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Triple threat hits hard at businesses in Puerto Peñasco

Vendors along Rocky Point's main street report business is painfully slow because few American tourists are crossing the border as fears of swine flu and concerns about drug-cartel violence mount, adding to the problems in Mexico's slumping economy.

Vendors along Rocky Point's main street report business is painfully slow because few American tourists are crossing the border as fears of swine flu and concerns about drug-cartel violence mount, adding to the problems in Mexico's slumping economy.

ROCKY POINT, MEXICO – Wounded by recession and widespread drug violence, Mexico’s economy convulsed this week as fears of swine flu shut down schools, canceled public events, kept residents in their homes and turned back American tourists.

Among the hardest-hit communities is the coastal getaway of Rocky Point, the city 215 miles south of Phoenix that has been transformed from tourist mecca to virtual ghost town.

“I don’t know where the gringos are, and we depend on them,” said Fernando Lara, 31, a jewelry vendor, gazing down an empty row of souvenir stands.

Arturo Rodriguez Rico is president of CANACO, the chamber of commerce in Rocky Point, the city in Sonora, Mexico, also known as Puerto Peñasco.

He said that business was down 40 percent before the flu. Then, on Sunday night, major drug-cartel mayhem struck for the first time, with four people killed in the heart of the community.

Police tape flutters in the breeze at Rocky Point’s main intersection, where machine-gun fire riddled a Ford Fusion. Some bullets slammed into a nearby bank. Others struck the victims: two men and two women, all outsiders from Caborca and Sinaloa.

Esau Palacios, selling cow’s-head tacos at the corner, said that business is non-existent because of the one-two punch of the shootings and flu.

“People are afraid,” he said.

Across Mexico, economists worry that the flu outbreak could trigger a complete meltdown as shoppers stay home, restaurants close and workers deal with the financial strain of child care amid school closures.

“The death toll of businesses could be much worse than the number of people who die from the flu,” said Alejandro Álvarez Bejar, an economist with the World Economic Studies Network, a think tank based in Puebla, Mexico.

In the nation’s capital, Lisandro Soto looked dourly around the showroom of his Chevrolet dealership, full of cars and bereft of shoppers.

Outside, pedestrians hurried by in face masks, trying to avoid a virus suspected in the deaths of more than 150 so far in Mexico.

Car-buying was the last thing on anyone’s mind, said Soto, adding, “It’s not just Mexico that is going to get hurt. If nobody is buying Chevrolets here, jobs up there (in the United States) are going to be affected, too.”

Wednesday, Mexico’s Central Bank said that it would likely revise this year’s economic outlook, expected to contract up to 4.8 percent. That could be bad news for the U.S., which exported $151.5 billion in goods to Mexico last year.

In the past, upheavals in Mexico have had other effects on the U.S. economy. During 1994, an armed uprising in the southern state of Chiapas and the assassination of a presidential candidate spooked investors and hastened a financial implosion.

Migrants surged across the U.S. border in the wake of that collapse, known as the “Tequila Crisis.” The United States put together a $50 billion bailout package to get Mexico back on its feet.

Back in Rocky Point, streets are quiet. Vendors outnumber tourists 10 to 1. Restaurant workers – in protective masks – stand on sidewalks hoping for customers. With schools closed, children play tag near their parents’ shops.

“I’ve never seen it like this,” said Wayne Howell of Prescott, in an otherwise empty restaurant with wife Candace. “These poor people. . . . Everything has happened against them. It’s sad.”

Rodriguez Rico, the chamber president, said Rocky Point is fighting false fears, not reality. There is no swine flu in the community, he noted, and no hint of drug killings before this week.

“What can we do?” Rodriguez Rico asked, shrugging in frustration.

The few Americans who braved a visit seemed thrilled to have Rocky Point to themselves. Marlyn Friesen, 62, of Nebraska, said she was having a wonderful time on her first visit to Mexico, despite advisories by the U.S. State Department.

“We heard all about the drugs and people capturing you and not letting you go,” Friesen said. “Then, we heard about the swine flu.”

Friesen’s daughter, Melissa Friesen of Chandler, 42, scoffed at public paranoia. “You can get flu anywhere,” she said. “Besides, my company manufactures Tamiflu, so I have some with us.”

Maribel Catarino, 28, operates a curio shop on Avenida 32. She said she sold one item, a $5 hat, in eight hours. Catarino said she and her husband, also a street merchant, are struggling to support three small children.

She gazed down four blocks of stores without a single American customer, shaking her head. “It’s gotten so hard.”

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