My previous post was regarding the first part of this article with respect to air traffic control. But after I read the article it was clear this needed to be brought to everyone's immediate attention.

Apparently everyone has been so concerned about Japan that we forgot about Latin America, and they are in deep s**t!! Mike brought up the topic of mutual funds, and I remembered that a large part of U.S. trade and financial markets are connected to Latin American countries.

With American government and corporations preparing to make some serious decisions based on their progress by July, this whole crisis could start escalating well before this year is even ended! Perhaps we were wrong about bank runs starting in Japan.

Stock up on coffee and marijuana, because they will be very scarce soon from the looks of things. And if we run out of coffee in the U.S., that alone is enough to cause everything to fall apart!

I bolded some of the "hotspots."

Latin America scrambles to avoid Y2K failures

April 17, 1999 Web posted at: 8:30 p.m. EDT (0030 GMT)

BOGOTA, Colombia (AP) -- Uncertain their radars' Year 2000 computer problems will be solved, air traffic controllers in this Andean nation are taking refresher courses in guiding planes the old-fashioned way -- with radioed position reports and paper charts.

Federal bookkeepers, meanwhile, may have to switch to paper ledgers until their computers are fixed.

With a handful of exceptions led by Mexico and Chile, Latin American governments were late in grasping the severity of the "millennium bug." They now realize they lack the time, money and programmers to forestall potentially crippling public sector failures when2000 arrives.

In the United States, where tens of billions of dollars have been spent on ridding computers and other electronic equipment of the date-sensitive glitch, failures are expected to cause disruptions akin to a bad snowstorm.

"For us it could be like a volcanic eruption," said Hernando Carvalho, a Colombian civil engineer and lawmaker who began surveying government readiness in December and found it woefully lacking.

Among Latin politicians, Carvalho is a lonely voice trying to raise consciousness where little exists.

World Bank experts and independent analysts say Latin and Caribbean governments can now do little more than focus on preventing disasters brought on by the Y2K problem, a legacy of the days when software writers saved space by expressing years with two digits. That means an unfixed computer won't be able to tell 2000 from 1900 and might shut down in confusion.

Like most governments in the developing world, they're feverishly working on plans for skirting unreliable computer systems to ensure the delivery of essential services like water, electricity and public payrolls.

"Basically everybody's in the same boat. They're only focusing on critical systems and contingency plans," said Rafael Hernandez, an information specialist with the World Bank.

Nearly all Latin governments rely heavily on informatics. And at precisely the moment last year that they should have been investing heavily in Y2K fixes, the Asian financial crisis hit their economies hard.

Now there is an almost universal shortness of cash.

Media coverage of the Y2K bug has been scarce in the region, and many presidents, including Colombia's Andres Pastrana and Argentina's Carlos Menem, haven't even mentioned it publicly.

"I don't want to be an alarmist, but we do want to prepare the people for reasonable precautions. There could be a run on banks, real bad, and declared bank holidays," said Jim Cassell, research director for the information technology analysts GartnerGroup who has worked extensively in the region.

Gartner analysts predict half of all Latin American companies and state agencies will see at least one critical failure -- from power outages to air transport interruptions -- in Argentina, Colombia, the Dominican Republic, Guatemala, Jamaica, Panama, Puerto Rico and Venezuela. Even worse off are Costa Rica, Ecuador, El Salvador and Uruguay, they say.

Social unrest and paralyzed commerce are tangible fears.

In this part of the world, "the public doesn't protest with phone calls and letters -- it riots and destabilizes the government. There's lots of potential for that," said Ian Hugo, deputy director of Britain's industry-backed Taskforce2000.

Argentina received a $30 million World Bank loan earlier this year to deal with Y2K problems, and the Inter-American Development Bank expects to open a $2 billion line of credit by May for confronting the bug.

Yet many of the countries scrambling to draft loan requests still "haven't identified the trouble areas (and) don't know how much money they need," said Jamie Dos Santos, vice president for Latin America at Bellcore, a leading international Y2K contractor.

On the whole, Latin American Y2K officials are divulging few details of their countries' progress. They know international investor confidence is at stake. Brazil, for one, is still trying to meet the conditions for a $41.5 billion bailout package from the International Monetary Fund.

"Lack of confidence in a country's infrastructure could cause multinational companies to close their operations," a U.S. Senate report warned in early March.

Among nations where officials have been more open is Colombia, where the government's Year 2000 Office, created in September 1997, only just kicked into gear in December.

Managers of the state-run health care system are struggling to determine how to keep Y2K failures from scrambling the records of its more than 8 million patients. And public hospitals are just beginning to inventory medical devices for bug-related defects.

Colombian civil aviation officials say their radar systems will fail without repairs worth more than $11 million, money the federal government says it cannot provide. Without radar, controllers will rely on voice communications and keep planes spaced more widely apart, delaying flights.

Carvalho said foreign carriers will refuse to fly to Colombia unless the radars and other aviation systems are fixed by July 1, the cutoff date after which U.S. officials expect to begin releasing warnings about countries with worrisome Y2K status.

American Airlines, the dominant U.S. carrier in the region, called Carvalho's claim speculative. "We'll make those decisions when the time comes and obviously safety is our major concern," said Martha Pantin, a spokeswoman for the airline.

In Venezuela, civil unrest could well be on the menu.

"We're going to have a food-supply shortage," predicts Alejandro Bermudez, the government's information systems manager.

He estimates 40 percent of Venezuela's food-processing plants will be paralyzed when unfixed computer chips in automated factories shut down production lines.

