An Economic Give and Take With Tijuana

In its bid for megacity status, San Diego is embracing its international neighbor, Tijuana, in a cross-border experiment in regional economic integration.

Once a shanty village of a couple hundred thousand, Tijuana has become an economic bright spot in peso-depressed Mexico. Now dubbed the "Tijuana-San Diego corridor" - and lined with new plants bearing names like Sony and Hitachi - the region has emerged as the television-manufacturing capital of the world.

Local leaders on both sides of the border hope the economic experiment will serve as an international model for the next century.

"Perhaps the key activity going on here since the end of the cold war has been the perception by San Diego and Tijuana leadership that it was necessary for both to embrace the concept of a region-wide, international trading center," says Charles Nathanson, director of public policies for the University of California, San Diego's extension.

Driving the regional concept forward is the rising phenomenon of cross-border commuting: The 800,000 border crossings a month represent Tijuanans who work here and San Diegans who work there. The transfer generates $2.8 billion a year for San Diego, more than the combined spending of visitors to the America's Cup, the Super Bowl, annual use of the San Diego Convention Center, and the GOP convention (expected to bring in $82 million).

"Tijuana-San Diego is at once the biggest opportunity and confrontation of first- and third-world countries on earth," says local columnist Neil Morgan, author of 11 books about California. "The international tug-of-war that will ensue economically for this area has not even begun to be understood in Washington."

Four years ago Tijuana businessman Raymundo Arnaiz joined a cross-border group of 100 business, government, and education leaders known as Dialogue. It is credited with initiating valuable demographic surveys and case studies of successful cross-border economic opportunities. "Businessmen on both sides ... have begun to wake up to the possibilities of complementing one another rather than competing," he says.