RSS FeedA Week in Mexico
This is a posting from December, 2006 trip to Mexico. We stayed at the Eldorado Royale, a Karisma Resort.
PLAYA DEL CARMEN, MEXICO (December 10, 2008) — There I was in a foreign country probing into the underbelly of Mexican life…
Yeah right. Talk about media deception.
Alright, I wasn’t in Mexico City covering the inauguration of President Calderon. Although I did watch on Mexican TV and I don’t understand Spanish. And I wasn’t examining the effects of the Mexican drug trade or the migration of Mexicans across the U.S. border.
No, I was near Cancun, the Mayan Riviera to be precise, on a working vacation. Can you sense my writing’s tan shades?
Still, I was able to observe some issues thanks to a number of interviews with regular Mexican folk and some people who do business in Mexico. My observations will be written in a series of postings to follow.
I’ll cover a number of different topics including travel, immigration, and the economic conditions that most Americans only see from a far. Again, I was near Cancun, nowhere near Mexico’s political and economic epicenter. But there is still a ripple of information I can report to you that will give you some perspective of our neighbors to the south.
I also was fortunate to have enough good reading material – including a survey by The Economist on Mexico.
We stayed at the Eldorado Royale, a Karisma Resort. It’s an all-inclusive resort meaning you had a concierge always available and you didn’t touch your wallet. Yes, there were plenty of mai tais, pina coladas, and marguerites on the beach. The food was incredible and cutting edge – despite the fact it was included in the price. And the Mexican warmth beat the December chill in Las Vegas.
Despite all that good living, there was plenty of time in a cabana reading and thinking.
Lubo Krstajic
Lubo is a giant. He’s 6-foot-8, a former player on the Kosovo national basketball team about 15 years ago.
But he is also huge in the travel industry in Mexico. Lubo is co-owner and Executive Vice President for Karisma Hotels & Resorts.
Lubo hosted a dinner for five of us at the Italian restaurant at Eldorado Royale. It was a fabulous meal. The osso bucco was as tender as Ferraro’s in Las Vegas, considered by many the best in the world. The wine was a Cabernet Sauvignon from California’s Far Niente Vineyard. However, the conversation was about The Balkans.
Lubo tells his fascinating story. He is a Serbian, raised in the embattled Kosovo region of Serbia, formerly in Yugoslavia. That region is now controlled by a United Nations Administrator after NATO bombings halted the Kosovo civil war. Albanian Kosovars, who are mostly Muslim, wanted autonomy from Serbia whose government was accused of brutal repression, similar to the repression and cases of genocide in the Bosnian War in the mid 1990s.
Long before the civil war in 1999, Lubo was forced to leave the region. He told me that he and other Serbs couldn’t live in Kosovo. They were harassed by Albanian Kosovars, Lubo said, for petty things like unwarranted traffic violations. Lubo says he played on the Kosovo national basketball team with Albanian Muslims. They had no problem playing basketball together. But Lubo said the two people – Serb and Albanian Muslims – living together was impossible.
Lubo was also restricted from moving and starting a career in Belgrade, the capital of Serbia. The Serbian government apparently didn’t want a flood refugees leaving Kosovo and moving into Belgrade.
So, Lubo left for the Dominican Republic. He worked in the resort industry and then learned the business and built some resorts of his own that became a chain. He eventually sold that chain for a nifty profit and then moved onto his new endeavors at Karisma.
Lubo is very successful. He lives in Miami with his German wife and two kids, but he is constantly in Mexico at his resorts. What was impressive about Lubo was the respect he attracted from his employees. It wasn’t a fearful respect, but a thankful respect. Even though we were honored guests, I never felt he treated his employees any less. He enjoyed good laughs with us as he did with them.
He also showed off his resorts with an infectious enthusiasm. He had an incredible attention to detail about everything in the resorts that will bring his customers a better experience. For instance, everything is designed to make a couple feel comfortable and romantic. He built swim-up casitas, so you don’t have to go to the pool. You can be alone and also enjoy the pool at your room. The activities are set up for couples to enjoy them together. And even at the night clubs and entertainment venues have swing seats – with just enough room for two. Simple yet effective.
Alex, Jorge, Chewy
Lubo drove us along the lush Mayan Riviera. If you didn’t see palm trees, you might think you were traveling through a Carolina summer. The only thing interrupting the greenery of many trees were the cinder block buildings being built.
