Date: Fri, 29 Jan 1999 14:41:39 -0600 (CST)
From: Bob Olsen <firstname.lastname@example.org> (by way of Michael Eisenscher <email@example.com>)
Subject: World Bank Y2K Survey
To: INTERNET-BOBOLSEN * <firstname.lastname@example.org>
Subject: The Year 2000 Bug Is a Menace, No Doubt
Date: Thu, 28 Jan 1999 10:27:41 -0600
The Year 2000 Bug Is a Menace, No Doubt About It
By James P. Bond,
coordinator of year 2000 operational initiatives at the World Bank
In the International Herald Tribune,
27 January 1999
It is a startling fact that by next Jan. 1 most developing countries will
not have fixed their year 2000 computer problems. These threaten them,
along with neighbors and trading partners, with damaging consequences.
A World Bank survey of 139 developing countries found that only 35
percent have a national plan to make systems Y2K-compliant. Last month,
officials from 120 countries gathered at the United Nations to discuss
the problem and agreed that their governments would assign it the
Having a national plan is only the first step. Carrying out such plans is
costly. Wealthy countries and large companies have the funds and skilled
people to immunize computers and operating software from the millennium
bug. Many developing countries do not.
Or they see the threat as vague and distant. Yet many developing
countries have regional sharing arrangements under which, for example,
they rely on a neighbor's electrical supply which uses computer
microchips and software that may not be Y2K-compliant.
Middle Eastern countries depend on computer-managed desalinization plants
for water. Oil drilling rigs around the world use embedded chip systems,
some of them buried on the ocean floor. Food and fuel distribution
networks, health care, education and road, air and maritime links could
be severely affected.
Emerging markets already weakened by capital flight could see their
recovery delayed as investors steer clear of companies which are not
Y2K-compliant. A worldwide interbank working group is conducting
assessments of Y2K progress in six key sectors, with a view to guidance
in making investment decisions. Many mutual funds are already avoiding
companies that do not have millennium bug action under way.
It is in emerging markets that the capacity to fix the bug is weakest.
One private-sector study found that companies in the worst affected East
Asian crisis countries have cut computer spending by more than 20
At the same time, these and other developing countries risk being further
undermined by a brain drain as high salaries and relaxed visa
restrictions in wealthier countries siphon off qualified computer experts
just when their skills are most needed at home.
The lack of interest in this issue is surprising. The millennium bug,
living mysteriously and unseen within the microchips and software of the
world's computer systems, could trigger a global catastrophe. The problem
is technical. Most of us are reluctant to acknowledge how much we depend
on technology, so political leaders have only recently been persuaded to
Even if we can succeed in overcoming this resistance to accepting the
problem as serious, the challenge still looms large. It is already too
late for most developing countries to carry out enough Y2K preparations
to avoid disruption.
Instead they should urgently devise contingency plans, identifying
critical sectors and systems water, power, food, health care,
telecommunications, transport, finance and trading and checking the bugs
in them, while preparing backup plans should these systems fail on Jan.
Estimates of what it will cost to fix the millennium bug worldwide vary
greatly, but we can get some idea by analyzing what major players have
earmarked for the task. Chase Manhattan Corp. is spending $363 million,
and DuPont Co. $400 million, while the U.S. Education Department's
projected Y2K costs are $45.5 million
The World Bank, the OECD and a handful of donor countries such as
Britain, the United States, Canada and Italy, together with other
multilateral development banks and international private-sector
organizations, have undertaken an effort to raise Y2K awareness and
mobilize technical assistance and funds to help developing countries.
These efforts are extremely modest, given the enormity of the task and
the global impact of a failure to act. It is now obvious that next Jan. 1
will unleash a chain of problems that will touch everyone on the planet,
with the most damaging effects hitting the least prepared, namely,
governments and businesses providing services to the world's poor.
Efforts by the World Bank, the United Nations and others can support some
Y2K fixing, but their most important effect should be a wake-up call to
national and local governments, companies and international organizations
to get involved in preemptive action now.
Developing countries must devise contingency plans for those vital
systems that are not yet Y2K-immune.
The writer, coordinator of year 2000 operational initiatives at the World
Bank, contributed this comment to the International Herald Tribune.