Mexico's Fayuca Boom and Bust

From True Tales from Another Mexico: The Lynch Mob, the Popsicle Kings, Chalino, and the Bronx, by Sam Quinones (U. New Mexico Press, 2001), pp. 239-240, 242:

Fayuca. The word meant contraband, illegally imported merchandise: stereos, televisions, calculators, cameras, silk shirts, tennis shoes, blue jeans, blenders, and blouses. The government slapped this stuff with steep tariffs when imported legally as a way of protecting Mexican industry. Tepito brought it in illegally. To Tepito, fayuca meant easy money and lots of it. Despite the official prohibitions, Mexicans gorged themselves on the outside world's baubles. Tepito was their dinner table. It was a time tailor-made for the Tepito mind-set. In the go-go era of fayuca, what mattered was not what you sold or how you brought it in but how fast it would move. The trickle of suitcases containing small items like perfume, watches, and jewelry in the mid-1970s became, by the 1980s, torrential truckloads of twenty-one-inch televisions and full home stereo systems.

To a government running a desiccated economy, it quickly became clear that the contraband did two things. First, it appeased the middle classes, who didn't really care where they bought this stuff so long as they could buy it. Second, fayuca also helped dampen inflation. The prices in Tepito were usually well below what the same goods sold for in the stores that had legally imported them. "The authorities wanted to lower prices without really entering the global economy," says Gustavo Esteva, a sociologist who lived in Tepito for several years during the fayuca boom. "So the government used Tepito and the fayuca to fight inflation." Though fayuca was illegal, it was bought and sold openly in Tepito. The regime couldn't appear to allow it in and yet didn't dare keep it out. Eventually the industry was carved up among Tepito's fayuqueros, commandants of customs, the judicial police, the highway police, and other government officials. After a while the highway police in San Luis Potosí, midway between Laredo and Mexico City, decided they wanted their cut too. The wife of President José López Portillo, Carmen Romano, was said to be one of the greatest fayuca importers.

The arrival of fayuca was a key moment in Mexico's economic history. Fayuca was in its own way as important in rocking the regime's credibility as the 1968 Tlatelolco [student] massacre, the periodic peso devaluations, and the fraud-riven elections of 1988. Its presence showed that the protected, state-run economy no longer had a prayer of providing what Mexicans now expected out of life. Though Mexicans talked economic nationalism, they voted with their feet and mobbed Tepito, looking for the smuggled imports.

And for the first time Tepito got rich. In Tepito the fayuquero took the place of the boxer as the model for economic advancement, though in this case the road to riches was accessible to thousands of people and few of them missed the turnoff Since the fayuca, Tepito has produced no great boxers. Instead Tepito's fayuqueros took on the status of legendary renegades; at least two B movies were made about them....

Mexico's entry into GATT, then NAFTA, brought the fayuca boom to an end. The Mexican government began to lower tariffs on consumer goods. Customers began finding what Tepiteros were selling in legitimate stores that offered service, guarantees, and receipts and didn't have thugs around the corner waiting to rob the clientele. When the peso was devalued in 1994, sales plummeted further. People still go to Tepito, since merchandise is a little cheaper and carries no sales tax. But the fayuca gold rush is a memory.