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The Economics of Privacy

In Latin America, privacy takes a backseat to economic growth and personal advancement.
By Jennifer Torres-Wernicke
Jun 01, 2005—Personal privacy as it relates to technology is not an issue in Central America. Privacy issues seem trivial compared with the extreme poverty faced by many people in this part of the world. According to SIGET (a regulatory agency that oversees the electricity and telecommunications sectors in El Salvador), no Central American organizations or groups focus on technology’s impact on individual privacy. I have found that the great majority of Central American citizens, even the highly educated ones, have very low concern about data privacy. Identity theft is virtually unheard of, and people give away sensitive information easily.

But slowly, the public seems to take information-security issues more seriously. This increased awareness has been fueled by the regulation of some industries, including the financial sector. As part of the security discussion, privacy concerns are beginning to have an audience.



Large Central American companies routinely sell their customer information, and nobody seems to complain. Considering that more than half of the region’s population lives at extremely low income levels and the other half struggles to have a merely decent living, it’s easy to understand why someone might give away private information eagerly in exchange for small benefits.

RFID is being introduced at important conferences about supply chain logistics. Local industry players are just learning about RFID technology, and some larger companies are beginning to experiment with it. Several manufacturing plants produce products sold at Wal-Mart, and the retailer’s requirement for suppliers to tag merchandise has been one of the drivers for the adoption of RFID technology.

The regional bodies in charge of RFID implementation comprise each country’s GS1 organization. According to DIESCO (El Salvador’s GS1 member organization), RFID is being used in El Salvador for inventory management by the International Airport and by two of the nation’s major retail companies. Similar implementations are being experimented with in other Central American countries.

Old Assumptions in a New World
Central American nations are in the early stages of building information systems, and most people are in favor of a unique, government-provided ID number that can identify one individual anywhere. The advantages created through that kind of information link are so impressive and economically attractive that discussing the dangers is frowned upon. Additionally, the cultural assumption is that a person who does not want to share his or her “public” information must be hiding something evil.

In the work environment, an employee would never question an employer’s request for personal information. Nor would tracking systems be questioned. The relationship between employee and employer in these countries is such that it generally leaves no room to question the employer’s guidelines.

In 1965, the Organization of American States (OAS) called for protecting privacy as a human right in the “American Declaration of the Rights and Duties of Man.” One would expect to see legislation covering privacy issues in all American countries by now, but the reality varies greatly.
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