Fifty percent of Latin Americans are under 18, and the total population is greater than that of the United States. Education is increasingly understood as the key to the future. Book fairs, like those in Guadalajara, in Bogotá, in Buenos Aires and in Brazil have made remarkable progress in the last decade, promoting books and reading. Governments are more active in programs promoting literacy.

"The borders are breaking down" says the AAP's international observer, Fred Kobrak. "New structures are developing and the situation is changing now every two years instead of every decade, as it used to. Publishers need to be flexible as global markets develop, for the competition is increasing, too."

There is growing cooperation among the publishers of Spain and of Latin America as they strive to cover the entire Spanish-speaking world more efficiently. There are new ways of retailing books: the international chains like FNAC and Carrefour from France, local supermarket outlets and online retailing have all been getting stronger and are stirring up the conventional ways of doing business.

However, the overall picture for Latin American publishers this year is far from rosy. "It is a year to be careful," cautions Argentine children's publisher Roberto Chwat, v-p of Sigmar. "Consolidate where you can and expand where you can."

In Colombia, political problems have seriously damaged the economy in general and book sales, particularly over the last two years, though they have bred strong interest in political subjects, specifically Colombian.

Brazil, hit with an economic plunge last winter, has suffered a drop in book sales, and publishers are especially hurt by royalty payments due in foreign currency. "The situation is not yet stable," reports literary agent Lucia Riff of Agencia BMSR, adding that the dollar is now 50% more expensive than it was in December. Brazil is the eighth largest book market in the world, and its huge, young population, nearly 100 million strong, makes the potential growth enormous, especially if books can be priced within the means of the general population. Still, Brazilian and Argentine publishers and booksellers are taking a serious look at fixed pricing to combat sales at crippling discounts through superstores.

For the Spanish-language book market in the U.S., Spain and Mexico are by far the most important foreign sources now, with Mexico increasingly so.

In translation rights, the popularity of U.S. books, both into Spanish and Portuguese in Brazil, continues. And local publishing by Latino authors is flourishing as never before, with a few of those titles making an impact in translation into English.

With increasing Spanish-language markets at home, it is important for U.S. publishers to keep abreast of what is happening elsewhere in the Americas, so here are a few of the many angles on the Latin American story.

The Educational Market

Fred Kobrak wisely divides the world of books in Latin America between the "indispensable" and the "discretionary," with the former including all forms of educational books in schools, universities and the professional trades. The biggest English-language publishers in Latin America now are McGraw-Hill and the new Pearson Education Group, including Addison-Wesley, Longman and Prentice Hall. Additional competition comes from English Language Teaching (ELT) Press and Cambridge University Press.

McGraw-Hill opened its first office in Latin America in Mexico 33 years ago, according to managing director Javier Neyra. "Today our growth areas are in educational and professional subjects, in more countries," he says. Covering Mexico, Central America and the Caribbean, Neyra reports to Rafael Sainz, v-p for the Mexico Latino Group, which also includes the Andean Pact countries, primarily Colombia and Venezuela.

McGraw-Hill is number one in college, medical and computer books in the Spanish-language world today. It has all the Microsoft titles in Spanish. From the Mexico headquarters alone will come almost 400 new titles this year, making Mexico the number one producer of books in Spanish for the company.

When the Pearson Group added the Prentice Hall lists to its Longman and Addison-Wesley collections, it became formidable competition to the market leader. Pearson is already number one in English Language Teaching (ELT) and English books in the schools, according to Steve Marban, president of Pearson Educación de Mexico, Centroamerica y el Caribe. There are additional operations in Colombia, Spain and Brazil, which make up the Pearson Educación Latinoamérica (PEL) companies.

Fred Perkins, the new president and CEO of Pearson Education Latin America, stresses that the real problem in Latin America is not other publishers, but the lack of a reading tradition. "Somehow we all need to find ways to work together to turn those soon-to-be 500 million Latin Americans into book buyers. "When and if we do, el sol brillara para todos [the sun will shine for everyone]."

New Markets: Central America and Puerto Rico

Central America is the new market for Latin American and U.S. publishers, especially in educational materials. This is a big change from the bad old days recalled recently by José Manuel Colmenares at Edamex. "It was another world in the 1970s," he says. "No phones, poor roads, military regimes, changing currencies. You really had a job selling books in those countries."

