Success Is Spoiling Margarita Island...But Its Neighbor May Be Smarter

When vacation time rolls around, Margarita Island braces for the onslaught of sun-lovers and shoppers who make it Venezuela's favorite holiday destination. Locals stock up on candles. Restaurants and hotels tack up signs urging customers to use water sparingly. Truckers grit their teeth, knowing they'll be waiting days or even weeks for space on the ferries plying the route between the mainland and the island.

Drawing some 900,000 visitors a year, and with a year-round population of 350,000, Margarita has become its own nemesis. Tourism has quadrupled on the 1,071-square-kilometer island in the past 20 years. Because of collapses in the 40-year-old cables and pipelines from the mainland, blackouts and water rationing are common. Even the beaches are becoming polluted with untreated waste from the thickets of high-rise hotels and apartment buildings. "The public services were planned for a relatively sparse population," says Melania Balan, head of Nueva Esparta state tourism agency Corpotur. "They never imagined how tourism would boom."

After decades of willy-nilly growth, officials are trying to impose some order. One goal is to capture a larger chunk of the Caribbean's lucrative foreign tourist trade, which now accounts for 30% of island visitors. A state law passed earlier this year forbids building any more buildings over three stories, recommends that hotels install desalinization plants and alternate energy sources, and mandates that they build their own waste-treatment plants.

Plans to repair deteriorated services also are afoot. The island's electrical system, sold last year to a consortium led by Michigan's CMS Energy Corp. and Virginia's Global Resources, is set to start work on a $600 million project that includes an incinerator to convert garbage and sewage into methane gas to power electricity turbines as well as a desalinization plant.

GOLF COURSES. But utility breakdowns will likely plague the island for some time, because the overhauls are out of sync with building. The Margarita Real Estate Chamber estimates that ground will be broken for $220 million worth of construction this year. That's on top of the $206 million in new apartment buildings, golf courses, hotels, and a casino last year. Six companies have announced plans to start ferry service from mainland cities. And a $100 million cruise port under construction will bring in 12,000 passengers a day when it opens in a few years. "We're working on the problems and think we'll solve them in the medium term," says state Planning Director Regulo Hernandez.

Margarita must get into shape by 2001, when the gala 50th anniversary of the Miss Universe pageant will be held there. State Governor Irene Saez, the 1981 title-holder, lobbied pageant owner Donald Trump hard to bring the event to Venezuela. Projects to beautify highways already are under way, but Saez admits that brilliant-bloomed bougainvilleas won't mean much if the lights and water fizzle. "We have to fix our infrastructure," she says. "Eighty-three countries, 1.6 million people will have their eyes on Margarita."

Bus driver Julio Arismendi is one of the lucky few on Coche Island, a barren squib of sun-beaten land that lies just south of Margarita: He has a job. Crippled by 75% unemployment, Coche is one of Venezuela's most economically depressed regions. "Our problem has always been jobs," laments Arismendi. "People have always lived off fishing or gone to Margarita to look for work."

Soon, more of the island's 8,200 inhabitants will be able to stay in Coche. Venezuelan investors are looking to turn the island into a hub of shrimp cultivation, tourism, and salt production with $15 million in projects that will generate 600 jobs in the next two years. And Governor Saez has other plans in mind. These include selling a concession to operate and expand the tiny airport and finishing an abandoned, half-built "vacation city" project for poor children. Officials are quick to point out, however, that they don't want to overbuild and ruin the 55-sq.-km. island's pristine beaches. "We really want to develop Coche," Saez says. "But we want sustainable development." By learning from Margarita's mistakes, Coche might be able to get just that.