The Free Software Challenge in Latin America (5/10/05)

In 2002, then-U.S. ambassador to Peru, John Hilton, delivered a threatening letter to the Peruvian congress using his public office to act on behalf of a very powerful American private interest. The letter, which was leaked to the press, stated that Microsoft Corporation and its chairman Bill Gates disapproved of Peru debating a proposed law, Special Bill 1609, which favored the use of free software in public administration. Hilton warned its passage would harm U.S.-Peru relations.

This incident was an early salvo in a brewing international conflict.
As nations of the world increasingly turn to free software to cut costs and promote local development, some powerful North American commercial interests have responded by bullying. Sometimes they have done so by proxy, such using public servants like Ambassador Hilton. Sometimes they have threatening legal action to intimidate outspoken critics such as Brasil’s National Institute of Information and Technology (ITI) president Sergo Amadeu who compared Microsoft business practices to that of drug dealers. Sometimes, they have threatened governments directly, such as last November, when Microsoft CEO Steve Ballmer threatened to sue Asian governments who choose to use free software.

Part of what distinguishes free software (sometimes called open source or libre software) commercially from proprietary software is a matter of licensing. While all software is protected under copyright, commercial proprietary software is often licensed under terms that create additional restrictions, such as limiting where one can use such software and who may be allowed to use it. Often proprietary commercial software includes licenses to explicitly deny users the right or ability to modify software to fit their needs or access their own data, the right to speak about the functionality of the software they purchased, or to resell it to others when they no longer wish to use it. In contrast, free software expressly asserts and grants these fundamental rights through licensing, and does so in a way that enables others to fully reclaim these rights such as by providing source code.

While both free and proprietary commercial software have co-existed uneasily for a long time in many parts of the world, I believe what has made certain private North American commercial interests respond directly in Latin America is that many nations there have chosen to promote the use of free software specifically in public administration.

There already is a long history for the support and use of such software in Brasil by the Workers party, starting from the days when they controlled the state government of Rio Grande Du Sul and instituted private/public sector partnerships through projects such as procergs.

Most recently the government of President Luiz Lula Da Silva has chosen to use free software solutions built around GNU/Linux exclusively in a project to make computers available to the poor, as recommended by MIT this past March.

Free software in public administration is not just about software for special government programs such as digital inclusion for the poor.
This is a battle about the purchase and use of all software by national governments and the terms such software will be provided under. This about the procurement of servers and database applications used to house government data. This is also about the software that will be purchased and used on the desktops of government office workers every day, and whether they will continue to purchase and use Microsoft Windows and Microsoft Office under the terms of a monopoly supplier, or free software alternatives such as GNU/Linux and OpenOffice.

As Latin American governments increasingly use free software, suppliers will need to adapt to provide it. Private industries which interact with government will also be affected to remain compatible, and provide additional private markets for those vendors. All of these create a national economic environment that certain companies, such as Microsoft, would need to change in order to fully participate in.

One reason that free software is being promoted by Latin American governments is a question of initial cost. In Brasil, they expect to save over $1 billion dollars annually through the use of free software and elimination of license fees. Many other Latin American governments are of course keenly aware of the cost benefits of free software. In some countries, such as in Peru and Argentina, they have tried passing special procurement laws to more rapidly increase the adoption of free software in government. In Venezuela, the use of free software in public administration is now supported directly by President Hugo Chavez.

While it is true that the total cost of using software is not represented in the purchase price or license fees alone, most other factors also tend to favor free software and better explain the potential for large cost savings through its use. One reason is commercial free software will often work on existing and older hardware rather than requiring new hardware to be purchased. Another is that since proprietary commercial software publishers depend on the number of licenses they can sell, it is often desirable to require as many additional software sales to perform a given level of work as possible.
It should therefore come as no surprise that I often find the same workload that can be done, for example, with a typical GNU/Linux system may require three or four times as many proprietary servers, which also represents additional hardware and support costs.

