PROBLEMS HAVE ALREADY BEGUN

• A Swedish woman received a letter informing her of the various schools on offer when she reached 10. She was, in fact, born in 1890.
• A tin of corned beef from Marks & Spencer was rejected on the ground that the food was 96 years out of date.
• In Holland, gas stations rejected motorists with newly issued bank cards that carry expiry dates of 00. A date roll-over check on a power station led to its shut down within 20 seconds. The fault was traced to a stack temperature sensor that was programmed to minimize fluctuations over time, using the date to make calculations.
• In New Zealand the millennium bug has hit the law enforcement computer that stores the confidential files of hundreds of thousands of people. In what experts fear could be a portent of the chaos to come, the Wanganui national police computer system failed to recognize the year 2000 when police try to set court dates for people arrested for traffic offenses. The glitch has been around since the New Year and is believed to be the first instance of the bug in New Zealand.
• The Civil Aviation Administration of China says it licked the bug in its ticket bookings system in July and work is underway to deal with departure and cargo-handling systems.

Already in the U.S.

• The Social Security Administration tried to set up a payment schedule that ran beyond the end of the present century; the computer system could not process it.
• A computer clock set to 2000 at Chrysler Motors shut down the security system and kept staff inside.
• A sewage treatment plant found that in year 2000, valve-control systems would have released untreated sewage into the rivers.
• During a test in an American nuclear power station, the device that controlled the depth of the fuel rod in the core began to oscillate because the air-conditioning system in the control room failed and the temperature rose).

Businesses and governments around the world, have been cranking up efforts to solve the problem before time runs out. The general consensus is that the United States is far ahead of most of the rest of the world in addressing the Y2K issue. The federal government in the U.S. is lagging in its task to fix the millenium bug, but at least it has been open about it. Across the world, politicians have been slow to wake up to the impending crisis. In terms of business preparedness, the United States and Australia are in the lead; Canada, Britain, Israel and Sweden are six months behind; France and Italy six to eight months behind; Japan a year; and Germany a year to 18 months. Many large companies and other bodies in Eastern Europe, India and much of Asia and South America have hardly started. Some countries appear torn between alerting their citizens to the looming problem and avoiding panic. They prefer to take a wait-and-see position.

Here are some of the startling details.

European Community faces early from Y2K glitch. The biggest troubles may be in Europe, where companies do not have sufficient resources to cope with two nearly simultaneous problems: the introduction of the single currency, the Euro, on Jan. 1, 1999, and the start of the next millennium. Finding "solutions" to the Euro implementation problem is more difficult than the Year 2000 problem. As huge as it is, the Y2K problem, in essence, presents the same problem over and over again. Euro implementation problems, on the other hand, are more varied and diverse. There will be a shortage of people and resources as Year 2000 approaches. The United States' hunger for Year 2000 professionals could lead to a European brain drain as U.S. companies snatch up European workers. It's estimated that the costs of updating European software alone will come to $85 billion for the Euro conversion, on top of $95 billion to prepare for the millennium. At the Symposium ITXPO98, Gartner's annual European conference held last month month, it was revealed that the European governments are failing to protect their citizens against the Y2K fallout. The consequences of their inaction are likely to start at the end of this year in hospitals and welfare systems. While European governments are dependent on large scale computer systems to dispense welfare and to run public institutions, they have only spent between five to ten percent of what it needs to fix their systems. Experts believe that many computers may crash at midnight on December 31, 1999 because they use double digit dates like 97 and 88. Computers controlling operations like payroll or pensions may die or send out erroneous data when faced with the double zeros of year 2000. On top of the millennium bug, the introduction of the Euro may cause chaos across Europe. Transactions between businesses denominated in the Euro begin on January 1, 1999 - a huge task for companies that must change accounting and sales systems. Most businesses in Europe haven't yet looked at the implications of the Euro. For a significant number of companies and industries, both the Y2K problem and the Euro currency problem are occurring simultaneously. Banks, financial institutions, retail and wholesale enterprises, and taxation agencies are faced with the impossible demands of attempting to modify software for Euro currency conversion by January 1, 1999 and fix the year 2000 problem by January 1, 2000. The Dutch, Swedes and the Irish have done a good job, but very few European governments can stand up to the Gartner's scrutiny. The United Kingdom, is considered to be one the most Y2K ready countries in Europe. The former Conservative government set up Taskforce 2000, an agency dedicated to preaching the gospel of Y2K preparedness to British industry, back in 1996. The Taskforce estimates that 95% of UK organisations are aware of the Y2K problem. Germany, a considerably more computer dependent economy with its reputation for efficiency and technological leadership, would appear to have all the right credentials for the Y2K fix. In fact, Germany is seriously lagging behind in Y2K preparations. The main reason is that the country's industry and leaders cannot seem to see past January 1, 1999, when the Euro first becomes a currency in Europe. They are focused on the Euro, but have little understanding of Y2K.

