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Y2K In Arab Lands:
Complacency leads to Panic
While most businesses which depend upon computers should
be nearing completion of their Y2K compliance programs and
testing their systems, most small- and medium-sized
businesses in the United Arab Emirates still have yet to grasp
what this problem is all about. Press has been complacent. A few IT companies with
American and European connections as well as some international banks and
multinationals have only now taken the lead to increase Y2K awareness among
businesses.
UAE is a rich country with reasonably good infrastructure. Telecommunications,
electricity, water and other basic services more or less match the best in the
world. The main sources of income are oil and re-export trade. There are only a
few large industries. There is significant presence of large international banks and
many multinationals use UAE (especially Dubai) as a redistribution center for their
products. Multinationals use Dubai to distribute their products to Africa, Iran and
some CIS countries. Goods from Far East transit Dubai port on the way to Europe.
A large number of small and medium businesses in UAE are individually held
trading companies. Mostly the owners are not well conversant with IT and use PCs
only for maintaining their accounts and stock inventories and as word processors.
They use either standard software or customized packages based upon database
management systems. Their PCs are not connected to computers of their suppliers
or customers. Even with this limited use there are bound to be Y2K related
problems. As an example I know of a travel agency which uses software developed
on DBASE IV. Their software is not Y2K compliant. They haven't yet heard about
the Y2K problem and are doing nothing to make their software Y2K compliant.
None of the airlines have asked them about their compliance efforts, thereby
putting the airlines at the mercy of this travel agency that books the majority of
their flights.
Most international banks & multinationals of American and European origin, which
are operating in UAE are aware of the Y2K Problem and may be taking adequate
action. However, there is no public disclosure by them about their Y2K compliance
status. On 20th May 1998, British Bank organized a seminar to increase awareness
of Y2K. Early next month Unilever, Arabia is organizing a conference where some
top government officials and some known IT consultants are expected to
participate.
There has been very little written on this subject in the local dailies. The
awareness among most UAE citizens is near zero. Many of those aware of Y2K
believe that this lack of public awareness is due to the fact that most government
entities, including the government controlled telecommunications company, the
electricity and water authorities, the Dubai Ports Authority, and the Airport
Authority will be on time with Y2K compliance. This expectation is based upon the
fact that these companies have proven high standards of performance and far
sightedness. The need for public disclosure has not been felt because of these
entities' confidence.
Almost all oil companies are big and use the latest technology. It is not publicly
known whether these companies are already compliant or they are working on
compliance. Oil transportation certainly depends upon shipping and the
interdependence of the oil industry and shipping is a matter worth consideration.
Due to no legal requirement of disclosure by large companies and very little press
coverage, people, in general, don't believe that the elevator in their building could
malfunction on 01-01-2000. They don't believe that an oil rig could have some
non-compliant chips deeply embedded in its machinery and repair could be
prohibitively costly. They don't believe that their bank's computer may close their
accounts because of "no recent activity" as on 01-01-2000. It may be beyond their
imagination that telephone lines may not be operational and there may be long
power interruptions. To such people it is impossible that the coolant in the airport
radar system may not flow on 01-01-2000.
Sooner or later the press is going to get alarmed and they will finally start telling
the people about the dangers of Y2K. Y2K related failures will begin to occur
possibly as early as this year. Coverage will be given to sensational failures and/or
Y2K noncompliance disclosures by giant companies. Companies that do become
compliant will want to insert full-page advertisements in national dailies touting the
advantages of doing business with a compliant company. The Y2K awareness in UAE
will certainly be increased, however it will more than likely happen too late.
Trading business owners have huge amounts of money lying as fixed deposits with
banks and in US stocks. In the little time then remaining they will more than likely
want to be the first people out of UAE. Those who haven't heard about this
problem till that time date will certainly be the most worried. Those who dismissed
the thought of Y2K related problems will certainly be the ones to cause them.
This sudden awareness with very little time remaining is a sure prescription for
panic. The stage is set.
Also, there is talk of US$600 billion of Middle Eastern money lying in US stocks
and bonds. Imagine if a significant portion of this is brought back or converted to
precious metals. Would it cause a stampede out of an already too high market?
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