Used to Chaos, Latin America Not Afraid of Y2K Bug

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Used to Chaos, Latin America Not Afraid of Y2K Bug

Updated 3:27 PM ET November 19, 1999

By Mary Milliken

SAO PAULO (Reuters) - For Latin Americans, who are accustomed to upheaval and shortages, the Year 2000 computer problem, which could crash systems at the dawn of next year, will likely be just another blip in their day-to-day lives.

The region, with 9 percent of the world's population, has gone a long way in the last 10 or 15 years to replace dictators with democratic governments that tamed unruly economies and got private enterprise to modernize infrastructure.

But havoc -- like the kind the millennium bug may wreak on computers and services that rely on them on Jan. 1 -- is still a part of everyday life for many Latin Americans, even in the most developed parts of the region.

Take a typical rainy Friday afternoon in Sao Paulo, Brazil's largest and most industrialized city with 16 million people: Trash-filled streets flood, rivers swell over into major thoroughfares, workers get stuck in traffic for hours, lights go out and telephone calls do not go through.

"Every time it rains in Sao Paulo, it is a lesson in flexibility," said Marcelo Pires, creative director for trendy advertising agency W/Brasil. "I suppose that for people in the United States, not having use of the phone would mean chaos. In Brazil your phone goes down all the time and your cell phone doesn't work. We just leave the house and go have a beer."

NO Y2K OBSESSION

That kind of roll-with-the punches attitude has kept Latin Americans from worrying very much about what the Year 2000, or Y2K, computer glitch means for them. Unlike their neighbors to the north, they have seen no call for stockpiling or survival kits and no big public information campaigns.

"I'm expecting a calm reaction. We are not as obsessed with it here as they are in other countries," said Manuel Sacerdote, head of BankBoston Argentina, a unit of Fleet Boston Corp.

Argentines, having survived 5,000 percent hyperinflation and overnight conversion of savings into government bonds, doubt that Y2K could be any worse for their pocketbooks.

In theory, any computer system that has not been updated to read the two zeros in the date as 2000 and not 1900 will fail and destroy data. But countries and large firms have invested billions of dollars for upgrades and testing to avert the catastrophic scenarios painted in the last few years.

The risk of Y2K-related failures in Latin America are not too much higher than in more developed regions of the world.

The two largest economies, Brazil and Mexico, along with Chile and Peru are in the same Group 2 level of preparedness as France, Germany and Japan, according to technology consultant GartnerGroup. Argentina, Colombia and Venezuela are in Group 3 while laggards Ecuador, El Salvador and Uruguay are in the lowest, Group 4, along with most African nations.

Authorities in the region's biggest metropolis, Mexico City, say they are prepared for Y2K because normal occurrences like floods, street protests and subway suicides have made them masters of contingency planning.

LATINS CAN BET ON THEIR BANKS

The banking systems of Brazil, Chile, Colombia and Mexico "appear to be as far ahead as the more developed markets" in Y2K preparation, Moody's Investors Service says. Argentina, Peru and Venezuela are somewhat behind.

Most Central Banks have also beefed up liquidity in case there are large cash withdrawals.

Despite their good work, Latin American banks have been slow in getting the word out to clients that their deposits are safe -- the biggest Y2K concern for consumers in the region.

Brazil's Central Bank ordered banks to inform customers of their preparedness only in mid-November. Argentine banks face what BankBoston's Sacerdote called a "dilemma" over whether to bombard clients with Y2K information or keep a low profile. At stake is Argentines' hard-won confidence in their banks.

Chilean Erik Andrade, a credit card executive with Banco Credito Inversiones in Santiago, believes governments and companies have not told the public enough because they are afraid of causing panic. "We are too relaxed and confident that nothing will happen."

By side-stepping the issue, W/Brasil's Pires warned, companies may be met with an onslaught of last-minute concern. "If you wait until December, you will be feeding panic."

Pires said Latin American airlines have been surprisingly silent about their readiness amid fears that flight computer and radar systems might be bitten by the bug. Indeed, after banking and blackout concerns, fear of flying seems to be right up there in Latin Americans' minds.

"Why would I want to kill myself?" asked Juan Gilberto, a shoe repairman in Santiago who says he would not fly over the New Year. In Venezuela, a presidential commission on the Y2K bug is focusing its attention on the health system, which it considers the most crucial of the least-prepared sectors.

"Not many health systems are going to fail," commission executive president Giuseppe del Grosso said. But he said the government was distributing stickers to hospitals to place on equipment expected to stop working at midnight on Dec. 31. ((FLT.N))

======================================= End

Ray

-- Ray (ray@totacc.com), November 19, 1999

Answers

O look, a real post in the midst of all of this...sort of like a shit sandwich :-)

-- Roland (nottelling@nowhere.com), November 19, 1999.

Coming from a chaotic background has its advantages...but it also tends to make one desire preparations...

-- Mad Monk (madmonk@hawaiian.net), November 19, 1999.

This article is right on. I have relatives in the Dominican Republic. And although we have a New York university trained Americanized president, there are still numerous infrastructure and telecommunications problems there.

When I was there a few years ago, the power routinely went out for 3 or 4 hours a day. People just deal with it as much as they can. My relatives all had kerosene lamps as a matter of course.

Pay phones there have satellite dishes on top rather than connecting with land lines.

People mostly deal with it. A '10' on the Y2K scale here would be a 2 or 3 there, really, because they are not as usual to JIT deliveries to MegaSuperDuper Food Marts and the like. And they are used to preparing for hurricanes.

The one area that would be devastating would be problems with water. If people in the big cities there don't have access to a well (and many in the cities don't.....those in the country do) there will be massive problems. We saw that when massive rains made the water undrinkable in places because of major flooding.

-- Lara (nprbuff@hotmail.com), November 19, 1999.


So Y2k won't have much of an impact because they're already impacted, huh? If say there unemployment is 10% and factories go down because supplies are interrupted or any of the other 1000's of sundry type of things that have been posted in this forum and there unemployment reaches 15%, will that qualify as an impact?

-- Guy Daley (guydaley@bwn.net), November 19, 1999.

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