Like many Mexican publishers, Edamex began using the U.S. AID- sponsored textbook distribution service, RTAC, which helped get books into the Central American countries in those difficult years. Had it not been for this program, according to another early export publisher, Esther Gally, co-founder of Editorial Pax, there would have been no books at all in some of these markets, except for pirated copies.

RTAC eventually became RTACII and was privatized in 1994; its former director, Rene S. Greenwald, is now general director of BIS (Books, Information & Services). Greenwald has led the way in Latin America with low prices and high-volume sales into markets ignored by most publishers for years because of the difficulties of collection and the competition from pirates.

BIS offers a unique "buying credit" system to these customers, to keep their fiscal liability at a minimum. As buyers pay for what they have sold, they get more books. And BIS is also on the move, running as well as supplying college bookstores in Puerto Rico and looking beyond.

BIS now operates in 15 Latin American countries, including an office and two bookstores in Puerto Rico. BIS offers high school and university textbooks as well as general and professional titles, from giants like McGraw-Hill Interamericana through to smaller houses like Editorial AGT. A recent expansion into children's books has also been successful.

"Puerto Rico is our number one textbook market after Mexico," says McGraw-Hill's Neyra. "We have one of the largest publishing operations there, with a growing number of Puerto Rican authors. And we are expanding into the Dominican Republic."

And Central America is McGraw-Hill's third largest market. Neyra is trying to support education and combat photocopying and pirates with a new discount pricing strategy for the bestselling college texts. Called Best Sellers Internacionales, the list includes widely recognized textbooks that in some cases reach 30,000-copy print runs. They are printed in Mexico and offered at special low prices.

"It is a gamble," says Neyra. "Can we sell more units in all our Latin American markets to justify the discount?"

Children's book author Ann Cameron provides the consumer's point of view in Central America. Cameron, an American, wrote The Secret Life of Amanda K. Woods (an NBA finalist for Young People's Literature in 1998) She lives and writes in Panajachel, Guatemala, where she has helped make her local library the best in the country, thanks to American donations.

Cameron calls this a "perfect time" for publishers to focus on Central America. "If publishers could stimulate the few Central American libraries -- and their governments -- to respond to people's desire for books and learning, the market here would expand enormously."

Trade Books in Latin America

All of Latin America is still far behind the U.S. in terms of the structure of their book markets. Most of our fellow "Americans" south of the border still cannot afford to buy books. The public libraries are miserably lacking and the bookstores are few and scattered, and mostly for the elite. But among those who do buy in Latin America, books from the rest of the world are vitally important.

Portuguese-speaking Brazil, with a book market as large as all the Spanish-speaking Americas combined, is a major buyer of rights from U.S. publishers. Brazil buys more titles than many European countries each year, though its advances are lower, especially this year.

Manfred Mroczkowski at InterLicense, Ltd. in Sausalito, Calif., says Latin America is a "major force" in world rights markets today. The Hay House title You Can Heal Your Life earned a quarter million dollars a year from Brazil alone in its heyday.

Mroczkowski looks at Latin America as many different markets. Brazil is naturally separated by language. The other should also be treated separately, too, he feels: "Foreign rights are like a salami--the thinner you slice it, the bigger it gets. Because each market is different, I rarely sell all Spanish-language rights to Spain." But many still do, because some major houses have developed strong local distribution throughout the Spanish-speaking world.

Spanish publishers are giving more autonomy to their Latin American branches, sharing lists created in a variety of countries. And independent Latin American publishers are reaching out to Spain and the rest of the Latin markets for cooperative publishing and marketing.

A good example is the major Argentine trade house, Sudamericana, now 60% owned by Plaza y Janes (a Bertelsmann company in Spain).

Editorial director Gloria Rodrigué, whose grandfather founded the company 60 years ago, now manages three major Spanish lists: P&J, Lumen and Debate, as well as her own. Rodrigué benefits from the world rights in Spanish, which P&J holds for many American titles. The volume of production (much of it in Spain now, she says) allows her to keep prices down for new points of sales into supermarkets, gas stations and music stores.

Another Argentine house with a new Spanish link is Editorial Albatros. This one is different, according to Andrea Canevaro, president of the company founded by her father. With its crafts, health and lifestyle titles, it is now linked with Edaf in Spain, which is number one in spiritual and self-help there.

"Most important for us are their gift books in Spanish from Exley in the U.K.," says Canevaro. But they augment the Argentine house as well with New Age, esoteric, self-help and natural health subjects. Roughly 75% of Edaf's lists are translations; the house buys buy all Spanish market rights, so Albatross, in this case, is a beneficial partner for distribution in the Latin American markets.

