From: Michael Wilson (MWILSON/0005514706at_private)
Date: Sun Dec 14 1997 - 10:15:41 PST

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    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.
    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.
    ``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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