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Southeast Asian countries showing starkly different rates of readiness Bug bears down on Indonesia
Source: South China Morning Post
{ Recent economic problems have taken their toll on preparations for the millennium bug in Southeast Asia, writes BARRY PORTER in the fourth of six articles on how Asia is coping with the Y2K threat. }
Floods, droughts, riots, haze, massacres and financial collapse. It has not been a good couple of years to the end of the millennium for Southeast Asia.
The Jesus is Lord Church in the Philippines sees this as confirmation of the Lord's second coming, comparing the Y2K computer bug to the great flood in Noah's time.
Meanwhile in Malaysia, transport bureaucrats have already been equipped with a Contingency Plan Recovery Kit, containing a candle and old-fashioned rubber stamps for counter staff in readiness for any technology problems.
So will chaos and mayhem engulf Southeast Asia come January 1.
The answer is likely to be both yes and no. With the clock ticking down, there appears to be startling different degrees of Y2K- readiness across the region.
Not surprisingly, Singapore seems most prepared, while crisis- torn Indonesia has been placed on the US Central Intelligence Agency's list of the world's most-vulnerable nations.
Bruce Gale, regional manager at Political and Economic Risk Consultancy, said: "If there is going to be a problem in the region, it is going to be there."
"Do you really think Indonesian banks have spent much time preparing themselves for such a matter when they are concerned about their survival. It's probably the same with the airports."
Bibiana Choo, first vice-president at Merrill Lynch Asia-Pacific, is most concerned about Perusahaan Listrik Negara (PLN), Indonesia's state-owned power-distribution monopoly.
Should PLN's computer systems fail, it could have quite serious nationwide repercussions.
"It is facing big debts and we understand that it may not be Y2K- compliant at the turn of the century," Ms Choo, who recently completed a regionwide, in-depth study, said.
Telkom, Indonesia's dominant domestic telephone provider, has also raised eyebrows over its readiness.
It was supposed to be Y2K-compliant by the middle of this year, but is now believed to have put back its deadline back six months to December, cutting it fine.
Chris Morris, vice-president for Asia-Pacific research at international information-technology (IT) consultants Gartner Group, said: "Southeast Asia's Y2K-readiness has clearly been affected by the economic downturn of the last year or two.
"We hear of IT budgets in Indonesian firms having been slashed 80 per cent. Currency devaluation has also hurt IT budgets elsewhere in the region, like Malaysia."
Gartner bearishly predicts that 40 per cent of companies worldwide will experience some kind of Y2K-related mission-critical IT failure, if not on January 1, sometime during the new year.
Not one Southeast Asian country has made it on to its level-one readiness list.
Singapore scored best, featuring on its level-two list, with 33 per cent of firms forecast to suffer glitches of varying degrees.
Tharman Shanmugaratnam, deputy managing director at the Monetary Authority of Singapore (MAS), said: "Singapore's financial sector has already achieved a very high level of readiness.
"Internal and external testing of all critical systems has been completed. The MAS is fully confident that the financial sector in Singapore will remain sound and resilient in the transition into 2000."
Gartner placed Malaysia on its level-three list, with 50 per cent failure predicted.
Burma, Cambodia, Indonesia, the Philippines, Thailand and Vietnam joined the mainland on the level-four list, with at least 66 per cent of firms forecast to suffer failure.
Credit Suisse First Boston has also cited Indonesia, Thailand, Malaysia and the Philippines among its list of most probable problem countries, although analysts note that Thailand and the Philippines do now appear to be getting their skates on.
Hiccups are not expected in the most obvious of places.
The most IT-dependent sectors, such as airlines, stock exchanges and financial institutions have been well aware of the Y2K problem for several years and most seem well prepared.
Irrespective of this, most countries in Southeast Asia have declared December 31 a public holiday as a precaution. In some cases, also January 3.
Most big institutions will close their year-end books early and manufacturers and stores will stock-up in advance in case of any supply-chain breakdowns.
In fact, financial activity could be so low around the millennium there could be liquidity problems for those still needing to settle transactions.
Singapore's MAS has set up a special Y2K liquidity scheme to provide temporary assistance to registered banks and finance companies should they be unable to obtain funding in the market.
All Southeast Asian airlines are expected to continue flying on December 31 and January 1, although some, such as Singapore Airlines, will have reduced schedules, grounding aircraft during the critical midnight switch-over period.
Contrary to some media reports, Vietnam Airlines will not be shut during the transition period.
However, because not all Vietnamese computers will be ready in time, the country's two national airlines have been ordered to train pilots to fly without radar by November 30.
Analysts still have some concerns about air traffic control in parts of the region.
However, simplified air traffic channels will operate over Asia to limit the risk of aircraft collision.
The Bangkok-based International Civil Aviation Organisation will act as an emergency co-ordinating centre.
Problems are primarily expected more among cash-strapped or apathetic small to medium-sized industries, government departments and state-owned enterprises.
Gartner's Mr Morris said: "Government departments are typically chronically under-funded."
The Philippine House of Representatives, which fast-tracked a Y2K law making non-compliant firms liable to sanctions, is ironically among the laggards and will not be ready until December 15.
The Philippines' treasury, customs, traffic agency and state pension fund are not yet ready either.
Thai Deputy Prime Minister Trairong Suwankiri has ordered 231 government agencies to submit Y2K reports every 15 days.
Its foreign affairs, agriculture, co-operatives, labour and justice ministries are among those not ready. Thailand's non- compliant Defence Ministry has been ordered to switch its missile systems off, rather than risk a potential disaster.
The Electricity Generating Authority of Thailand and Metropolitan Waterworks Authority are also not yet ready.
In Malaysia, analysts have expressed concern about national power grid Tenaga Nasional's readiness.
The low degree of readiness in Laos, Cambodia and Burma are of less concern because of their low level of computer dependency.
Burma, for instance, does not have any nationwide computer systems.
Large tracts of Indonesia are also hardly computerdependent.
Publication date: Oct 22, 1999
¸ 1999, NewsReal, Inc.
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