Finland and Russia's nuclear plants. Finland is working double duty by examining the year 2000 readiness at agencies outside its national borders. While waiting to verify that its own nuclear power plants are ready for year 2000, Finland-is also trying to verify that two Russian nuclear power plants near the Russian Finnish border will also pass the year 2000 test. Finland has asked Russian authorities for safety information concerning a Russian nuclear plant in Sosnovyi Bor (which contains four nuclear reactors and is located near St. Petersburg) and one in the Peninsula of Kola. Russia built the plants at a time when the country had no access to Western automation or computer technology and therefore relied heavily on analog technology. The plants' analog devices will not cause any year 2000 failures. But whatever computers the Russians use in the running of the nuclear plants, they will be subject to the same year 2000 glitch as are anticipated throughout the world. A Russian nuclear disaster could quickly become a problem for a host of other countries. The plant in Sosnovyi Bor is like the Russian plant that failed during the 1980s in Chernobyl. A nuclear disaster in Sosnovyi Bor could bring nuclear fall-out to southeastern Finland and the city of Helsinki in just a few hours, given the proper wind conditions. Similarly a disaster among the four-reactor plant on Russia's Kola Peninsula could bring a nuclear danger to Lapland, northern Sweden and Norway. The Russian authorities, for their part, have said the plants will have no year 2000 problems. Russia and Finland are hardly the only countries considering the impact of 2000 on their nuclear plants.

Russia wait-and-see attititude. When it comes to Y2K remediation, Russia is probably the most backward among the industrialized nations. Russia had adopted a wait and see attitude towards the Y2K problem, in which the government would not begin work on Y2K susceptible systems until the problems sprang up, after January 1, 2000. The reasoning behind this policy was based on the fact that the government uses fewer computers than its Western counterparts; Russia's major computer systems are newer, and the programming more up-to-date, than is true in many places in Europe; and that these systems were designed differently, a fact that supposedly made them immune to the millennium bug. Only until May of this year that Russian government agencies are instructed to examine themselves for possible Y2K problems. With one of the largest nuclear weapons arsenals in the world, many believe that Russia is in no position to be taking chances with their computers failing. Many believe that when the millennium rolls over, the computers of Russian ICBMs (Inter-Continental Ballistic Missiles) may automatically launch when no one has interfaced with their central computer in a set period of time. The computers will think that it has been almost 100 years since they were last accessed and immediately launch the entire battery of nuclear weapons to different destinations around the world.

Australia - the lucky guy Australia is lucky in that, for the electronic exchange of customs and shipment information, it mostly uses the EDIFACT system of electronic data interchange, which has fewer year 2000 difficulties than the older, ANSI X.12 standard common in the United States. A clear message has been sent from the official level that it's the responsibility of all in the community to assess their systems and implement a rational action plan. The big companies like Telstra, the telecommunication giant and Qantas, the national airline, are rigorously putting the bug under control. The major banks claim that they are on time with their remediation program.

