Latin America Logs On

Off the coast of Venezuela, three 400-ft. ships are laying down miles of high-speed fiber-optic cable capacious enough to carry 600,000 calls simultaneously. In a high mountain town outside Cuzco, Peru, a co-op of native farmers has found a way to get more than 10 times the local price for its potato crop by selling to a New York City organic-food store it found on the Internet. In the streets of Sao Paulo, fashionable women have taken to carrying around white West Highland terriers, the mascot of a free Internet-service provider called iG that, like the pups, has skyrocketed in popularity.

These are just a few of the signs of an Internet culture blossoming in Latin America, unevenly, in patchwork fashion, but in an accelerating rush. In just two years, the region has become the Internet world's next big thing. Though its connectivity rates are still low in comparison with the U.S.'s--only about 2% of Latin America's 500 million people are online, while more than half of Americans are--telecommunications analysts say it is the fastest-growing market in the world. They predict that by 2003 the networked region will reach anywhere from 29.6 million to 43 million regular Internet users and that these users will be spending as much as $8 billion for online purchases. Those numbers have entrepreneurs and investors in such a frenzy rushing to wire the region and reap those rewards that even the recent stock market gyrations in the U.S. caused only a slight pause.

To those familiar with the power of the Internet, the information revolution it brought to the U.S. is a mere ripple next to the tsunami it could cause in Latin America, a region fractured geographically, culturally, economically and socially. Of course, the area still holds serious practical challenges to Internet growth. While 7 of every 10 Americans have a phone line, only 1 in 10 Latin Americans does, and probably waited months or even years to get it. The average monthly income in the region hovers around $350, while computers and Internet service cost the same as or more than in the U.S. Eighty percent of Web content is still in English. And any e-commerce site trying to spread across the region still faces a snarl of cross-border tariffs and delivery problems.

But the challenges pale next to the effect that the Internet rush could have on everyday life in Latin America. For companies, it could slash costs, boost efficiency and broaden markets spectacularly. For governments, it could help burn through centuries' worth of encrusted bureaucracy and cronyism as well as prove a boon to overtaxed education systems. And for ordinary people, it could offer empowerment and social mobility never seen before.