[asia-apec 927] Y2K discussion on the Global Knowledge for Devt list

[Roberto Verzola]

Y2K PANEL DISCUSSION (Nov. 1-8, 1998)

This week the discussion on the impact of the Y2K problem or
Millennium Bug on developing countries was launched. The discussion
will last at least until November 20. Panellists Douglass Carmichael
(USA), Roberto Verzola (the Philippines) and Henry Watermeyer (South
Africa) each posted an opening message to the list.

Roberto Verzola's argued in his contribution "The Millennium Bomb: A
Time Bomb in the Heart of the Industrial Economies (Should we prepare
for the blast or the fallout?)" that developing countries have less to
fear from the Year 2000 problem, or Millennium Bomb as he calls it,
than highly industrialized societies. "The less highly-automated - and
therefore electronically-dependent - a society is, the less vulnerable
it will be to the M-bomb." He suggests that developing countries
should be more concerned about the economic and financial
ramifications of the impact of Y2K on the North. He proposes to build
'firewalls', that is isolate banking institutions and local markets
from the global market and unlink local currencies from the US dollar.
"Forget about open economies and globalization. The more open our
economy is, the more susceptible we are going to be to millennium
fallout."

According to Douglass Carmichael "the real problem is that the overall
effect of [Y2K] is fairly unknown". He sees in the Y2K problem an
opportunity to change the organization of the global economy. Thus,
efforts to exterminate the millennium bug "should not be to act fast
to make Y2K merely go away. We should look at all attempts at fixing
to be also thoughtful investments in a future we want. Doing all the
work, at the very high cost, should result in businesses and
organizations that are more effective, safer, better documented, and
aligned with the organizations' hopes for the post Y2K environment."
Carmichael also points out that there are big problems with method:
"Reporting the percentage of systems fixed (or in the various
subphases of the process; assessment, remediation, testing, return) do
not tell us much. Reporting must include stories about what is being
found along the way, and must include stories about the implications
if what is not yet fixed does not get fixed". He mentions Mexico as a
developing country that seems to have implemented policies that will
make it ready for the new millennium.

Henry Watermeyer notes that the nature of the Y2K problem is "fairly
well understood", especially by the private sector. He is afraid,
however, that in particular, governments and the small and
medium-sized enterprise sector will be affected on a large scale. Both
developing countries and highly industrialized societies will be
effected by the millennium bomb. Watermeyer said "There is a view that
suggests that the problem in the lesser developed countries may be
smaller. I suggest that while that may well be true, there are in
almost all these countries some systems, like air traffic control,
banking and the like that will effect not only the citizens of those
countries but also those who pass through. Physically or virtually!"
He sees two major sectors at risk: those who have large and key
facilities under their control, like power generation,
telecommunications and air traffic control; and those people who don't
know that they are at risk, for example hospital administrators, who
don't know that the equipment they use contains embedded computers. He
sees an important role for public awareness campaigns. "The domino
effect of business and service failure is going to put the fragile
world economy into a spin", he concludes.

Y2K PANEL DISCUSSION (Nov. 8-14, 1998)

After their first contributions the panelists Douglass Carmichael,
Roberto Verzola and Henry Watermeyer responded to each other and
subsequently the discussion was opened up to other GKD members.

Henry Watermeyer pointed out that although we do not know the exact
impact of Y2K, developing countries can protect themselves from the
bug. Yet he warned that "the year 2000 and its impact is a bit like
falling pregnant; 'you will either be affected or you will not'. You
cannot be a little pregnant!!". He claimed that governments will not
be able to protect us all from the Millennium bug. Legislation will
not help either. He recommended a 9-step plan to be taken by every
computer systems manager. He also described how his university
(Witwatersrand, South Africa) was making its own systems Y2K
compliant.

According to panelist Roberto Verzola globalization has made the
problem worse: "The problem should be obvious to any system designer:
the presence of too many global variables, the geometric rise in
potential interactions among widely distributed components, too much
coupling among subsystems -- hallmarks of a poorly-designed, buggy,
failure-prone system." He suggested a 'modularization' instead of
'globalization' type of design: break up complex systems into smaller
subsystems, which all have as little interaction with each other as
possible except through very well-defined interfaces. Mutatis mutandis
this 'modularization' analogy can be applied to economies of
developing countries: they should become more self-reliant than they
currently are. All panelists seemed to agree that as much as Y2K forms
a thread for the global economy it also offers opportunities for
change and innovation.