Free software also can result in lower costs through the absence of monopolies. One cannot achieve a monopoly in free software in part because there can always be another free software publisher that can supply the same goods at a lower cost should this occur. This is in fact one of the main reasons for governments to prefer using free software instead of proprietary commercial software: When money is spent on proprietary software, only a small proportion of that money goes towards funding useful services and software development, as a large part of it goes as a monopoly rent to the shareholders of the proprietary software company. On the other hand, in the world of free software, there are no such monopolies, so money that is spent on free software is good for creating jobs and hence offers other direct and local economic benefits. In Latin America money that is spent on proprietary commercial software serves mainly to make already-rich foreign software publishers even richer.

In trying to create a market for or to promote the use of free software, many Latin American countries, such as in Peru, have often chosen to do so through procurement laws, which cover how a government will purchase goods and services. These laws typically state the terms of purchase that a government will use. Often they are designed to prevent bribery, and to make the process of government purchase transparent. This is often done through the use of competitive bidding. Competitive bidding allows products created by different manufacturers and publishers to compete on providing the same service, and by doing so, prevents the government from being forced to rely on a sole source supplier. Propriety commercial software, by its very definition and through the rights it takes away from users, is software which can only come from a single supplier.

In providing opportunities for Latin American citizens to directly participate in the development and worldwide commercial software market locally, free software offers incentives for forming a local software industry that can then compete on an equal basis with that of any other advanced country in the world. What we often forget is that software does not require expensive plants or high capital investment to develop.

Software may only require people who are free to use their skills and natural talents. Certainly, the nations of Latin America can and do produce people with such talents and skills. Free software means these people can practice these skills for their own benefit and the benefit of their society as a whole without having to look for work in or migrate to foreign lands. By choosing to procure free software, the national government can directly encourage this.

If Latin American countries choose to create an economic environment that accepts participation by free software, existing corporations need not be excluded. Companies like Microsoft could choose, for example, to change the way they license their existing products. They are also free to adapt and offer services based on existing free software already in the marketplace. Instead of competing in these new markets, some companies have responded by trying to make it impossible for Latin American governments to choose and use free software at all. These companies not only resort to bullying, but also lobby our government to modify free trade treaties and use international organizations to include conditions that try to make it impossible for Latin American nations to choose alternative products or develop local markets.

I have often seen WIPO used in this way to promote the private commercial interests of wealthy corporations. WIPO is often used to promote treaties and laws which export both the North American corporate notion of pharmaceutical and software idea patenting to developing nations. Private corporations then using these same treaties to then enforce existing North American patent monopolies, thereby preventing the development of competitive local industry. Another example of market control through trade treaties is the "IP rights chapter" of Free Trade Area of The Americas (FTAA) treaty.

One way I have seen Latin American countries respond to WIPO and other patent bearing treaties has been by banding together with other developing nations around the world to help promote a development agenda for WIPO and bring it into harmony with the wishes of the UN general assembly. Yet powerful American and European commercial interests have chosen to use the WIPO chair to explicitly bar NGOs representing the interests of developing nations from attending or participating in WIPO discussions on a development agenda, even those organizations already duly certified and recognized with observer status.

The people of Latin America, of all people, surely must understand well about what corporate bullies are. Last century many nearby Caribbean nations were routinely invaded by marines as part of the banana wars to prop up the interest of specific North American corporations such as United Fruit. While last century’s bullies came with tanks and guns, the bullies of this new century come now with laws and treaties they wish Latin Americans to adopt that undermine the heritage and the most basic rights Latin American citizens enjoy, not for the benefit of Latin America, but once again for the benefit of private North American corporate interests. The right to innovate is not a privilege to be restricted to a tiny minority, is not even a right specific or exclusive to the question of free software alone, but is a basic and fundamental right every human being must be free to enjoy.

Some citations and sources…

Wired Magazine; "Microsoft’s big stick in Peru",1367,54141,00.html

Can I use myself as a primary source? 🙂 Peruvian Congressman’s Open Letter to Microsoft

Lawrence Lessig blog

"Use Linux and you will be sued, Ballmer tells governments"

PROCERGS: todos os estados deveriam ter uma

Brazil: Free Software’s Biggest and Best Friend


MIT official advocates open-source on computers for poor in Brazil


The use of open source represents annual savings of US$ 1.1 billion for
the Brazilian government.

Venezuelas Public Administration to Use Open Source Software

The WIPO Development Agenda and Why You Should Care About It

Experts: Central/South American History