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Going digital

Ask communal farmers in Chincheros, Perú, about the meaning of the information revolution, and they'll tell you about the price of potatoes.

A few years ago, the typical 50-member farming cooperative in this area near Cuzco took in around $113 per month selling potatoes, chiles and other produce at the Chincheros market.

Then a local parish priest decided that there must be a better market for these goods. Using a computer hooked up to the Internet through the Peruvian Scientific Network (RCP, from its Spanish name), he consulted an international database of agricultural importers. Eventually, he and one of the Chincheros cooperatives made contact with a retailer in New York City with a big appetite for unique species of organically grown potatoes. Today, the co-op sells potatoes directly to the U.S. and earns around $1,300 per month.

For the farmers, access to information about that buyer was just as important as access to water, roads, electricity and credit. In fact, one could argue that in terms of their ability to compete with potato farmers in other countries, the farmers' access to a computer and telephone line was much more important than their access to traditional productive infrastructure.

Stories like this one are raising official awareness of the importance of information infrastructure, and more specifically of the huge investments that Latin American and Caribbean countries need to make if they are to keep pace with nations that are being transformed by the fusion of telecommunications, information and computing.

Concerns about this infrastructure gap led the IDB to launch the Informatics 2000 Initiative, a broad effort aimed at helping the region to plan and coordinate these investments. Introduced at a September conference at the Bank's Washington, D.C., headquarters, the initiative will link governments, companies and civic groups to identify emerging risks and opportunities and recommend proven best practices.

"We're moving from the industrial age to the information age," United States Vice President Albert Gore said at the conference. Reminding participants that three years ago, in Buenos Aires, he had called for the creation of a "Global Information Infrastructure," Gore reemphasized the importance of extending the benefits of the information revolution to the entire western hemisphere.

IDB President Enrique V. Iglesias told conference participants that the Bank has earmarked funds to help finance the development of information infrastructure, "so that it comes within the reach of the poor, rural populations and indigenous groups." (See article "Digital ventures attract funding" in this issue).

Yet for all the interest, this new infrastructure can be difficult to define. Since information is inherently abstract, discussions of information infrastructure tend to rely on physical metaphors: streams of digitized data and images are described as moving through virtual "highways," which represent copper wires, fiber optic networks and satellite links.Likewise, most people think of personal computers (PCS) as the key component of an information infrastructure, even though these machines do little more than store and convert digits into recognizable letters and shapes.

This focus on equipment can lead to the conclusion that the information infrastructure challenge is to simply place telephone lines and pcs in as many homes, schools, businesses and government offices as possible.


Yet as participants at the Informatics 2000 conference were quick to point out, equipment is the easy part. Despite the high cost of information technology and the very limited access that most Latin Americans have to telephones and data networks, this "physical" dimension of the information infrastructure is expanding at a spectacular rate in many of the region's countries (See article "Who is building the data highways?", in this issue).

The real difficulty, according to several speakers, is supplying these new digital highways with information traffic, or content, that will make investments in equipment worthwhile, and making sure citizens are capable of digesting and applying that information.

Though seemingly obvious, the focus on content instead of technology has critical implications for those deciding how to build Latin America's information infrastructure. Consider the Internet. According to some estimates, more than 90 percent of the information available through this network is in English only. Despite all the talk about the productivity-enhancing potential of the Internet, people who explore it soon find that it is largely devoted to entertainment, not work. The experience of the potato farmers in Chincheros is inspiring, but exceptional; most Latin Americans still find very little on the Internet that can improve their lives.

"The content of the Internet is influenced to a very large extent by a few large media and software companies in the U.S.," says José Soriano, general manager of Perú's RCP network. "So it isn't a question of simply extending access to everyone. What's the point of having access if you can only use it to see what's happening outside the country? What we have to do is produce local information for local use."


Focusing on equipment can also foster the illusion that investments in information technology will automatically improve efficiency.

Public bureaucracies around the world offer notorious illustrations of this fallacy. During the last 15 years, governments in both the industrialized countries and Latin America have spent billions of dollars on computer systems intended to speed up document processing and improve service at government agencies. The results, with a few exceptions, have been disappointing. Why? "If information technology is not used as part of a serious reform of the state, it can lead to merely automating obsolete and inefficient practices," Edmundo Jarquín, chief of the IDB's State and Civil Society Division, said at the conference. "You might as well put an outboard motor on one of Columbus' ships."

Moreover, poor planning and coordination in information technology investments can actually increase inefficiency by leading to a proliferation of one-of-a-kind, "stand-alone" systems that make it harder for organizations to exchange information. Masato Yokoda, secretary of health for the city of São Paulo, told conference participants that most of his city's major hospitals already have invested in computer systems that assign "patient identification codes" to each patient for record-keeping purposes. Unfortunately, each hospital uses a different identification system, making it impossible for one institution to share a patient's medical history with another. So São Paulo is now seeking funds to develop a "unified health record," based on internationally accepted standards, that can be used by all the city's hospitals.

Even when they can successfully coordinate information technology investments across multiple organizations, governments must contend with the vexing problem of technical obsolescence. Unlike roads or bridges, which can reasonably be expected to provide decades of useful service, information technology investments require continuous upgrades in order to remain effective. This can turn into a crippling obstacle for large-scale projects carried out over several years. One infamous example occurred in the United States. The U.S. Army Reserves spent more than a decade--and several hundred million dollars--planning, designing, and finally deploying a data network to automate its logistics and supply operations. But by the time the first computers started arriving at military bases, they were so far behind the state of the art that the entire project had to be cancelled and redesigned from scratch.


This example underscores the fact that complex human and institutional problems are almost never solved by hasty investments in information technology. "Taking advantage of information technology requires massive investments in human capital," said the IDB's Jarquín.

But human capital is more than managers and technocrats who make judicious investments in computers and software. Rather, human capital should be defined as citizens who are educated enough to understand the value of information. Such citizens demand an independent and responsible press and insist that public institutions fulfill their responsibility to promptly and accurately disclose activities that affect taxpayers.

Unfortunately, this type of human capital is still in the process of being formed in most Latin American and Caribbean countries. According to Joan Prats Catalá, director of the Governance Project at the Institute of Business Administration and Management in Barcelona, most constitutions in Latin America already defend the citizen's right to information about government budgets and activities. And yet laws do little to ensure that government agencies actually create the means for public access to their records, and citizens have no effective way to enforce their right to information. In fact, many citizens aren't even aware of their right to know.

In short, as Costa Rican President José Figueres said in his inaugural address at the IDB informatics conference, information technology "cannot substitute for a development strategy," based on the fundamentals of better education and truly participatory and transparent government. Only when those elements are in place will the region's nascent information infrastructure, in Figueres' words, "boost and advance sustainable development, allowing countries to leap-frog technologically and open opportunities for all."

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