Panelist Douglass Carmichael agreed with Roberto Verzola. He
introduced the concept of 'neo-feudalism': "Y2K nudges towards
decentralized technologies. We might see the time coming when
production at a distance loses its advantage and local production
gains." In his opinion it is important to link strategies across
countries and realize that in being more self-reliant developing
countries are ultimately better off. He also pointed out that the
government of Honduras has decided that its Y2K policy is to go beyond
recovery and to redesign systems.

A GKD member posted an article from the Financial Times on Y2K
readiness in Europe. Cap Gemini, Europe's biggest software and
services company, urges governments to give up a broad-based approach
to the problem and focus their efforts on fixing computer systems that
operate essential services. Another member wondered what plans exist
in the USA and United Nations to accomodate the substantial impact of
Y2K on the world economy.

Many discussants raised the importance of considering Y2K not mainly
as a technical problem but also as a 'psychological' one. Alarmist
language such as 'bomb' or 'war' might contribute to anxieties among
(rather uninformed) citizens. The tension will very likely rise as the
millennium approaches.

Another member raised the question that if it is too late to achieve a
broad "cleaning-up" then which are the areas on which to concentrate?
Should a disaster management approach be taken? In response a member
warned that if governments "treat the M-bomb as the worldwide disaster
it really threatens to become, all confidence is off and the whole
financial bubble can burst. We are all treading today on ice that is
getting thinner as the global financial crisis deepens and the
millennium approaches, and last thing governments want to do is start
a stampede." Henry Watermeyer repeated that "in essence the problem is
a technical one ... but the implications, as with so many IT projects,
are not technical at all. They are economic and social." He sees
opportunities for developing countries' economies after the new
millennium.

Finally, GKD members suggested a number of useful resources and
practical steps to make systems Y2K compliant.


Y2K RESOURCES

**On embedded systems**
'National and Global Implications of the Year 2000 Embedded Systems
Crisis'
by Paula D. Gordon, PhD.
<http://www.year2000.com/archives/action.html>

The Institute of Electrical Engineering:
<http://www.iee.org/2000risk>http://www.iee.org/2000risk/>

Plant Y2K: A white Paper that Discusses the Significance of the Effect
of the Millenium Bug (Y2K) on Process Control, Factory Automation and
Embedded Systems in Manufacturing Companies:
<http://www.tavtech.com/Files/TAVE3_0.pdf>

Roleigh Martins' 'Phenomenal Year 2000 Links':
<http://ourworld.compuserve.com/homepages/roleigh_martin/y2klinks.htm>

** On health systems **
US Food and Drug Administration:
<http://www.fda.gov/cdrh/yr2000/year200.html>

Year 2000 Biomedical Engineering Database (New South Wales Department
of Health, Australia):
<http:www.y2k.gov.au/biomed/index.html>

Healthcare's Year 2000 Information Clearinghouse:
<http://www.rx2000.org/>http://www.rx2000.org>

** On risk assessment**
'Probabilities of Year 2000 Damages'
by Capers Jones
<http://www.year2000.com/archive/proby2k.html>

'Year 2000 Contingency Planning for Municipal Governments'
By Capers Jones
<http://www.angelfire.com/mn/inforest/capersj989.html>

'Year 2000 Risk Assessment and Planning for Individuals':
<http://www.gartner11.garnerweb.com/public/static/home/00073955.html>

'Testimony before the U.S. House of Representative, Committee on
Science', James L. Cassell, Group Vice President, Director of
Research, GartnerGroup,
November 4, 1998.
[This paper discusses the readiness of countries across Asia and Africa]

**Tool kits**
Y2K Starter Kit:
<http://www.cinderella.co.za/>

Y2K PANEL DISCUSSION (Nov. 15-21, 1998)

The discussion on the impact of the Y2K problem or Millennium Bug on
developing countries was continued. A more detailed summary of the Y2K
discussion and the main findings and conclusion will be posted on GKD
in the week around November 30.

The World Bank posted a message on its efforts to support developing
countries to address the Y2K problem. Through its Information for
Development Program (infoDev) Initiative about 20 international
awareness-raising seminars have been organized since June 1998. There
is also a grant program, to which about 50 countries have applied. In
addition, infoDev has developed a Y2K toolkit.