ASIA China to punish those who fail. It's only as recently as April this year that an article about the millennium bug appeared in the People's Daily. The State Council, decreed last month that all government computer systems must be revised by March 1999, and millennium bug tests must be completed by September 1999. Those that fail to meet the deadlines will be punished. Since the ruling, government run companies, and work units have begun preparing for possible Y2K glitches. The ministry of information reviews their progress every month. A task force responsible for dealing with the bug in government-run organizations has also been set up. Testing and correcting China's 10 million computers will take a long time, and the deadline is just 11 months away. China's leading computer company, the Founder Group, has already taken measures to protect its computers from crashing in the year 2000. But many small companies have dismissed the millennium bug as a problem for computer makers and have made no moves to prepare their systems. China, which is less vulnerable than many industrialized countries to the millennium bug due to a relatively low level of computerization, is still lagging behind the rest of the world. China's Y2K woes are compounded by the widespread use of pirated and specially designed software that cannot use off-the-shelf corrective programs. Hardware varies widely, and most companies or government bodies have no backup equipment to use while their computers are being fixed. The bigger challenge, though, may be getting businesses to place priority on Y2K when formerly protected state industries are failing and China's exports are being impacted by the Asian economic crisis.

Japan, Godzilla of non-compliance. Japan has been less vigilant about the potential for trouble ahead, partly because of the country's unique system for counting years. While the Japanese use the Western dating system when dealing with the outside world, they date documents internally by the year of the reign of the current emperor. The millennium problem feels less acute to the average Japanese. In a detailed report issued by the Japan Information Service Industry Association indicated that over 70% of the private companies have not begun the Y2K repair. For government agencies, the figure is 87%. Japan faces a shortage of computer engineers who can handle the Y2K. Only 30% to 40% write in COBOL or PL/1. Not all of them can be spared for a Y2K fix. They cannot safely hire foreigner programmers who do not speak Japanese. Most of Japanese computer systems are mainframe-based and require the comprehensive reprogramming and/or replacement. In addition, 70% of their software applications are customized as opposed to the United States, where 75% of the applications in use are packaged. What this means is that each of the customized applications will have to be adjusted or replaced individually, instead of in product groups. This fact will make a bad situation even worse, forcing software users to fix their programs one piece at a time. With this situation, one would expect the Japanese to be in a panic, frantically trying to update their systems before the inevitable date change. Unfortunately, Japan is not so worried. Many in the world financial community are alarmed at the prospects of a Japan that is unprepared for the turn of the century. Japan, the world's other hope as an engine of growth, may prove the biggest 2000 disaster of all: it's unwillingness or inability to confront the problem in time could send a shock wave through the global financial system. It is feared that its financial system may suffer catastrophic failure in January 2000. No one knows exactly what a Japan unplugged from the rest of the world would mean to the global economy. This could lead to a second wave of economic crisis for Asia next year.

India and The Philippines. Some countries, including the Philippines and India, may actually benefit from the situation because they have a wealth of computer-literate people with a knack for rewriting thousands of lines of mind-numbing code.

Hong Kong is in better shape. Hong Kong, once a British protectorate that has long been open to and embracing of Western ideas and practices, is in better shape. Hong Kong Telecommunications said recently that it would be millennium compliant by the end of this year but was afraid many of its clients would not be ready by 2000. Hong Kong Telecom has tackled 80 percent of its own potential Y2K trouble spots and aims to have all its systems--including 14,000 personal computers--Y2K safe by the end of 1998. However, 98 percent of Hong Kong's small and medium sized enterprises--which form the backbone of Hong Kong's economy and a substantial bulk of Hong Kong Telecom's customers--had little or no understanding of the Y2K problem. The Y2K risk with these companies is pretty high. Hong Kong Telecom had set aside $19.4 million to tackle the millennium bug and would spend all of 1999 conducting tests and setting up contingency plans.The company plans to contact clients whom it thought were not yet Y2K compliant and has set up a special service to advise clients on how to clear the millennium bug.

Latin America - The technology infrastructure of countries across Latin America is poor or non-existent. From a Y2K perspective, this could be perceived as good news as there are very few systems to update. As elsewhere, it is the information intensive private institutions such as banks which have taken leadership roles in Y2K preparations. Government agencies handling taxes, social security or pension records have also begun to investigate Y2K implications. Some countries are further advanced than others. Brazil and Mexico are probably the most advanced than Venezuela, Colombia, Chile, Bolivia.

Although the United States is making headway in dealing with the looming Y2K computer crisis, the global economy is so intertwined that the rest of the world, which is lagging behind in fixing defective systems, could drag the U.S. down with it when the millennium arrives

Baltimore, MD.  Sun, 8 Nov 1998
VACETS Column