“Look at all that’s happening here,” Lubo said pointing to mile after mile of construction along Highway 307. Most of the building work was for new resorts. Although it’s not the construction boom I see in Las Vegas, the activity is substantial.
“People here don’t want to go to the United States,” Lubo said. And I heard that from many Mexicans in this region of the Yucatan Peninsula, just south of Cancun. It’s not true in many of the southern regions of Mexico where tourism and factory jobs don’t exist as much as in the north.
Back at the Eldorado Royale, we had plenty of time to talk to the bartenders and waiters who took care of us. They were great guys who were willing to share their stories.
Alex was one of the bar waiters. He’s in his late 20s, tall and thin, but athletic. He told me he left Houston, Texas even though he had a valid green card. He worked construction and then played professional soccer for the MSL team in Houston.
“Why did you come back?” I asked.
“To care for my mother,” he said.
Alex is the youngest of eleven kids, so the care of his sick, single mother fell to him. Still, he was not bitter about missed opportunities in America.
Jorge was our main bartender. He is a quiet man with a sheepish smile. At 40, he believes he is old. At first, we laughed. But then I realized he was being honest. Although life expectancy is around 72 for men (77 for women) in Mexico, which has gone up lately, Jorge was still beholden to the jobs that are created by Mexican tourism. When I asked where most Mexicans go on vacation, Jorge and some of his fellow workers say they go back to the villages where they were born to see family.
Jorge, like many others at the Eldorado Royale, lives in Cancun. He is bussed forty five minutes to an hour each way to work, because they cannot afford homes or apartments near the resorts. The land prices are too expensive. As a result, he works at night, so he is sometimes asleep only hours before his daughters wake for school.
Buying a house in Mexico is difficult. Banks charge interest rates somewhere in the 30% range, according to some of the Mexicans I met. The only way to buy a house is cash. That’s how Jorge did it. But the way Mexicans buy homes may be changing — thanks to Wal-Mart.
The Arkansas-based retailer is regarded as the Evil Empire by many Americans and many small retailers. I understand the anger. But Wal-Mart has also pushed the world to lower prices and more efficient distribution of products in a world controlled by Chinese manufacturing.
Wal-Mart is close to offering banking services in Mexico. (Read the post from my friend John Ray about this and the free market hypocrisy in the United States.)
Nearly 80% of working class Mexicans has no bank account. Most Mexicans banks carry too many restrictions like paper work and minimum balances. Of course, Wal-Mart is hoping to drive more customers to their stores and products. But eventually, Wal-Mart will start providing loans and mortgages for homes. And once credit is provided to a small community, growth in housing and business will happen.
Let me give you two examples. The first is Muhammad Yunnus, the winner of the Nobel Peace Prize. He just received the honor today. His concept of micro banking in Bangladesh has been proven to move people out of poverty. I first read about him three years ago in Steven Covey’s book, The Eighth Habit. If you haven’t read about Yunnus yet, try his website. If there is such a thing as a feel good economic story, this is it.
The best example of the success of extending credit is Ireland. David McWilliams’ book, The Pope’s Children explains how in the 1980s credit was one of the main reasons that led to the real estate boom and the Celtic Tiger economy in the 1990s that remains today. Remember, Ireland was a Third World Country twenty years ago. Granted, Ireland has some other major benefits that Mexico doesn’t. The first is an educated population. The second is a glut of investment dollars from European, namely German, retirees. The third reason is peace. Sectarian violence ended once Ireland’s government and people forfeited its desire to unify with British-led Northern Ireland.
But still, the extending of credit will help Mexico. Wal-Mart’s presence will also force other Mexican banks to compete for the Mexican populace which will lead to better rates and a growing economy.
Jorge, Alex, and Chewy and Donata, two other bartenders, didn’t know about Wal-Mart’s new plans. When I mentioned it, they nodded with approval.
Still, these guys were all pessimistic about Mexican politicians. They said, “They tell you something and then they don’t do it.” No translation needed. It happens in any language.
The big problem seems to be the inability of the police to stop the drug trafficking – especially since the police appear to be a part of it through bribes and intimidation. So, these guys are not optimistic that newly-elected President Calderon can do much to stem the violence of the three major drug gangs throughout Mexico. Although the problem on the Mayan Riviera, if there is one, was certainly out of sight from us.
