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Asia Lags in Fixing Millenium Bug, Survey Says

By Lazar Bloch, IPS
16 August 1998

NEW YORK, Aug 16 (IPS) - Asian countries face a potentially ruinous computer breakdown, experts say: if they cannot correct computer chips to register the year 2000 properly, the advent of the new millenium could cause glitches in everything from elevators to stock markets.

The problem of trying to calibrate computer chips and programmes to read dates correctly following the year 2000 could be "one of the most complex managerial challenges in history," US President Bill Clinton has argued.

Many Asian countries are perilously far behind in preparing for the Year 2000 bug, according to a recent survey by the US-based Gartner Group. International policymakers and businesses are grappling with a problem which, although 16 months off, may be coming too soon for some countries.

"The Asia and Pacific region has been too slow in getting prepared for the date that many computer systems cannot handle," the UN Economic and Social Commission for Asia and the Pacific (ESCAP) said in a report last November.

The Gartner Group survey confirms what many who have been following the story already knew: Developing nations will suffer the worst from the bug's consequences. Asia will face unique obstacles in dealing with the problem effectively, including the regional economic slowdown since last year.

Hard-hit Southeast Asia, as well as India, China, and Japan, "all lag (behind) the US by more than twelve months," according to the Gartner report. Only 50 percent of Japan's businesses will avoid serious failures, the survey predicts. India and China are faring even worse, reports Gartner, with two-thirds of their companies facing the prospect of serious failures.

The US Central Intelligence Agency (CIA) is reporting similar findings. The Agency rates Japan, Hong Kong, China, and most other Pacific Rim countries as "maybe nine to ten months behind in terms of where the work should be," said Sherry Burns, the head of the CIA office in charge of studying the issue.

The survey rates 15,000 companies and government agencies in 87 countries in terms of their preparedness in correcting the millenium bug. With only 16 months to go, the Gartner survey contends, 23 percent of companies worldwide have yet to begin dealing with the issue.

According to the Gartner survey, the United States is one of the leading countries in preparedness for dealing with the bug, along with Australia, the Netherlands, Belgium, Canada, and Sweden. Even in these countries, however, many experts believe that some companies will be forced to accept losses as the deadline looms, and technology and skilled programmers become scarcer.

The computer bug, called 'Y2K' by experts, results when computer chips and programmes which read dates in two-digit dates are confronted with the change in millenium. If those chips and programmes are not reprogrammed in time to read years from 2000 onward, computer technicians believe many will read the year as 1900 - or crash altogether.

That flaw can create huge problems in a variety of systems, ranging from elevators to air-traffic control systems to automatic invoicing programmes, experts say. Some even predict a global recession as a result of the bug, although projections range from a minor economic slowdown to total global collapse.

Not all Asian countries are necessarily in as great a danger as the Gartner study indicates. Some countries such as Laos, Vietnam, Cambodia, Burma, and India, may face fewer Y2K-related difficulties, because they are only newly computerised. This means that their computer systems are newer and therefore proportionally better equipped to handle any glitches resulting from the change of millenium, said Howard Tsu of the US-based International Data Corporation's (IDC's) Hong Kong office.

India may also be in a unique position to deal with the Y2K bug, because of its capacity to devote relatively large human and software resources to the project. Some local analysts are even predicting a Y2K-related boom in the region as skilled Indian programmers export their skills throughout Asia.

For the most part, however, Asian companies are finding it difficult to garner the resources to fix the bug. Especially in Southeast Asia, "many people are thinking 'Hey, my business has got to get through the next six months, then I can start thinking about the year 2000 problem'," Mac Jeffery of IBM Asia Pacific told USA Today.

Local policymakers are struggling to help their companies keep up, but are finding it difficult due to their limited financial resources. Governments in Singapore and Taiwan are offering loans to small businesses, so that they can develop programmes to deal with the problem; but in many other countries, the public sector has little to offer. In a more typical case, the Thai government recently had to slash its Y2K programmes in half following the year-long financial crisis in East Asia.

Most disturbing from the global perspective is Japan's response to the crisis. While many Japanese companies are attempting to address the problem, some Western experts are saying that many Japanese programmers are not spending enough time running vital trial-and-error tests to determine the effectiveness of reprogramming efforts.

Other factors are slowing the response in Japan, and in other Asian countries. Many of these countries' companies are still unclear about the nature of the problem, and think that it will not effect them, because they do not operate their day-to-day business on the Gregorian calendar - and thus do not have a change in millenium coming their way.

In Japan, for example, many companies operate on the nation's Imperial Calendar, which starts over with each new emperor.

Although these companies' invoices, and other paperwork, is dated by these traditional calendars, their computer systems are still as vulnerable as Westerners' because the operational language the computer uses is based on the Gregorian calendar. "Deep in the core operating system, the machine knows it's 1998 - it's just recalculated," said Jeffery.

The financial sector, including banking, insurance, and investing firms, has generally taken the lead on this problem globally, and this trend has carried through to Asia as well, according to the Gartner Group report. A Merrill Lynch report also found that "a majority of (Asian banking) institutions under our coverage are expecting to be compliant by the end of the year (1998)."

"There is a generally accepted approach called triage. We will save some, stabilise some, and give up on others," said David Tickner, programme manager of Digital Equipment's Year 2000 programme, on the station CNET's website. (end/ips/lb-fah/98)