By 1940, the outlying Mexican territory of Baja California Sur faced an uncertain future. The extractive industries of mining and pearling had collapsed in the southern areas of the peninsula, and the remaining economic activities of agriculture and fishing held little prospect for growing the population and fueling development. The solution adopted by local government, boosters, and the federal government was to promote international tourism. The rise of the tourism complex at La Paz represented a local response to the regional problems of economic underdevelopment and isolation, and its decline began with the intense federal involvement in funding the comprehensive tourist center at Los Cabos. From the 1940s through the late 1960s, La Paz tourism represented a sustainable model, rooted in place while maintaining and benefitting from the existing characteristics of Baja California Sur. Experiencing transition in the late 1960s and 1970s, Los Cabos underwent a transformation into a sun-and-sand mega-resort, and La Paz shifted to host a wave of national tourists attracted to the free trade zone. The region entered a phase of frenzied expansion of tourism infrastructure, but the inability to sustain this boom led to a bust in La Paz tourism in the early 1980s, and the regional dominance of Los Cabos. The decline of La Paz tourism during that period deepened as the national government gave priority to the development of Los Cabos, creating a tourist pole built along the same model as Cancún.