A member submitted a recent trend monitor bulletin, based on content
analysis of major newspapers and reports. Recently, reports are
starting to appear saying that already hard-pressed Y2K remediation
budgets are being cut back because of falling revenues resulting from
the global economic crisis. Meanwhile, many companies in the United
States are characterized as hiding problems in their Y2K programs
because of fears of how such knowledge would affect their stock
prices, not to mention the confidence of their customers and their
suppliers. Another impediment to sharing knowledge about Y2K is that
companies are being strongly advised by their lawyers to keep their
experience of Y2K remediation projects confidential so as not to
expose themselves to lawsuits. In the USA and the United Kingdom,
where preparations are among the furthest advanced, even in the areas
of basic infrastructural services -- such as water and electricity --
there is no certainty that continuity of service will be possible,
especially considering the incidence of software project delays and
the ubiquity of embedded processors which regulate time dependent
functions. Reports from within the oil industry emphasize the enormity
and complexity of the problems faced, especially in terms of finding,
replacing and testing of an almost uncountable number of embedded
processors. Financial institutions are among the furthest advanced in
Y2K remediation and contingency planning in the USA and the UK. In
Europe because of the emphasis on the Euro conversion, financial
institutions are lagging far behind their USA and UK competitors.
Indeed in some circles, Y2K compliance is beginning to be seen as a
major strategic advantage in an industry in which rapid consolidation
has become a grim necessity. Content analysis suggests that
Continental Europe is between a year and 18 months behind the USA and
six months to a year behind the UK, both in terms of Y2K public
awareness and remedial action. Japan, China and East Asia are seen as
being more than two years behind. In these countries, the importance
of contingency planning will soon be greater than trying to fix the
computer trouble. The upside, though, is that they will be able to
save on the astronomical costs reprogramming computers and replacing
chips.

The Internet Society's (ISOC) "Internet and the Millennium Problem
(2000)" Working Group has made an inventory of the important Internet
protocols directly related to the Internet, and their most popular
implementations with respect to the millennium problem. Conclusion is
that by and large the Internet will not be affected by the bug. The
Working Group's web pages can be found at
<http://www.ietf.org/html.charters/2000-charter.html>.

GKD members agreed that the main impact of the Millennium bug will be
through so-called embedded systems. Embedded systems are
microprocessor-based systems whose software are written in assembly
language and are burned in ROM soldered in circuit boards (and thus
are extremely difficult to modify). One can find embedded systems in
electronic products ranging from mainframes to microwaves. GKD members
mentioned different estimates of affected systems.

A member posted a revealing Y2K compliance assessment of major
companies in different sectors. Of the manufacturing, laboratory and
facility systems of a pharmaceutical company with global operations in
39 countries, 18% of the more than 4000 items that were analyzed were
found to be non-compliant and 17% would cause a plant shutdown or
would affect production. Without any remediation at all, total plant
failure is a very good bet. It was estimated that seven out of nine
manufacturing lines would stop running within the first 3-4 days, and
the network and telecommunications equipment wouldn't work. Security
systems would admit anyone with any credit card and the in-plant power
substation would fail along with municipal water. For a major beverage
company, with global operations that include 47 plants in 21
countries, it was found that 24% were non-compliant systems and 28% of
them would affect production. The inventory and assessment took 20
weeks and cost $893,000. Time to fix was estimated at 35 weeks and the
cost at $2.9 million. The evaluation also showed that the single most
important thing that can make a year 2000 project successful is the
degree to which executive management is involved. The projected risk
levels for failure of all the units of these companies was between 60%
and 90% if the non-IT parts of the business were not found and fixed.

Many GKD members expressed concerns that the discussion should focus
less on the millennium bomb problem itself and more on the fallout:
the financial and economic consequences. In the Philippines,
government efforts are confined solely to the technical issues, with
hardly any discussion (or perhaps they are confidential) of the need
to protect us from the financial fallout. A national Y2K Commission
estimates the total conversion costs at P270 billion (more than $6
billion), which is roughly half of the national budget or 8% of the
GNP.

A member from Papua New Guinea said that its Treasury and Planning
Department had been working hard over the last 3 or 4 years to get the
government's finance systems Y2K compliant. In other sectors there are
still many problems. Like many developing countries Papua New Guinea
dependents on outside financial assistance through loans and aid and
is also part of the world trading community (as a primary, mineral and
other resource producer). This means that problems in other countries
are going to affect the country.  The GKD member suggested that
developing countries should be given a three-year (1999-2001) interest
free period on loans to tide them over the inevitable Y2K fallout.

