Bordering on Chaos

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Mexican and American towns suffer from peso jitters

The border of Mexico and the U.S. is going through the most important crisis in the past few decades," declared Mexican President José López Portillo on a visit to Tijuana. If anything, that was an understatement. Last month's devaluation of the peso created an absolute mess for businesses in both countries. On the Mexican side, supermarket shelves were stripped clean of basic necessities by Americans who found their dollars worth three times as many pesos as they were a year ago. On the American side, merchants whose lifeblood is Mexican patronage were left standing beside silent cash registers.

In a frantic attempt to find stopgap solutions, the government of Mexico's outgoing President threw a one-two punch that has now transformed this confusion into surreal chaos. It issued a vague edict forbidding Americans to take home certain foods from Mexican markets, and it imposed ill-conceived currency restrictions designed to stem the tide of money flowing out of the country. The result: border towns on both sides are suffering even more.

The food-export ban was issued because the government believed, with some justification, that Americans were cleaning out Mexican stores of staple foods, many of which are subsidized by the government. By setting the official exchange rate at 70 pesos to the dollar, the August devaluation sent the price of a dozen tortillas down to the equivalent of 27¢ (vs. 82¢ on the U.S. side of the border) and a pound of sugar to 7¢ (vs. 30¢). These items, along with eggs and meat, were among more than two dozen restricted for export.

Mexican customs officials are enforcing the new controls haphazardly at best. Neither shoppers nor officials seem to know how many of which items can be taken across the border, or what is supposed to happen to those caught with too much. "People just don't know what is going on," said Alex Harrison, a retired American buying Kahlua liqueur (not banned) in Juárez last week. Among the horror stories is the saga of Bob Walz, 60, of Tucson, who filled spare tanks in his pickup truck with 250 gal. of diesel fuel in Mexico at 16¢ a gal. He was arrested at the border for "disrupting the economy of Mexico" and spent five nights in jail.

"The list is very confusing," admits Octavio Muñoz Corral, president of the Juárez Chamber of Commerce, who is futilely struggling to persuade Americans to keep buying below the border. Indeed, the uncertainty has been the main factor keeping Americans from shopping for much of anything in Mexico. "The tourists are scared away," says Salesman Manuel Vasquez, surveying his empty marble-products shop in Juárez, which logically should be packed with Texans seeking more for their dollar. "Our business is off about 50%. Capitalism works. This type of stupid socialism doesn't."