Consolidation is everywhere. Among the three largest trade book houses in Mexico, Planeta, Diana and Grijalbo-Mondadori, only Diana is 100% Mexican.

With a large portion of the list made up of U.S. translations, and a very strong backlist, part of Diana's strategy is, predictably, cheaper titles. President Jose Luis Ramirez describes a new joint venture with the Spanish publisher L.I.B.S.A. to do both how-to and classics, for children and adults. Diana imprint Edivision offers handsome, hardcover illustrated classics, printed in Spain, that sell for $10. Trade paperbacks are available at $3.

"We need to know the other markets better to take advantage of the Group's power," says general director Gian Carlos Corte. "So we will start with strong international authors and see what works everywhere. New Age and spiritual subjects are really big for us now here in Mexico."

The company offered 120 new titles this year, printing two million books; 60% were backlist, in collections on literature, politics, self-help, health, new-age, inspirational, business and textbooks.

The giant Grupo Editorial Planeta of Spain has one of its five regional offices in Mexico City. The general manager is René Solis, with editorial under the direction of Jesús R. Anaya.

"We have worked hard the last two years to restore the Joaquin Mortiz line, which we bought in 1991 and which features contemporary Mexican literature," he tells PW. That list includes Octavio Paz, Carlos Fuentes, Elena Garro, Paco Ignacio Taibo II, Juan José Arreola and Laura Esquivel.

With all eight company imprints under one roof, there are bestsellers from Planeta elsewhere in the Americas that cross national boundaries regularly. Argentine Ernesto Sabato's memoir, Antes del fin, sold 90,000 copies in Argentina, and 20,000 in 10 days in Mexico last winter. Carmen Posadas of Uruguay has 210,000 copies in print of her Pequenas infamias, for which she won the Planeta prize in 1998.

Planeta also publishes Tom Clancy, Carl Sagan and James Redfield, among many, many bestseller translations. And it buys all rights where possible.

Generally in Latin America, publishers depend on their own distribution systems, especially into the bookstores. This has become a strong reason for cooperation beyond national borders.

The Argentine trade house Javier Vergara Editor was bought two years ago by Spanish publisher Ediciones B, part of Grupo Zeta. The new Ediciones B Argentina sells the lines of both companies. Editorial manager Marisa Tonezzer worked her way up through the trade house Atlántida house for 16 years before taking on the new Vergara imprint. She is buying "a considerable number of new Argentine authors" for the new firm, and plans to continue with as many translations, but in different proportions.

Known for its bestseller translations, Vergara has the likes of Daniel Goldman, Lester Thurow and Morris West. Goldman was among the many international authors, including Patricia Cornwell, who visited this year's Buenos Aires International Book Fair and signed books for their fans.

One reason for all the consolidation in the Spanish-language world is the need to get the best books. Every publisher must be able to offer world rights, and do a good job distributing the title Spanish-world-wide.

The Spanish are also thinking this way. Editorial Océano de Mexico is actually the biggest part of the Spanish-based house. With 80% of its sales in Latin America, Mexico is its largest market, according to general manager Rogelio Villarreal. And it is Océano's only editorial operation outside of Spain.

Four years ago, Océano started a trade list in Mexico with novels and p try, which augments the Circe list from Océano Spain, and the Tusquets and Atlantida collections, which Océano distributes exclusively in Mexico.

"Between our distribution arrangements and our own titles, we have a catalogue of over 2000 titles and a big warehouse here in Mexico," says Villarreal. (Océano's first success was in door-to-door and that is still 75% of the business in Mexico, though the lists for that market differ from those for retail sales.)

Exporting to the U.S.

Everyone in the Spanish-language world is encouraged by the potential in the U.S. market, which is another reason to hold world Spanish rights, if possible. Our closest Spanish-speaking neighbor is also our second biggest source for Spanish-language books in the U.S.

Spain is still first, sending us nearly $38 million worth of books last year, against Mexico's $17 million. But Mexico's exports are increasing fast, especially over the last six years. (A big but undifferentiated chunk of both these figures is books in English printed in these countries for U.S. publishers to sell at home.)

The publishers of Mexico confirm that the U.S. is their most important export market now, a recent phenomenon. Puerto Rico is where most have begun, but Mexico's Selector is considering a sales office of its own in Los Angeles.

Diana president Jose Luis Ramirez is eager to expand his exports from the current 15% of sales. His biggest target? The U.S. "North American publishers are doing Spanish-language titles now and that is helping to open up the market," he tells PW.

