Baja California offers great potential for developing Retirement SEZ on the Pacific
By George ELIOT
Mexico can breathe a sigh of relief: US President Donald Trump has not laid out any neocolonial ambitions for any parts of Mexico, after all his bluster about taking over Canada, Greenland and the Panama Canal.
Many areas of Mexico are growing thanks in part to their connection to the USA: The economy of the Yucatan Peninsula is developing based on its tropical Caribbean tourism and proximity to Florida and Texas, across the Gulf. While many parts of northern Mexico that border the four US states by land (Texas, New Mexico, Arizona and California) have booming maquiladora industries and complex supply chain operations closely integrated with those of the US.
However, the biggest unpolished pearl that Mexico has is its Baja California Peninsula. The Mexican states of Baja California (population: 3.8 million) and Baja California Sur (population: 0.8 million) cover the north and south of the peninsula, respectively. The three biggest cities of Baja California state all border the US state of California (Tijuana: 2.2 million; Mexicali: 1.1 million; Ensenada: 0.4 million). This leaves less than a million people scattered across the entire peninsula of 143,000 sq km.
The most remarkable and potentially lucrative part of this long peninsula is its 3,300 km of coastline: as long as the entire coastline of Sweden, or double the coastline of Portugal. Coastal zones have two main economic uses: as ports and as real estate. For example, seafront investments underlie the business success of Hong Kong billionnaire Li Ka-shing, who used to say that his port business could never go wrong: if the shipping industry went down, he could always convert his ports into prime sea-facing residential real estate.
Despite its desert climate, Baja California has better weather than most of Arizona. The resort area of Los Cabos has winter temperatures that are 6 degrees Celsius warmer than Phoenix and summer temperatures that are 6 degrees Celsius cooler.
However, the biggest game changer is the dropping price of solar energy and ocean water desalination. The combination of these two trends could soon turn the arid peninsula into a string of coastal special economic zones (SEZ) that seed some industrial and tourism activities and, even more significantly, concetrate real estate development and thus form hubs for the creation of retirement communities. While lack of freshwater has been a constraint to development so far, the use of ample tropical sunshine to generate cheap solar electricity that then gets used to desalinate sea water is already an economically viable business solution for opening up new areas for coastal real estate.
In order to benefit from this huge economic potential, Mexico will need to create a legislative framework that encourages the development of Retirement SEZ on the Baja California peninsula. Part of this would be allowing foreigners to spend close to a full year on the peninsula (rather than the standard limit of 3 months every 6 months that many countries apply to foreign nationals).
(Source: Wikipedia)
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