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SCOTT JAGOW: One of the most popular tourist destinations in Mexico is called Oaxaca. It's on the Pacific Coast in Southern Mexico. Oaxaca has beautiful beaches and caves and mountains. But lately, the city has been paralyzed by protests. What started as a call by teachers for better pay has exploded into a free-for-all of antigovernment and anticapitalist causes. It's not been good for tourism. From the Americas Desk at WLRN, Marketplace's Dan Grech reports.

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DAN GRECH: Protestors in Oaxaca have torched buses, blockaded highways, even trapped tourists inside their hotels. This week local businesses started their own protest. They hung white flags over the locked doors of their supermarkets, banks and restaurants.

Chuck Collins is with the Institute for Policy Studies:

CHUCK COLLINS: "I actually, quite honestly, don't understand it as a tactic. I mean, a lot of these businesses have been involuntarily shut down by protestors and blockades and their customers aren't able to get to them. But I think it's a way of putting pressure on the federal and state officials to intervene in the conflict."

Strikers who started out asking for modest raises are now calling for the governor to step down. They've commandeered 50 square blocks downtown. And they forced the cancellation of the Guelaguetza, the city's signature tourist draw for seven decades. That alone cost businesses tens of millions of dollars.

Armand Peschard is with the Center for Strategic and International Studies:

ARMAND PESCHARD: "Businesses are starting to feel the pinch, and are trying to push back, demanding that the conflict be resolved."

Peschard says that this is part of the growing pains of Mexico's young democracy. The federal government is reluctant to restrict people's newly unleashed freedom of expression.

And besides, President Vicente Fox has his hands full. A leftist opposition is demanding a recount of the July presidential election. And they've taken over Mexico City's main boulevard and financial hub.

I'm Dan Grech for Marketplace.


Below the Cero de Fortín, people walk past the torched remains of a police vehicle and another public bus.