TBY talks to Oscar Jesús Escobedo Carignan, Secretary of Tourism of Baja California, on the unique role that the state plays in Mexico's economy and tourism sector.

What are the main strengths of Baja California as a tourist destination?

Baja California is an extraordinary state. We have around 800 kilometers of Pacific coastline and 600 kilometers on the Mar de Cortez, which is known as the “Aquarium of the World." We have stunning mountain scenery and, also, a 200-kilometer border with California, in the US, and 32 kilometers with Arizona. We are also wine growers, and account for around 85% of Mexico's overall viticulture output, having won several awards in 2013. In addition, we offer the best gastronomy tours in Baja California. One can buy a beachfront property for around $1,000 per sqm, located just half an hour from San Diego, the wine country, and the Mar de Cortez. Baja California will eventually have more than 100 resorts and over 20,000 condominiums.

What is the importance of Tijuana for Baja California?

Tijuana is home to approximately 51% of the state's population and around 52% of the state's economy. It is an international city with an airport through which 5 million passengers transit. We are also building a bridge across the border with the US to serve southern California air travelers. We have seen considerable investment from Japanese, Korean, Chinese, European, and US companies. Today, business is tough and unemployment is at around 4%, but usually Tijuana has around a 2% unemployment print, and it's known as a city of opportunity. Around 80,000 people are returned each year by the US immigration police. Out of that number, perhaps 50,000 stay to live in Baja California, and many in Tijuana. This is a major challenge, but one I believe we can handle. Meanwhile, we have the busiest port/border in the world where, on a good year, we see 50 million border crossings, each way.

“Tourism represents roughly 11% of the state's economy and around 8.8% of the jobs in Baja California."

What are you doing to attract people from all over the world?

Tourism represents roughly 11% of the state's economy and around 8.8% of the jobs in Baja California. Prior to 9/11, we were considered the most visited city in the world, with more than 25 million tourism arrivals annually. The bracero program was also established, which allowed workers from Baja California to cross the border to work in Californian fields. Such links with our neighbor naturally increase interaction between our citizens. Our duty free zones are also attractive for investors, although the new tax structure being implemented will create some challenges. For example, VAT, having risen to 16%, is a barrier to retail activity. Across the border the rate is just 8%.

What sectors will boost the regional economy and tourism?

Medical tourism is a huge opportunity for Baja California. The quality of our staff and medical professionals is top notch. Most of our doctors are bilingual, and many are bicultural, holding degrees from universities in the US. Aside from that, the film industry has great potential, and we could bring a competitive edge to California through companies filming in Baja California, where, incidentally, we also have a film school. We have a great history in film, and the number of awards local cinema has received is evidence of this. San Diego just closed its film commission and I believe we could work together to rejuvenate it. We are also developing the rest of the state to feature renewable energy, and have a self-sustaining development 68 kilometers south of San Felipe. Tourism is another area of great potential, and we have just recently signed new contracts with cruise lines. Ensenada will be the second most-visited port in Mexico in 2014, and we are poised to build a new port between Ensenada and Los Cabos, which should help the cruise industry in the near future. We are working hard at these projects to make Baja California a world-class destination.

What will be the main focus of foreign investment in Baja California?

We are the best state as far as labor relations between investors and workers are concerned, and have good relations with the trade unions. We basically have great working relations. This ensures a comfortable commercial environment with a superior return on investment. There is interest from China in our rail system, from Spain in tourism, and from the US in industry, renewable energy, and tourism. Despite tax reforms, we are set to have a strong second quarter in 2014. And looking further ahead, renewable energy stands to become a strong market, to which California itself has made a commitment. Baja California has the best gas pipeline in the country. All of our cities are connected to the natural gas pipeline, which makes our industry competitive. Ensenada hosts the most scientists per capita than anywhere else in Mexico. We also produce more engineers and doctors. A great deal of our budget goes into education, and we offer a range of universities. In terms of infrastructure, we want to build a port in Sauzal, and a rail system to connect Sauzal to Tecate, with a separate line crossing the border, perhaps in 2014. Numerous vehicle-manufacturing plants have expressed interest in this because we could transport the parts from the eastern US and export via the border. Meanwhile, we also plan to build a domestic port for cruise ships in Santa Rosalía and a marina in Rosarito.

What strategies are you following to address the negative perceptions of security in the country?

Security is not an issue today. Six years ago, we experienced problems, in the 2007-2008 period. Currently, that negative perception remains, although in truth we have advanced considerably. The rest of the country wants to implement the strategy that Baja California used to raise its profile. We intend to establish travel alerts that are offered city-by-city, or by region, instead of Mexico as a whole, and we are working together with the US to eliminate this stereotype.

What is the role of Baja California, with Mexico's fourth largest city, in the development of the country?

According to a saying in Mexico, the south of the country relaxes, the center of the country thinks, and the northern part works. We think and work in Baja California, and our anthem describes us as the country's strong arm. Those who come to live in Baja California are of value to it and to the country. Mexico's interior thinks that we're better protected, but there's no other reason for this than pure old-fashioned hard work.

© The Business Year - May 2014