IBD. No Nation Is An Island In Year 2000
Date: 4/14/99
Author: Laura B. Smith
The good news regarding the Year 2000 problem is this: The U.S. is further along than perhaps any other nation
in fixing the glitch.
The bad news? All the countries lagging behind could be our nation's undoing.
Analysts say the gap is widening between the companies and government agencies around the world that have
made progress and those that haven't begun to address the computer bug. Many computer systems were built to
read two-digit dates and may confuse the year 2000 with 1900.
Countries plagued with increased inflation, limited monetary reserves and high unemployment are some of the
countries furthest behind with Year 2000 compliance. They include: Russia, China, India, Thailand, the
Philippines, Argentina, Venezuela and those in the Middle East, except for Israel.
Computer failures in these countries could result in panic, unrest, increased crime, food interruptions and health
and safety issues, says researcher Gartner Group Inc. Americans will pay for fixing Year 2000 here and abroad
through a considerable increase in the cost of goods, says Gartner Group analyst Lou Marcoccio.
They'll also pay for it through government subsidies to countries that need money to fix the problem, Marcoccio
says.
''A number of countries, including Russia, have asked us to give them money and help them fix (the problem),''
Marcoccio said. ''Russia needs us desperately right now for a whole host of reasons. We need for the Russian
economy not to collapse.''
Gartner Group predicts that in the U.S., power, telephones and other critical services will continue uninterrupted,
with few exceptions. And most large insurance, investment, banking and utility companies will make it so that 90%
of mission-critical systems that fail can be corrected within three days.
Moreover, only 10% of failures will occur within two weeks after Jan. 1. The rest will occur over an 18-month to
two-year period, dispersing the impact and giving companies more time to deal with the problems.
Gartner Group takes the long view with regard to personal investments, and advises leaving money in the market.
The U.S. Securities and Exchange Commission has issued strong orders to companies listed on stock exchanges
to be forthright in their Year 2000-readiness reporting, or else be subject to delisting before investors can be hurt.
Still, it's difficult to be comforted. People are unpredictable, and the potential for panic is alarming. Take recent
reports that U.S. gun and munition suppliers are running months behind in filling orders from people who never
owned guns before, and who fear anarchy after Jan. 1.
Couple that with Russia's response to the Kosovo bombing, and the outlook can be frightening. Russia reportedly
has called off Year 2000 cooperation with the U.S. as a protest.
''We need to tread lightly,'' Marcoccio says of the U.S.-Russia initiative. ''The key there is that we, from a foreign
policy perspective, had better be using (the problem) as a leverage point.'' The distress has been enough for some
people to head for the hills, or at least the suburbs surrounding them. That's exactly what Ed Yourdon did after
writing ''Time Bomb 2000,'' a book that explores possible scenarios after Jan. 1.
Yourdon says he and his wife were planning to leave Manhattan at some point in the next few years, as the last of
their three children became settled at college. Because of Year 2000, the Yourdons left early.
There are few safe havens for others wishing to leave metropolitan areas. Sixty- five percent of U.S. cities and
towns have no Year 2000 projects under way, according to Gartner Group.
Is Yourdon more concerned about Year 2000 fallout than he was when he wrote ''Time Bomb 2000''?
''More so, for two reasons. One, the international outlook is worsening, and when my daughter and I wrote the
book in the summer of '97, we didn't really look at small business,'' he said.
As of October, 23% of all companies and govenment agencies worldwide had not started any Year 2000 effort.
Eighty-three percent of those are small companies with fewer than 2,000 employees.
The problem is that small businesses are often key suppliers to larger ones.
''At least 50% of small businesses haven't done anything, and probably won't do anything,'' Yourdon said. ''If they
run into problems, the larger businesses could face a problem, regardless of their own compliance.''
(C) Copyright 1999 Investors Business Daily, Inc.
Metadata: E/IBD E/SN1 E/TECH |