Still, Jorge is more optimistic about his daughters’ futures. He said they have a chance to go to college, which he didn’t. In fact, he barely finished high school and he admits his reading and writing skills are not good. But he said he would try to correspond by email – when he can get to a computer.
There are signs for that optimism in Mexico’s scientific future. The Technico, a technology partnership between the Mexican government and business, has set up 30 technology campuses around Mexico. And here’s a fact that most Americans need to pay attention to. Since 2003, because of Technico, Mexico has turned out more engineers than the United States, China, or India. That comes from November 18, 2006 edition of The Economist and its survey on Mexico.
The future of Mexico is brighter than most Americans think.
Trust But Verify
While spending time in Mexico, Ronald Reagan’s famous Cold War-ending phrase kept repeating in my mind: trust but verify.
Americans should trust the desire of many Mexicans and other Latin Americans who want a chance for a better life here. But we also need to verify who crosses our borders. In other words, be optimistic but vigilant.
This is a balancing act of two opposing views – some would say extreme views. But I think we need to listen to the Minutemen and the Hispanic advocates equally.
The Minutemen want to protect our borders. Some of them may seem bigoted. But I believe the majority of them have reasonable goals and fears – especially in our post 9/11 world. I also have a good friend who is a homicide detective in Phoenix and he says the murder rate climbs when the migrant workers return. We’ve also seen the stress on social and medical services in other large cities like Los Angeles and Dallas.
However, as many Latino advocates tell us, Americans need to realize, like it or not, Mexico and the Hispanic population is becoming a bigger part of our society. Economically, we need this infusion of Latin, low-cost workers now. They help keep down prices for many products such as food and a wide range of services.
In the future, we will need them even more as our society ages. Those Hispanic workers of today and their kids will be a major part of our work force taking care of retired baby-boomers. In other words, be nice to your gardener, his kid may be saving or prolonging your life in decades to come.
Miami Herald columnist Leonard Pitts, Jr. says it best. To see the future of America, we should look at the complexion of Miami’s population today. He writes, “for most of the years of the American experiment, our dialogue about race and diversity has been strictly bipolar: black and white, minority and majority. But by 2050, the conversation will be three-way — black, white and brown — and none will have dominant numbers. We will all be minorities.”
With that, here are some proposals, some a little controversial.
1. Beef up border patrol and electronic surveillance are needed to stop illegal workers, terrorists, and the drug cartels. Illegal workers drain social services in some cities while taking away jobs from unskilled American workers. Terrorists can easily use Mexico as an unnoticed port of entry. And the violence among the drug cartels is now spilling over into the U.S, according to a report by Stratfor (www.stratfor.com).
2. No fence needs to be built. It’s a waste of money. If anything, it’s symbolic.
3. Beef up enforcement of U.S. businesses should reduce the flow of illegal immigrants. That is, if you believe that most border crossers are only looking for work. Penalties on business could dry up those jobs.
4. English only laws will help immigrants who legally work here. Yes, some laws seem discriminatory. But look at the immigrants in decades past from Europe who didn’t have bi-lingual laws. They survived and so will today’s immigrants.
5. Americans, conversely, need to become fluent in Spanish and other languages – namely Chinese. This is not to placate foreigners, but to help our kids achieve success in the future world economy.
6. Economic union, but not a political union, would force Mexico to use the U.S. dollar as its currency and drop the peso. Check out my April 17, 2006 podcast interview with Clyde Prestowitz, the author of Three Billion New Capitalists who offered this idea originally. To me, it makes sense since most Mexicans come here to work and send dollars back to Mexico. Let’s give them dollars and a more stable currency that could hopefully raise Mexico’s production capacity to compete with China. There have been a number of proposals for a North American Union similar to the European Union. Politically, that wouldn’t work in the United States, Canada, or Mexico. Look at the political problems in Europe, but the euro has not been too bad for Europe’s economy.
7. Legalizing and controlling drug trade would hopefully reduce the demand for drugs like cocaine and heroine. This is highly controversial and it could lead to a higher rate of drug abuse. But it might reduce the power of the drug cartels and give the government more revenues. Nothing is perfect.
One thing that needs to be said comes from The Economist and its recent 14-page survey on Mexico. It is time for the Mexican people and their government to step up and take advantage of some opportunities now.
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