Asia scrambles to beat year 2000 bug
Asia scrambles to beat year 2000 bug
By Christina Toh-Pantin
KUALA LUMPUR (Reuters): Asia's currency crisis may have pushed
aside another worry that the region will have to rush to resolve
as the decade draws to a close -- the "millennium bug" that
threatens computer systems worldwide.
"There are some parallels at the moment with the economic
problems of some countries and the Year 2000 (bug)," said David
Tickner, Digital Equipment Corp's Year 2000 program manager.
"There's every likelihood that the currency crisis will
prevent budgets being spent on 2000," he said.
Asia has been racked with a fall in the value of its
currencies since the summer, with devaluations hammering once-
robust economies throughout the region.
At least half a dozen Asian countries have seen their
currencies plummet to historic lows as financial and property
crises scuttled economic growth prospects, sending investors to
the exits.
The Millennium Bug or "Y2K" problem, is a worldwide computer
programming fault that could cause computers to view the year
2000 as the year 1900, leading to systems crashes and business
upheavals.
Banks, insurance companies and other financial service
companies are thought to be especially vulnerable as they make
interest payments and other calculations based on dates.
To save space in coding, early computer programmers used just
two digits to denote years. Rectifying the mistake now involves
going over millions of lines of code.
Estimates on the cost of fixing the bug vary, but a study by
Killen & Associates released in the U.S. in August said spending
on systems integration, professional services and outsourcing for
solving the problem will reach US$280 billion between 1997 and
2002.
The study projected that 52 percent of the money spent would
be in North America, 28 percent in Europe, 17 percent in Asia,
two percent in South and Latin America and one percent in Africa
and the Middle East.
Australia is expected to see a A$5.5 billion bill to fix the
computer glitch, according to accountancy firm Coopers & Lybrand,
while private companies like Singapore Telecommunications
(SingTel) have said they will spend at least S$20 million on the
problem.
Thailand
Asia has seen both the best and worst of preparedness in the
battle against the bug. Some governments -- Singapore, Malaysia
-- have taken an activist role in promoting awareness of the
problem and goading the private sector into solutions.
Thailand's stock exchange in November urged all those involved
in the country's securities industry to begin preparing their
systems to cope with it.
Otherwise, it warned that investor confidence -- already shot
by the devalued baht and an economic slump -- could be further
endangered.
"Any calculations which rely on the date, such as interest
payments, could be completely wrong and affect the confidence of
investors," the stock exchange statement said.
Other countries like India may, out of natural circumstances,
be ahead of the game.
"The Millennium Bug in India is not going to be that big a
problem," said Ajay Kumar Malpani, research analyst at Caspian
Securities in Bombay.
He said India would fare better "because of its wide software
resources and its ability to provide manpower and skills (to the
problem)".
In fact, India may be a source of solutions to the bug because
of its robust software development industry. Software firms in
the country could see $5 billion in business over the next five
to seven years from the Y2K problem, according to the National
Association of Software and Service Companies.
"The worst to be affected will be countries like Japan, Hong
Kong, Singapore," Malpani said.
"They have been late versus the United States in tackling the
problem. These countries woke up very late to this problem."
Countries that have been slow to get on the computerization
track may also be the least hurt by the problem, analysts say.
India falls into that category, but so do the lesser developed
economies of Laos, Vietnam, Cambodia, Burma.
"For some of the countries which have less developed
Information Technology (IT) infrastructure, that means they
probably just bought their first computer system and those are
likely to be 2000-compliant," said Howard Hsu, IT analyst at
U.S.-based International Data Corp's (IDC) office in Hong Kong.
Hsu said a survey IDC conducted this year which questioned
corporations in six Asia-Pacific countries about the level of
Year 2000 projects showed some disparities.
"India is very far ahead, with 44 percent of respondents
already started with Year 2000 projects," he said.
"In China, only about eight percent have already started their
projects. You can see there's quite a big gap."
The other countries surveyed yielded the following results:
Hong Kong (20 percent), Korea (17 percent), Malaysia (28 percent)
and Singapore (33 percent).
"Whether they can make the deadline is hard to say," Hsu said.
Added Maplani in Bombay, "It's a very manpower intensive job.
Economies which cannot spare manpower will find it very difficult
to do these things."
Countries like Malaysia, though small, have to import labor
for various industries including construction.
Australia-based Tickner said priorities for each country will
depend on the industries key to its economy.
"There is a generally accepted approach called triage: we will
save some, stabilize some and give up on others," he said.