the hotel reservations for next summer in Tijuana have been canceled, not only by tourists but by businesspeople who
periodically visit the city, said Alberto Lim?n Valerio, president of the Chamber of Commerce and a director of a tourist industry group.
The best thing to do under the circumstances, Lim?n said, is to work harder.
Dave - 4-5-2003 at 10:24 AM
"The best thing to do under the circumstances, Lim?n said, is to work harder."
Maybe so but the typical response is to raise prices. I've always wondered why Mexicans, and it seems to be exclusively Mexicans, use this economic
model.
I have a friend who works as a starter at Bajamar golf course. He tells me that when demand started to fall off after 9/11, the tract steadily
increased the green fees. Eventually there will be only one golfer left who will pay $10,000 to play a round of golf.