Another anticipated failure: 2,500 elevators in Caracas, the capital, will automatically halt. "We know it's going to happen," Bermudez insists.

Only about 10 percent of Venezuela's electricity distribution system has so far undergone computer fixes, and the government says the country desperately needs $1.5 billion for Y2K fixes, adding that even with that money, repairs will take two to four years.

Multinational corporations and major banks have invested heavily in fixes throughout the region and all but a few are expected to be ready before the new year. But many are worried about their suppliers -- and about power generation and water supplies.

Cassell said some companies in Venezuela, Brazil and Argentina are building water reservoirs and holding tanks with diesel-powered generators to weather any lengthy water outages.

Businesses also are taking precautions in Central America.

Scott Robberson, executive director of the American Chamber of Commerce in Guatemala, is buying a gas-powered refrigerator and stocking up on extra food, water and propane. He said his electric company hasn't even started Y2K work, only two of Guatemala's 30 banks are ready, and few buildings in Guatemala City are fixing elevators and time-sensitive computerized building security locks that are vulnerable to failure.

Not every Latin government may need to practice triage.

Mexico and Chile actually budgeted explicitly for Y2K last year. And Mexico has stricter reporting requirements for financial institutions than the United States, said Carlos Guedes of Brazil, deputy controller and chief information office for the Inter-American Development Bank.

The Brazilian government's Y2K coordinator, Marcos Osorio, said his country's energy and telecommunications sectors are running behind in repairs. He predicts only "isolated problems" but adds that Brazil's electrical utilities are already "taxed to the limit" and highly susceptible to brownouts.

"Essential government services should be operating well enough not to cause any damage to the population," he said, without offering specifics.

Guedes said, however, that Brazil's chief public data-processing agency, SERPRO, had worked diligently on Y2K but was still short $35 million to finish fixes. SERPRO handles 60 percent of the Brazilian government's data processing -- everything from tax collection to national finances to the federal payroll.

Independent software consultant Carlos Vargas of the Softtek company in Sao Paolo doesn't doubt that government programmers are hard at work. But he is skeptical of rosy forecasts.

"Nobody knows if the government or companies are being honest," he said

-- @ (@@@.@), April 17, 1999

Answers

@,

We do a lot of trade business with these countries, and much of it goes through the Panama canal. I doubt that our economy will be able to take an additional reduction in trade on top of the current situation with Asian markets. It is likely to start crashing later this year if Brazil gets in trouble.

-- anon (1@2.3), April 18, 1999.

Hasn't the Panama Canal more or less been purloined by the Chinese?

Dodgy.

-- Andy (2000EOD@prodigy.net), April 18, 1999.

I believe Secretary Glickman pegged US imports of fresh fuits and veggies at 40%. A lot of these come from South America. Some of our beef sold as "US beef" originates in South America and is brought here to be butchered. I think a good percentage of our oil comes from Venezuela as well. Doesn't some also come from Mexico - or is that natural gas?

The absence of coffee will be a major headache - lol. (Ever visit somewhere that served only decaff and get that withdrawal headache?)

-- marsh (armstrng@sisqtel.net), April 18, 1999.

I'm going to the store to buy as much coffee as I can afford. Wow, imagine what the demand and prices will be like later this year. Someone could get rich quick if they filled a warehouse full right now!

-- @ (@@@.@), April 18, 1999.

There were a couple of threads some weeks ago, one was about the debt crisis in Latin America and the other US imports from various countries. I knew we imported a ton of stuff from overseas but the variety and volume were staggering. Re South America, out of season fruits are the best known (grapes, raspberries, blackberries, etc.), bananas, and (crucial!) coffee, but there are also engine parts, tyres, steel, beef (think fast-food restaurants and corned beef), clothing, shoes, chemicals, pharmaceutical ingredients (especially from the rain forest areas)--it's a mind-boggling list.

Among our first purchases were a coffee stash and a manual coffee grinder, plus a little Sterno stove to make morning coffee. Don't let me hear caffeine warnings, please, it's one of only two vices I'm allowed to enjoy.

-- Old Git (anon@spamproblems.com), April 18, 1999.

Speaking of the Panama Canal, the US is giving it up to Panama on Dec 31, 1999. It was further stated that ships using it after 12-31-99 may have to 'prove their y2k compliance' prior to entering it. I read this in a post at y2knewswire.com If you want the link, I suppose I could find it. The older stories are archived now.

-- J (jart5@bellsouth.net), April 18, 1999.

Maybe that's what I heard, the Chinese had "bought" the Panamanians...

-- Andy (2000EOD@prodigy.net), April 18, 1999.

@, Thanks for this post. I'm passing it along to a friend who is about to make a very serious career decision, the success or failure of which will depend on these fragile economies. Any info. in Latin America is appreciated.

-- Puddintame (achillesg@hotmail.com), April 18, 1999.

Very sobering article, @. Thanks for posting it. Pop goes the Happy Face balloon.

-- Leska (allaha@earthlink.net), April 18, 1999.

The Brazilian real crashed early January. Brazil was supposed to be the most important economy in Latin America, and any problems in Brazil were supposed to be felt throughout the region. The stock market hiccuped for 2 days, then forgot all about it.

-- Brooks (brooksbie@hotmail.com), April 18, 1999.

Speaking of coffee...what's the shelf life? I called Folgers and they were not much help. I can live without it but I can't live with my wife if she dousn'r have it.

-- (rcarver@inacom.com), April 18, 1999.