Posted at 9:50 a.m. PST Thursday, December 11, 1997 Battered Asia scrambles to beat year 2000 bug KUALA LUMPUR, Malaysia (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.'' 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 firms 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. COST OF FIXING THE PROBLEM Estimates for the cost of fixing the bug vary, but a study by Killen & Associates released in the United States in August said spending on systems integration, professional services and outsourcing for solving the problem will reach $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 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. Asia has seen both the best and worst of preparedness in the battle against the bug. Some governments such as Singapore and 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, 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 such as India may 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. WORST AFFECTED COUNTRIES ``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 infrastructure, that means they probably just bought their first computer system and those are likely to be 2000-compliant,'' said analyst Howard Hsu at U.S.-based International Data Corp's 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. 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. Tickner said priorities for each country will depend on the industries key to its economy and each company will have to assess what systems are core to its existence. ``There is a generally accepted approach called triage: we will save some, stabilize some and give up on others.''
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