Business as Usual.

Y2K may be the end of the world as we know it, but Latin America has seen it all before.

RESIDENTS OF SANTIAGO HAVE NO water. Huge swaths of Buenos Aires go dark as electrical distribution fails. In Sao Paulo and Quito, customers form desperate lines outside locked banks; riots ensue. Lima housewives sweat through power outages daily, find their currency worthless and food scarce. Mexican families are cast into limbo as the financial system goes bust, while Panamanians can no longer import goods and the U.S. dollar supply disappears.

Is this the dark dawn of the new millennium, the prophesied havoc of the Year 2000 bug? Are computer systems that control basic services around the world locking up because software designed for the 20th century fails to note that the date 01/01/00 means the year 2000 and not 1900?

Nothing so dramatic. This is everyday news out of Latin America during the last decade, much of it occurring just this year.

What Y2K will bring, nobody knows. Many doomsday scenarios are floating about-massive power outages, government defaults, canceled flights, bank closings-and most of those scenarios are commonplace in Latin America's own brand of economic chaos.

Thus, as the fateful date speeds toward us, the region is oddly prepared to handle whatever crises may arise. Not because computer systems have been vetted and fixed-in most countries, they have not-but because Latin Americans have survived so many system breakdowns. In fact, they know all too well what can happen. "If we say [Venezuelans] need to stockpile some food, or they need some cash, we are sure many banks will have runs, or food will disappear from the shelves:' says Hugo Castellanos, Venezuela's government Y2K coordinator. To broach the subject without provoking panic, he says, "we are talking to psychologists and psychiatrists to know how to reach the people."

No need to rush into anything. In Mexico, the Comision Federal de Electricidad (CFE), the state-run power company, has generated its very own time warp. The CFE tested a plan to reset its mainframe's clock to December 1993. "It worked:' says Carlos Jarque, Mexico's Year 2000 guru. "This will give us another seven years.

A Mexican time warp. The Mexican government estimates that only one in 20 Mexicans even knows that there might be a problem, let alone what it is. That compares with 85% of their neighbors to the north. Executives have also been slow on the uptake, and slower yet to commit resources to fix the computer glitch. "Wake up. There isn't any more time:' says Fernando Parra, head of the Bolivian anti-bug taskforce.

No Latin American country ranks in the Gartner Group's top tier of nations that will experience only a minimum of failures. Only Brazil, Chile, Mexico and Peru rank in the second category, in which Gartner believes that one in three organizations will be forced to shut down due to computer problems come the New Year. More than half the systems in other countries in the region are expected to crash.

Against this backdrop, corporate spokespeople charged with fielding Y2K requests from media, suppliers and clients are oddly upbeat [see sidebar]. This may be a result of diminishing expectations of what can be done: "Three years ago, companies were defining 75% of their applications as 'mission critical:" says Ann Livermore, enterprise computing VP at Hewlett-Packard. 'A year ago, they were still saying half were mission critical.' Now they are saying that only 20% are 'mission critical."' Another current of thought pooh-poohs the effect on Latin America because businesses, schools and governments lack widespread computerization.

Bad vibes. Mexico found this to be true: The country's information technology systems were highly concentrated in 16 banks, two airlines, two telephone companies, one satellite firm and three national utilities--electricity, water, oil and gas. Also, 40% of the computer technology was purchased after 1997, which may limit vulnerability

Granted, large banks and multinationals across the region are well on the way to finishing their preparations, in contrast to most governments. The enormous cost of upgrading computers, $35 billion in Brazil, $19 billion in Mexico, is more than many governments and smaller businesses are willing or able to spend. But failures in these sectors, for example the inability to issue pension checks, will certainly reverberate throughout the economy affecting the bottom line of even the most prepared corporate IT manager.

Peru's Project Year 2000 orientation center has had 80 people working for nearly a year. Staffers have answered several thousand inquiries, brought out 17 publications on the subject and made 250 on-site presentations on key areas of water, electricity, health, banking and telecommunications. Their efforts are largely credited for putting Peru ahead of neighboring countries in the millennium-fix arena. Says a spokesman, "We are fairly confident that the date changeover will be smooth."

Banco de Credito, Peru's largest bank, is also confident. It has spent $20 million since May 1997 to revise between six and seven million lines of code in programs and applications. On two consecutive Saturdays, 1,200 employees were pressed into service to act as customers to test the system. The bank also invited two dozen major corporate clients to participate.

While large companies seem well prepared, "Many small and medium-sized Peruvian companies don't have the funds to confront the problem, or else they do not take it seriously:' says Jose Luis Fernandini, general manager of software vendor SAP Andean and Caribbean region.

That worry is common from the southern tip of the Andes all the way to Tijuana. Mexico's Jarque worries that local governments are wasting time. But he shrugs it off. At least in Latin America the weather is mild in January he says. Best time of the year for a crisis.

NIGHTMARE SCENARIOS

The Y2K bug has generated so much media coverage that many corporations have designated spokespersons to handle inquiries on the topic. Here's the view from Latin America's regional corporate offices.

DAVE JOHNSON, AT&T, believes that the Year 2000 will arrive without Chicken Little.

"I don't think the sky will fall. You read articles where people say it will be the end of life as we know it. I don't think so. Should you do a little contingency planning? Yes. Whether you are a business person or a consumer, having a little extra food and drinking water and flashlight and batteries is smart thinking."

SYLVIA URBINA, AMERICAN AIRLINES, believes in old-fashioned teamwork.

I don't know what people are worried about. We have a good relationship with other airlines and airport authorities to be sure that, as in industry, we will be up and running; Y2K is not going to be a problem."

ERNESTO MORALES, COMPAQ COMPUTER CORP., will hunker down in compaq's headquarters.

"There are so many pessimists. Even in the U.S., people are buying land in Montana and getting food to last several months. I think problems will occur, but they will not be of the magnitude that requires people to do all that. lam an optimist. I think we will have but minor glitches that we can very quickly turn around."

Who's a Liar?

Wags say the only companies that are truthful about Y2K are the ones who admit to being unsure whether they are ready. If that's the case, some big fibbers took LATIN TRADE'S online poll for a ride.

Is your company prepared for Y2K?

Yes, Definitely: 40%
Not Yet:         31%
Not Sure:        25%
What is Y2K?:     4%