By Mary Jordan
Washington Post Foreign Service
Thursday Page A30

CIUDAD JUAREZ, Mexico -- This border city has been a gleaming El Dorado for the last 10 years, luring thousands of poor Mexican workers to ever-expanding
manufacturing plants offering plentiful jobs at double a farmhand's pay.

But as the U.S. economy slows and consumer demand sags, Ciudad Juarez suddenly has 40,000 newly unemployed workers. People from other parts of Mexico
keep coming, but the jobs here are gone. Street crime has jumped and the number of people sneaking across the border into Texas has surged.

"I have never seen people in the streets like this," said Mayor Gustavo Elizondo Aguilar. "These are rocky times. We are in a delicate situation."

As America goes, so goes Juarez, and so goes the Mexican economy. Mexico is slowing like a trailer hitched to a broken-down truck. After growing nearly 7
percent last year, many Mexican analysts say the economy will likely have near zero growth this year.

The souring economy has turned up the pressure on President Vicente Fox, who took office last December promising to improve wages, health care and schools.
He has already been criticized widely for not delivering on pledges to create 1.3 million jobs a year, to give more scholarships, loans and aid to the poor, and boost
economic productivity.

Mexicans had hoped that the man who defeated the system that ruled the country for 71 years would deliver something better. Fox has warned that poverty cannot
be solved overnight and has asked for patience, but disillusionment is growing and Fox's popularity has slipped steadily.

The Sept. 11 terrorist attacks on the United States further clouded Mexico's economic picture. A prolonged U.S. military response would likely cause a sharp
drop-off in Mexico's important tourism industry, which brings in $8 billion to $10 billion a year.

The two major Mexican airlines already have announced heavy losses due to canceled flights to the United States. They said they expected a protracted slowdown
in tourist and passenger traffic in the months to come and may have to fire more than 1,400 people to trim costs.

The effect on oil revenue, which at $30 billion a year accounts for at least a third of Mexican government income, is unclear. The price of oil has risen sharply since
the terrorist attacks. But Mexico had already suffered a shortfall of $1.3 billion in anticipated revenue this year because of a global slide in oil prices from $25 a
barrel last year to less than $20 a barrel before the attacks.

Fox has tried to expand Mexico's global economic ties in recent months, signing expanded trade agreements in Europe and Asia. But the United States remains
Mexico's economic anchor, now more than ever: Mexico sent 60 percent of its exports to the United States in 1995, and it sends nearly 90 percent today.

"When the U.S. is down, Mexico is down," said Rogelio Ramirez de la O, an independent economist. "In losing export growth, we have lost whatever economic
engine we had."

The export-driven manufacturing embodied by this city's vast industrial parks filled with maquiladora assembly plants has soared, from $50 billion in exports to the
United States in 1994 to nearly $150 billion last year. Buoyed by a booming economy, U.S. consumers seemed to be on a spree and workers here assembled a
new television set every four seconds.

Now, for the first time since the 1994 North American Free Trade Agreement made it cheaper to send goods across border, exports to the United States are
expected to drop. Pink slips are being generated at a record rate; 13 percent of this city's 250,000 maquiladora jobs are suddenly gone.

"We are in a state of emergency," said Hector Carrion, president of the Ciudad Juarez Chamber of Commerce.

The job and wage losses have ripple effects on most city business. Grocery chains are reporting a 30 to 40 percent drop in business, Carrion said. Tightened border
security has slowed traffic so much that many people are staying put, further hurting businesses. Pharmacies, bars and other stores normally filled with U.S. visitors
have been largely empty since the terrorist attacks.

Fox has devoted much of his first year in office talking about how to raise Mexico's standard of living to give people less incentive to flee to the United States. But
now economic bad times are threatening to do the opposite, sending more emigrants north.

The U.S. Border Patrol has said arrests along the border are running at 24 percent lower this year than they were in 2000, and one of the reasons frequently cited
was that more Mexicans were opting to work at home. But that has not been true in this section of the border recently. Since May, arrests are up 11.6 percent in the
El Paso border patrol section, with 3,960 more people arrested from May through August this year over the same period last year.

Fox insists there are still many bright spots in the Mexican economy. In an interview earlier this month, Fox said inflation was at a 30-year low and Mexico had
almost $40 billion in foreign currency reserves, a historic high. He said many of his pledges were made when the economy was growing and that nobody anticipated
such an abrupt slowdown.

In the new climate, Fox is expected to have even more trouble pushing through his plan to revamp the tax system. Fox wants to modernize that system to bring in the
revenue he needs to fund his promised expansions of education, health and other social programs. But the key aspect of the plan, a 15 percent levy on some foods
and medicines, has caused a ferocious public backlash, and legislators have already been meeting to dilute it at least by half.

Mexico has known much more difficult economic times in the past. In 1995, its banking system nearly collapsed and required a $50 billion U.S.-led international
bailout. But still, as Fox struggles to keep his promises in a new economic climate, Mexicans are once again tilting toward despair, no more so than on the streets of
Ciudad Juarez.

Sidewalks here are increasingly filled with newly jobless hawking everything from mirrors to mangoes. The daily markers of life -- restaurants, truck companies,
grocery stores -- also report sinking revenue. To get a few pesos, some laid-off workers are putting on clown makeup and juggling at busy intersections.

Jorge Pasaret, chief of the local office of the national customs administration, said many women who came here to work in factory jobs are scrambling to find work
cleaning houses or offices.

Eduardo Emilio Rolon, 21, came from Veracruz state three years ago, working first in a factory to assemble television sets, then in a shop that supplied company
shirts to the factories. He was laid off from the supply shop two months ago, and now he spends his days at the local unemployment office, looking for work and
learning to use a personal computer.

"Before there were so many jobs there were even signing bonuses," he said. "There weren't enough people for the work available. Now it's completely the opposite.
The word is out -- there are no jobs here; don't come, it doesn't make any sense anymore."

                                               © 2001 The Washington Post Company