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Column 103105 Luken

Monday, October 31, 2005


Mexico’s tourist mecca, for now gone with the wind


By Carlos Luken


Like a twosome among thousands of couples scheduled to vacation on the Mexican Caribbean, in the tourist paradise of Cancun, hurricanes Stan and Wilma blew in one after the other on 120 mile per hour winds that ravaged Mexico’s most successful resort region.


Both storms, with exceptional force even for a hurricane area, all but decimated Mexico’s Caribbean coast – in the same manner Katrina had done along the Gulf Coast in the U.S., and in New Orleans. But too, Wilma stubbornly lingered over the region, flooding and destroying businesses, homes and infrastructure.


The Vicente Fox administration moved swiftly to assess damages following the storm, and relief efforts were initiated immediately. Evacuation centers were set up, security measures taken, and airports were returned to nominal operation in less than a week.


The President also ordered an airlift that flew in food, medicine and other supplies wherever possible, along with relief personnel, to demolished areas still teeming with tourists and area residents, some sick and elderly, who had not escaped before Wilma struck. Estimates of stranded tourists ranged from 20,000 to 35,000 people.


Post Wilma assessments are staggering. With an estimated population of 794,198 people, only three private hospitals in Cancun are in operation. The public hospital infrastructure is completely distressed, power lines are down, and public lighting was destroyed. Yet Cancun is already showing signs of recovery with relief centers receiving food, water and aid material; and power is being restored to hospitals, shelters, water plants, gas stations, and certain stores. Moreover, some drinking water and sanitation systems are coming back on line as electricity is restored.


And while looting was widespread for a time, military and police forces have restored order. Two supermarkets are again open, under heavy guard. Strict security measures are in place throughout the region, with a 7:00 p.m. curfew in Cancun.


The Cancun airport runways are serviceable, and dependable navigation equipment should already have been installed so that commercial airlines can resume full flight schedules.  Some limitations will continue however until uninterrupted electricity can be restored.


Still, transportation is a problem as nearly 100 percent of the Cancun area roads were destroyed, along with 60 percent of city streets. Some cellular communications are restored, and normal telephones have been activated for limited use.


Representatives of the Cancun hotel association estimate damage at US$1.5 billion, considering that 80 percent of all 26,000 rooms were ruined, although most did not suffer structural damages. Mexico’s Tourism Secretary, Rodolfo Elizondo, expects visitor industry revenue losses to reach US$800 million for this season.


On the islands of Cozumel and Isla Mujeres, all ten hospitals were damaged. State officials reported that all 100 hotels were affected, some now operating restaurant and administrative needs thanks to small generators.


Limited airport service to and from Cozumel has resumed, with one flight daily, here again electricity being a problem. Cozumel’s main pier facilities were demolished, further hindering arrival of relief materials, although small ferry docks have been repaired to help evacuation efforts. Public transportation is non-existent, as all roads are destroyed or submerged. There is no electric power as all lines are down, with poles and towers toppled by the winds. There is no running water. And while repair crews have been flown in, all of these needs take time to repair.


Helicopters and ferries are delivering food and water, and supermarkets with operational storehouses are restocking, moving merchandise via military escorted convoys in order to avoid pillage.


But tourism was not the only casualty in this disaster.


The fishing industry was totally decimated; a major part of all agricultural products were destroyed; and most arable land was underwater. These three industries account for almost 70 percent of the region’s jobs.


As well, the catastrophic effects will spill over to the neighboring poverty belt states of Chiapas, Tabasco and Oaxaca that were recently devastated by Hurricane Stan, exacerbating economic problems and unemployment. Conditions that may incite a larger flow of illegal migration to the U.S., and contaminate the already rarified political atmosphere between the two countries.


In the aftermath of hurricanes Katrina and Rita, high oil prices could have provided an alleviating breath by increasing income from crude oil sales. But now Mexico is realizing the folly of not having invested in a refinery infrastructure, instead of limiting its oil industry to the exportation of crude while importing refined fuels and natural gas.


These growing needs could force Pemex, Mexico’s state-owned oil monopoly, to end subsidies to Mexican consumers, irrespective of the political costs. And such a step would have to ignore the already hurtful losses from export industry relocation to China, and its growing competitiveness.



Carlos Luken, a MexiData.info columnist, is a Mexico-based businessman and consultant.  He can be reached via e-mail at ilcmex@yahoo.com.