THE ECONOMYS OF THREE CALIFORNIAS

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The shift to a global economy has affected the plans of all nations in achieving greater economic good. Economic interdependence. is the reality. In this century, markets are more important than political ideologies.

For the 3 Californias: California, Baja California and Baja California Sur (Southern Baja), we are especially connected economically. For example, Baja Californianos, (Mexicanos crossing the border) spend over 3 billion dollars a year in San Diego County. For San Diego, that represents more than the combined earnings of the super bowl and the Conference Center.

This regional economy is especially significant when you consider that the state of California, if it were a nation, would be the 5 th largest economic power in the world. When we compare our shared border economy, with other regions of our two nations, we are healthier as a result of the international flow of goods and services.

Given these tough economic times, what does it mean to us as a three California region ? Also, how does one region’s economy affect the other?

A border economy and culture is distinct.. Tijuana, as a socioeconomic region, has more in common with San Diego than the far off Mexican state of Chiapas, on the border with Guatemala. San Diegans (more than 50% Hispanic) have more in common with Northern Mexicanos than Northern New Englanders. Cinco de Mayo is a bigger deal in Los Angeles than in Ensenada.

The post September 11 decline in border crossings, due to security delays, caused a request for federal economic disaster relief for San Diego County merchants. Their pipeline of Mexicano shoppers that normally flood across the border daily, for “bargains”, slowed to a dribble.

Here in Baja, tourism fell sharply as a result of “return to the U.S.” border delays of four to seven hours immediately following 9-11. Southern Baja, which depends more on airline passengers from the states, also suffered a serious decline in tourism. However, hotels in Ensenada and Rosarito have had a good summer run this year; especially since events like the wine festival and the Rosarito fair grow in importance and fame as tourist attractions.

The “drive from the U.S.” tourists have resigned themselves to long border delays. The problem is Mexicano tourists and shoppers in San Diego have still not returned in the same numbers. Cross border messenger services have boomed as a result of the reluctance of Mexicanos and Anglos, living in Baja, to cross the border. My friend Peter Daly’s messenger service is one such example. He often makes three trips across the border in the same day, moving a variety of mail and product: including the retrieving of sushi quality fish in San Diego for Sushi restaurants in Tijuana. His Sentry pass allows him to cross in less than five minutes. His comprehensive import/export license allows him to cross with almost any product.

There has been a considerable drop in new tire sales in the U.S.. Folks are not trading in their tires as often. Nearly new, used tires, imported from the North, are big business in Baja California. New tire costs are prohibitive for many residents. My used tire dealer claims that the slowdown in tire sales has left him with less inventory, thus fewer sales in a strong demand market. Before the economic decline he was able to satisfy his customers with 1500 to 2000 tires per month. Now, he is lucky to “score” 500 a month.

Another sector hit by the economic slowdown are elective medical treatments: cosmetic surgery, dental implants, vision correction surgery, infertility treatments, etc., etc.. Many U.S. residents come to Baja for these medical procedures because of cost savings of up to 70%. My doctor/dentist friends report a sharp decline in “north of the border” patients.

Real Estate for sale - SOLDOne bright spot is an increase in the number of homes purchased by U.S. citizens in Northern Baja. However, the area of increased sales is only from Rosarito to Bajamar. There is a reluctance to come as far South as Ensenada.

Realtors report that the current buyers are at the higher end of the demographic scale. Luxury homes are selling better than bungalows. Often cited reasons for the increase in sales are folks who want to secure a residence and a less expensive lifestyle in Mexico. They are “hedging their bets”, given the future economic uncertainties in the U.S..

Whatever your reason for visiting us, ya all, we love seein ya.

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