Another Long Year
medical services, the cross-border
economy will endure more pain in 2009
year ago, we observed 2008 would be pivotal for Baja’s economy
in that our important neighbor to the south either would hold
the course steady or suffer a reversal, undoing the gains of
recent years. Much would depend on
border policies, the second and retirement home markets,
tourism, maquiladora output and demand and, finally, whether the
perception of safety would improve for visitors traditionally
eager to sample the rich diversity and bargains from
A year ago,
we sensed that the United States
was heading into a recession. Although the clouds of pessimism
were hanging heavy over the land, national and local experts
were predicting sunny days ahead, with many saying we were at or
near the bottom. Last January turned out to be a relatively good
month. In fact, it was really the last good month.
nothing on the horizon to suggest the situation in Baja will
change in 2009, as there is little to indicate things will
improve much in the United States over the next 12
months. Thus, Baja will suffer another year of economic
problems. Some bright spots beckon, but we will get to those
First A Look Back
we can now declare 2008 to be in many ways among the worst years
in the history of Baja California as a
state. Much pain was delivered from the north, as the U.S. housing
industry and financial sector melted down and jobs evaporated.
Oil prices shot above $140 a barrel, pounding cross-border
businesses. Lenders stopped lending.
Worst of all, U.S. consumers
lost faith in the future.
As though the U.S.
multi-sector meltdown wasn’t enough to drive a stake through
Baja’s economic heart — and it was — Baja also suffered from its
own internal problems — the escalating acts of violence from
responsible for 70 percent of the economic livelihood along the
Rosarito-to-Ensenada corridor, fell more than 50 percent. Home
sales to Americans who had created a real estate boom along
Coast corridor declined to
record lows. Numerous high-profile and quality developments came
to a standstill. Perhaps the highest profile project, Trump Towers,
has shut down for two to three years, with others following
the manufacturing industry that feeds much of
Tijuana’s economy has fallen, with the mostly
U.S., Japanese and
Taiwanese-owned businesses dramatically decreasing production
The piñata of
bad news rained new troubles with each month’s swing. Border
crossing waits continued to be unbearably long, further
discouraging visitors in both directions. Crossings into
and points south also were discouraged by fears of violence.
stagnation led to a peso devaluation, making it more expensive
for Mexicans to buy not only imported retail goods but also for
businesses needing equipment and services from
suppliers that might increase the marketability of their
products. Even Mother Nature was a foe, delivering heavy rains
in December that all but sealed off large parts of
and Rosarito, making it nearly impossible to navigate through
The Road To Recovery
accounting teaches that market losses suffered in one month are
felt in future months. Likewise, losses suffered for an entire
year are felt for several years unless subsequent market gains
are extraordinarily huge. Such a scenario is unlikely.
about those potential bright spots?
with cash on hand, real estate is a bargain waiting for
visionaries. In two or three years the pent-up demand from
retirees in the U.S. seeking an affordable and
higher quality of life will be released, increasing home sales
in Baja. Buyers seeking affordable coastal second homes, whether
condominiums or single-family homes, also will return.
agencies in the United States and Mexico are committed to spending
hundreds of millions of dollars on new border crossings and
improvements to existing crossings. These efforts have moved
from planning to funding stages and really will happen, greatly
improving passage between the nations for goods and people.
bright spot is the availability in Baja of high-quality medical
services at savings of 50 percent to 80 percent from
alone has more than 7 million uninsured residents and countless
more who are underinsured. As word continues to get out about
these treatments, more people will be willing to endure today’s
border waits in exchange for saving hundreds or thousands of
sector in Baja will begin to thrive in 2009, creating new
opportunities and employment, which in turn will begin leading
Baja back into prosperity.
Patrick Osio Jr. can be reached at
The veteran consultant has participated on writing scripts for
documentaries on Baja California real
estate, medical services, and retirement information at
This article first appeared on the January
2009 issue of the San Diego Metropolitan Magazine