Edition: May 2008


Mexport Magazine

 The Connection

 By Patrick Osio



The ‘In Spite’ Of People
Chronicling how Baja’s border business
community specializes in overcoming obstacles

In January 1997, we dedicated this space to the citizens of Baja California, dubbing them the “in spite of” people. “It makes no difference what crisis or calamity is thrown at them, they bounce right back,” we wrote. Today, 11 years and four months later, the subject merits revisiting, once again acclaiming the courage and tenacity of the people of Baja in overcoming adversity.

Back then the troubles were different: “What new tax is being imposed on the business community? How high are interest rates today? How far did the peso fall and what is the decline in its buying power? With illegal drug demand in California and surrounding states running high, drug cartels unleashed an unprecedented reign of terror. What is today’s political scandal?”

Immigration was an issue, causing us to note the challenges for Baja’s border cities: “While home to these visitors, the Baja cities must provide health, education and other public services. They do so at a time when low-cost housing, water, sewer and power services already are strained beyond the states’ and municipalities’ ability to provide.”

Despite those challenges, we noted how the “in spite of” people were hard at work. “In calendar year 1995, 94 new maquiladoras were granted permits in the state. Through October 1996, 91 new maquiladora permits were granted in Baja (74 in Tijuana), and 201 existing maquiladoras expanded their operations. In 1995, maquiladora exports topped $1.4 billion, a figure that 1996’s results are expected to equal or slightly better.”

Now let’s jump to 2008.

The Otay Mesa Chamber of Commerce was founded 21 years ago by business visionaries who foresaw the border’s rapidly evolving economic integration. They created Mexport, an annual trade show that for the last 19 years has helped promoted maquiladora sourcing opportunities for U.S. businesses. Both the chamber and the trade show have grown each year despite crisis and calamities on both side of the border. The Otay Chamber and its activities are stark reminders of the faith the founders and current members have in the “in spite of” people of Baja California.

The border economy continues to face down challenges. The maquiladora industry, for instance, withstood the onslaught of China’s competition and is rebounding by modernizing factories and educating its mid- and senior-tier managers and, probably more importantly, its on-the-floor work force.

The real estate sector is overcoming the severe shortage of basic housing with a building boom. Social interest housing (low-income homes) construction has provided nearly 200,000 homes over the last five years, and the boom continues.

Coastal housing marketed to Americans as vacation or retirement homes rebounded after the scandal of Punta Banda, a recovery requiring serious soul searching and resolve of the “in spite of” people to reform real estate sales and development practices. This led to U.S. title insurance companies offering insurance coverage for the projects, which today are almost a standard part of all real estate developments along the Pacific coast and inland. Now, Rosarito Mayor Huggo Torres is going further with new reforms to further reign in real estate sales activities and possibly moratoriums on building permits until projects have completed securing their on- and off- site improvements.

Housing sales to Americans, and tourism, were nearly crippled last year. First, the U.S. housing industry fell apart in 2007, leading to a slowdown of sales to Americans along the Baja coast. Then exaggerated and in some cases erroneous U.S. media reports on kidnapings of U.S. citizens brought a precipitous fall of tourism throughout the entire state of Baja.

The “in spite of” people went on the offensive by reporting that kidnappers were targeting Mexican business people, not tourists.

The petty larcenies and police shakedowns of tourists, which has been a problem, has been met with aggressive enforcement against rogue police officers. New and better trained officers have been hired. A special highway patrol is now the only law enforcement allowed on the scenic highway from Tijuana to Ensenada. Special telephone numbers to call for help or report abuse is provided and readily available. And the American expatriate Baja community has rallied behind the efforts with praise and support.

Slowly, tourism has begun to return. For example, the 26th annual 50-mile bicycle run from Rosarito to Ensenada in April was a success, drawing more than 6,000 Americans and Mexicans.

The “in spite of” people even are managing to keep their maquiladoras competitive, despite worldwide competition. Since the loss of 70,000-plus jobs between 2001 and 2002, employment is again growing and in the five years between 2002 and 2007, the value of goods produced by the more than 900 maquiladoras increased 45 percent.

Personally, I am proud to record the tenacity of Baja’s business community as it overcomes obstacles, be they self-made or handed down by others or by providence itself.

Patrick Osio Jr. can be reached at posiojr@sandiegometro.com. The veteran consultant also has issued The Mexican Perspective, an intensive primer on business culture and protocol. Copies are available at hispanicvista.com/sales/book_sale.htm.


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