TIJUANA, Mexico — In a starkly empty store filled with colorful Indian dresses, sprawling sombreros and quarts of tequila, vendor Humberto Beltran flicked angrily through the sales log.

“Look what we’ve sold this week. Today — nothing; yesterday — $5; the day before — $2,” he moaned, waving his hand across the empty pages. “We can’t live on this. What are we going do?”

Amid a U.S. recession, a fever pitch fear of the Mexican drug war and now an epidemic of swine flu sweeping across Mexico, Beltran says business at his border city store has nosedived 85 percent this April compared to the same time last year. (Read more about the toll the flu is taking in Mexico, and about how the flu shuttered Mexico's cantinas.)

Other shops that line Tijuana’s once thriving Revolution Avenue tell the same story: The American, European and Japanese tourists who once showered them with dollars, euros and yen are all staying firmly north of the fence in California.

This exodus of the gringos comes as Mexico faces its worst drug violence in recent history. The vast smuggling empire of Tijuana — home to the busiest border crossing on the planet — has been one of the flashpoints.

But many of the city’s politicians, tourist officials, and merchants blame the American media for hyping the problem to levels of hysteria and scaring the customers away.

“They are just trying to sell newspapers and they have portrayed an image that is unreal,” said Jahdiel Vargas, director of the Tourism and Convention Committee. “One story even compared Tijuana to Baghdad. That is just way over the top.”

Vargas and others are quick to point out that the bloodshed in Tijuana has actually declined dramatically between the fall and the spring.

In the last quarter of 2008, there were 515 murders in the city of about 1.6 million as two factions in the Tijuana cartel fought a bloody turf war. In the first quarter of this year, there were 108 killings, following a reported truce between the fighting factions.

Such details have escaped much of the U.S. media, which has focused on the general explosion of violence across Mexico over the last 18 months.

The state’s deputy attorney general, Salvador Ortiz, also feels that American media has spun the story out of control.

“Of course journalists must report on the violence but they can be irresponsible,” he said. “We must remember that the killings are not affecting regular tourists at all. If they were we would let them know straight away.”

Ortiz said that two Americans who were recently murdered — a pizza shop owner decapitated in February and a California deliveryman stabbed on the beach in March — may themselves have been mixed up in crime and drugs.

Store owner Beltran even goes as far as to accuse U.S. business interests of actually conspiring to give Tijuana bad press.

“Cities like San Diego are losing business because of the recession, so they try and stop tourists coming into Tijuana to keep them there and make up a few extra dollars,” Ortiz said.

While such accusations strike many in the American media as being absurd, they are not uncommon south of the border amid these difficult times.

However, other Tijuana residents sympathize with both shopkeepers and those who fear traveling to Mexico.

Oscar Rivera, who runs another empty store on Revolution Avenue, said he is scared himself amid all the shoot-outs and murders.

“The newspapers are just reporting what is happening. I can understand why Americans don’t want to come here,” he said. “Our government has got to do more to make our streets safer.”

The army has been conducting anti-drug operations in Tijuana since 2007 and a former military officer recently became the city police chief. In the last month, soldiers and federal agents have also made several high-profile busts of Tijuana cartel lieutenants.

In February, the U.S. State Department reissued a travel alert warning American tourists about the violence in Mexico.

While not going as far as telling them to stay away, the alert advised extreme caution. “It is imperative that travelers understand the risks of travel to Mexico, how best to avoid dangerous situations, and whom to contact if one becomes a crime victim,” it said.

The alert also pinpoints Tijuana and other border cities as being particularly worrisome, emphasizing firefights between security forces and drug cartels with grenades and automatic weapons.

Holidays by foreign visitors to some other parts of Mexico — such as the white sand Caribbean beaches — have been far less affected by the drug war.

But now the swine flu — which had killed an estimated 152 people by Tuesday — has hit the whole country, with the U.S. government advising tourists not to travel to Mexico at all unless it is absolutely necessary.

Tourist officials concede that Tijuana’s image problems go beyond the narco killings.

The city became a hub of alcohol and prostitution during U.S. prohibition, and it has a reputation for vice and seediness that attracts some tourists but scares away others.

In recent years, table dance clubs have crept into main streets alongside family restaurants and shops.

Tourist director Vargas said they want to push the strip clubs back into a limited red light district while also focusing on other attractions such as they city’s IMAX cinema and cultural centers.

“Tijuana is a lot more than trinket shops, table dances and drugs,” Vargas said. “We are promoting a city with a big variety of modern activities for all the family. That is the Tijuana we want to see.”

Read more about Mexico's drug war:

Sizing up Mexico's war on drugs

Meet the drug lords

Clash of the cartels: a guide

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