Many GKD subscribers agreed with panelist Roberto Verzola who
emphasized that the millennium bomb is the latest symptom of a
deeply-flawed paradigm that is based on globalization and gain
maximization. 'Humanity needs a wake-up call badly. Because it will
occur more or less simultaneously throughout the world and will lead
to major social disruptions, the millennium bomb provides this wake-up
call. Already, one of its positive impacts is that it is leading some
communities to change their paradigm radically--towards survival,
sufficiency and sustainability.'

The Moderators posted two articles on Y2K compliance in India. India,
with its enormous information technology (IT) resources, can be a
catalyst in helping the world mitigate the impact of the Y2K crisis,
says G.K. Jayaram, chairman of Transformation Systems, an
international information technology consulting firm with centers in
Chennai and Dubai. 'The United States and Europe do not have adequate
engineering resources to solve the Y2K crisis. For that reason, India
becomes a crucially important country to satisfy the world's Y2K human
resource needs.' India produces about 50,000 computer science
engineers each year, nearly twice the number that the USA produces and
has played a key role in addressing the worldwide resource crunch.
Jayaram said it was imperative that nations that are best prepared and
have the most resources, assist those that face the most acute
problems in terms of Y2K readiness. 'What we need, is the equivalent
of a Y2K Technology Marshall Plan', he concluded. A second article
from the Indian Economist indicated that almost half of the commercial
banks in India had reached Y2K compliance by the end of September
1998.  The Indian central bank offers Y2K certificates.

The next Y2K Action Day is on November 27, 1998.

InfoTech 2000 of infoTech Systems Ltd. in Uganda has set up a pro-active
non-profit making initiative to turn information into a knowledge base for
Y2K management in Uganda. They are publishing CountDown 2000 as a quarterly
publication about the millennium problem in Uganda CountDown 2000 will
circulate to all IT managers and senior management of the private and
public sector in Uganda and in the East African and Great lakes region. 


Y2K RESOURCES

** Articles and Books **
On embedded systems
<http://gartner11.gartnerweb.com/public/static/aboutgg/pressrel/testimony109
8.html>

"Millennium Bug Devises New Pests for Africa's Optimists"
<http://www.sddt.com/files/librarywire/98/11/17/fa.html>
[an AP report dated November 17, posted at San Diego Source on Y2K and
fears regarding the South African health care system]
     
"South Africa Retailers Fear Consumer Chaos at Millenium"
<http://cnn.com/WORLD/africa/9811/18/BC-SAFRICA-MILLENNIUM.reut/index.html>
[a Reuters reported posted at CNN Interactive - discusses the
potential for panic caused by Y2K speculation and fears.]

"Time Bomb 2000!"
by Ed & Jennifer Yourdon
<http://www.yourdon.com>


** Listservs **
The World Bank is hosting three Y2K discussion lists (one in English, one
in French and one in Spanish); you can subscribe at the following URLs: 

<http://lyris.bellanet.org/scripts/lyris.pl?enter=y2kinfodev-eng-cl&text_mode>
[English]

<http://lyris.bellanet.org/scripts/lyris.pl?enter=y2kinfodev-fr-cl&text_mode>
[francais]

<http://lyris.bellanet.org/scripts/lyris.pl?enter=y2kinfodev-cl&text_mode> 
[espanol]


** Tool Kit **
The World Bank infoDev Tool Kit provides a resource to governments for
understanding the implications of the Year 2000 problem, for assessing
the risks and possible strategies for managing the risk, and for
supporting potential government action, including development of a
national plan, and establishing a Year 2000 organization. The Tool Kit
also provides resources for conducting inventories, risk assessments,
contingency planning, vendor management, check lists and references to
other relevant sources of information. The Tool Kit is available on
the World Bank's website: <http://www.worldbank.org/infodev/y2k>.

** Web Sites **
Countdown 2000 Uganda:
<http://www.infotechug.com/countdown2k.html>

Sangers Review of Y2K News Reports:
<http://www.cruxnet.com/~sanger/y2k>

Y2K Trend Monitor:
<http://www.trendmon.demon.co.uk>

Year 2000 Information Center:
<http://www.year2000.com>

World Bank Y2K infoDev:
<http://www.worldbank.org/infodev/y2k>