Dispatch From Oaxaca

What happens when a tourist destination becomes a war zone?

Will Scanlan stands in front of a burned-out Volkswagen outside his store

OAXACA CITY, Mexico—In the fall of 2005, when William Scanlan—then an MBA student at St. Edward’s University in Austin, Texas—wrote a business plan for opening a Mail Boxes Etc. store in this state capital, the 33-year-old entrepreneur never imagined that he would need a contingency plan for staying open during a civil rebellion that lasted more than six months and resulted in at least 17 deaths and the occupation of the city by the federal police.

One afternoon in mid-December, Scanlan stood in his store, which is located in a cheerful red-and-white building directly across a wide street from the city’s university. “It’s been very stressful and scary. This street was barricaded for weeks,” said Scanlan.

On Nov. 2, several thousand protesters who had been encamped at the university squared off against 4,000 police who were trying to remove barricades the demonstrators had erected. Scanlan absent-mindedly picked up a rock that was hurled into his business by a protester. “One of my souvenirs from the revolution,” he said, stoically.

Civil unrest reaches Scanlan’s business

On this particular afternoon, the famed cobblestone streets of Oaxaca, a city of 750,000, were jarringly quiet. The day before, Flavio Sosa, the corpulent, bearded leader of the protesters, had been arrested and jailed in Mexico City on charges of sedition and incitement of violence. Block after block of lovely old colonial buildings, blackened with graffiti and soot from fire bombs, were finally getting fresh coats of paint.

The main square is a confusing mixture of hope and dread. Several hundred federal police officers, armed with machine guns and riot gear, are still camped there in dark tents. Yet ordinary Oaxacans have planted hundreds of rows of poinsettias in the flower beds, many with handwritten messages: “We want to live in peace”; “No more violence”; “Tourists, please come back.”

To Americans, what Scanlan euphemistically refers to as “the situation” in Oaxaca highlights the political and economic divisions and the unsteady rule of law within Mexico. From U.S. press reports, it’s difficult to know which side to cheer for—the protesters who convened under the umbrella of an organization known as APPO on July 17 and declared itself the governing body of Oaxaca, or the state’s governor, Ulises Ruiz, who many accuse of corruption and repression.

The view from Mail Boxes Etc. provides a window into how the rebellion went wrong. What started as the 25th annual teacher’s strike for wage increases erupted into violence that has left the city’s economy in ruins. “The movement may have started with good intentions,” said Scanlan. “But it ended with a bunch of thugs kidnapping the city.”

Scanlan grew up in an old South Texas family with ties on both sides of the border. As an infant, his first sentences were in Spanish. During a 1994 trip to Oaxaca, he met a variety of folk artists. He bought their work, and in time acquired so much folk art that he decided to open a gallery.

During his final semester in business school, he wrote a business plan for an art gallery, and he soon realized his biggest problem: There was no reliable or economical way to ship the art from Oaxaca to the United States. He changed directions and decided to open a shipping business in Oaxaca. In December 2005, he purchased a franchise for a Mail Boxes Etc. store in Oaxaca. His store was the 32nd MBE in Mexico and the only one owned by an American.

After months of untangling Mexican red tape, he rented a building and had a successful grand opening on Aug. 17. Local TV crews enthusiastically covered the event. That night, Oaxaca seemed eager to embrace a business whose sole reason for being was to connect the ancient city to the outside world.

During his first month, Scanlan did about $13,000 in business, the best month in the company’s 13-year history in Latin America. A few of Oaxaca’s 2,000 or so expatriates rented mailboxes; Scanlan signed up for Netflix. “Life was sweet,” he says.

Then all hell broke loose. On Oct. 27, Brad Will, an independent journalist from New York, was shot and killed while filming a police shootout at barricades on the edge of the city. Both the Burger King and McDonald’s, located not far from Mail Boxes Etc., were firebombed.

In the third week of October, as he loaded some of his equipment into his Suburban, a man wearing a ski mask roared up on a motorcycle. Another man sat behind the driver carrying a homemade bazooka and rockets.

“Where are you going?” asked the driver.

“This is my business,” Scanlan explained. “I’m moving basic supplies home to protect it from vandals.”

“You need to let someone know what you’re doing,” said the man in the mask, angrily. “You need to ask our permission.”

Then he told him that APPO was protecting local businesses and that his was safe. “You have our permission to stay open,” said the masked man.

Later, Scanlan told the man he needed his name, so that if there were trouble he’d be able to tell the protesters who had authorized him to stay in business. “Tell them to ask for Nacho,” said the man.

For the next five weeks, the chaos intensified, and, all over the city, business came to a standstill. Next door to Scanlan’s store is a small company that manufactures jeans for various U.S. outlets, such as Sears, Sam’s Club, and the Gap. Arturo Fajardo, the store manager, was forced to close his business for the entire month of November. “We can never recover from what we lost in all of this,” said Fajardo. “Working people feel caught in the middle: We don’t like APPO burning our cars, our streets, our buildings—and we can’t trust our government, either.”

Through it all, Scanlan never considered pulling up stakes and moving back to the States. “Things were going too well before the situation exploded,” he said. “I had too much money and emotion invested to just walk away.”

During my visit, Scanlan and I drove through the forested mountains outside Oaxaca City to visit artists. We stopped in Teotitlan at the studio of Demetrio Bautista Lazo, a rug weaver who is famous for his use of natural dyes. Demetrio’s business is down by 90 percent—like other artisans, he depends on tourists. “APPO says they are fighting for the indigenous people, but it’s a lie,” said Demetrio. “I am a Zapotecan, native to this place. Their acts of violence have hurt indigenous people, not helped. The way to solve problems is not to burn the town down and wreck the economy.”

In the village of Ocatlan, we visited the four Aguilar sisters, all artists, who live side by side with their extended families. Seated on the dirt floor of her patio, feet tucked beneath her, Josefina formed a clay figure of Joseph for a nativity scene. “We’ve done almost no business at all,” the 63-year-old said. “Everything has stopped.” The only piece she sold in five months was one commissioned by a collector from Santa Fe, N.M., of former President Vicente Fox surrounded by rebels.

Josefina was the only Aguilar at work in her studio that day. Her other sisters were working in the fields picking corn and vegetables. “My mother has nine sons and daughters,” said Isabel, Guillermina’s daughter. “We have to eat.” If a rebellion makes sad paupers out of its oldest, most successful artists, it’s hard to consider it a success.

In early December, Oaxaca inched toward normalcy. One weekday morning, Scanlan arrived at work around 10 with his black Lab Diego by his side. Two boxes of rugs were packed, one headed for Santa Fe, N.M., and the other to Montana. A folk-art collector from Berkeley, Calif., called to tell him that a shipment had been delayed by customs. Scanlan assured her he’d intervene. As for the future, Scanlan says he’s like everyone else in Oaxaca—hoping for the best. “Whatever happens,” he said. “I’m here for the long haul.”