Grupo Panorama is another Mexican publisher with much of its business (25%) outside of Mexico, and hopes to expand to the U.S. It specializes in personal and spiritual development, and business management subjects. Of 700 titles, 80% are translations from the U.S., U.K., France and Canada.

Children's Books

The Mexican government provides 150 million books to primary and secondary school students each year, with a crippling effect on local independent textbook publishing. Last year, with industry pressure, it bought 14 million of them from the private sector, instead of publishing them directly. This year, they bought 20 million.

"This is a good beginning for an important market we haven't reached in a long time," says Carlos Noriega, chairman and CEO of Grupo Noriego Editores. Noriega is president of the Education Committee for the Industrial Sector Confederation and leads the effort to privatize the textbook market.

Rodrigo Garcia Lopez at the Spanish house Ediciones SM has been producing textbooks in Mexico for the last four years. The children's series El Barco de Vapor (Steamship) has sold 38 million copies in Mexico alone. Garcia Lopez, a Spaniard, finds Mexico both frustrating and exciting.

"We don't have children in Spain," he says. "Here, we have plenty of children, but they can't afford to buy books and the government d sn't support the industry."

While this is changing slowly, Mexico's publishers have a good market in the large private-school sector. And the California school market, which they thought would be lost last year when bilingual education programs were voted out, continues strong, according to Noriega.

In addition, this year Brazil began teaching Spanish as a second language in its school system. "We see big opportunities there," says Noriega. Brazil itself is has a huge children's market. Trade publishers like Companhia das Letras have launched children's lines in recent years with great success.

Jesus Anaya is excited about the new Planeta Infantil line, which is a group-wide licensing effort and will bring Planeta into the children's book market. It already has Babe, Star Wars, Muffy and other licenses locked in. And a new book for children from Laura Esquivel, one of its top Mexican authors, will be on the Planeta Infantil list this fall.

Selector is using the new Scholastic system to get its books into the schools market. The house signed a new agreement with Disney at the last Guadalajara Book Fair to launch a dozen activity books (Pasatiempos) for children in August entitled Que la fuerza te accompane (May the Force Be with You), just as the new Star Wars movie is released into the market.

And Selector introduced a new line of thrillers for kids last year, complete with stickers. These did so well that they are continuing with science fiction and fantasy for 12-14-year-olds. Pequeñios Valientes will also have stickers on the cover flaps.

Disney has been in publishing south of the border since the late 1930s and has been covered extensively in earlier PW reports on this region. It is also part of the trend toward more localized product. In general, children are getting better attention these days in Latin America. Book fairs devoted exclusively to children, like the one in Buenos Aires in August, are more frequent.

In Argentina, the progressive book retail chain Librerias Yenny started in-store readings for children last year.

"We had never had that before here in Argentina," says Karina Skidelsky, daughter of the founders, in charge of all literature for young people in all 21 stores. "We had activities for 8500 children last year, and it has been great. Yet too many people still don't understand the value of reading to children, how important it is to promote reading for the future."

Scholastic, already with a company in Mexico, is setting up shortly in Argentina.

The STM Markets

Scientific, technical and medical books in Latin America are getting an extra boost this year in Mexico with a new co-publishing agreement between Wiley & Sons and Noriega. According to CEO Carlos Noriega, when Wiley left Mexico in 1986, his company bought out its Limusa/Wiley list. Now the two will work together again with the imprint Limusa/Wiley. Thirty titles are planned, all STM.

Noriega will also be translating some of the Simon & Schuster titles, which Wiley bought when the Pearson Group was forced to sell them. And the Jossey-Bass list has recently been added to the Wiley umbrella, which interests Noriega as well.

Another well-known Mexican STM publisher, Manual Moderno, is now exporting 35% of its total business, mostly to the rest of Latin America. And according to the president, Hugo Setzer, the company's quality, low-cost translations and popular national authors have brought strong sales in 10 markets. Setzer is expanding editorial production to Colombia this year.

In Argentina, Editorial Medica Panamericana is also finding strength in its Latin American web of markets, and concentrating more on Spanish-language originals, especially for distance-learning projects for medical professionals.

"We need a lot more educational materials in Mexico," concludes Carlos Noriega. "With a new free trade agreement coming with Europe, even more we are going to need a more educated population to compete. And we have to have a very competitive pricing policy here to compete in the market and combat piracy."