Asian SMEs Warned Over Y2K : LUSENET : TimeBomb 2000 (Y2000) : One Thread

This is for cpr and all the other polly's that do not understand this statement: "a critical part of the world's supply-chain economy".

I like this quote from the GAO the best:

"Even if we were to miraculously fix every one of these domestic issues and make certain all U.S. companies and government agencies will get themselves Year 2000 compliant before 2000, the absolute largest risk to the U.S. and to U.S. citizens is the impact from companies and governments outside the U.S. Far too many companies and governments critical to our continued strong economy, and providers of key resources, are more than 30 months behind private industry in the U.S. Since it takes an average of 30 months for a midsize company to achieve compliance of their most critical systems, many of these lagging foreign companies and governments will simply not have enough time to get their systems fixed before 2000. Failures will lead to a negative impact on our economy and availability of critical resources. We'll see significant impact from failures in these regions, including economic, sociopolitical, investment shifts, market changes, critical resources, national security, and defaults on federal loans. The only way now to combat this enormous issue, is for the U.S. Government to launch significant foreign contingency strategies in order to reduce or negate high risk dependencies on these industries and countries before we begin to feel these ill-effects. Since failures will increase in numbers throughout 1999, increase in volume throughout 2000, and continue at reduced levels throughout 2001, the time to act on this is now."

By Nophakhun Limsamarnphun, The Nation.

A US government expert on Y2K has issued a strong warning to small and medium business enterprises (SMEs) in Thailand and elsewhere - a critical part of the world's supply-chain economy -- to step up their efforts to address the millennium bug if they do not want to suffer when entering the year 2000.

With about six-and-a-half months left before the start of the new millennium, Jerome Jackson, a senior program manager attached to the US Department of Commerce, said from Washington on the US Worldnet Dialog television program that while the US does not "feel responsible" in fixing the Y2K problem in other countries, the nature of deep cross-country interdependency in this issue leads it to, at least, "alarm" other countries.

The alarm bell is especially ringing for SMEs, which are at various levels of addressing the problem in different countries.

Thailand is now in Group 2 of countries in terms of preparedness, upgraded in March from Group 3. Group 1 of countries are those most prepared for Y2K.

The two digits in many computers worldwide have to be corrected to recognise the start of year 2000, or else the computers may malfunction.

Jackson said not only in Asia, even in the US, some 80 percent of the SMEs have Y2K problems and only 50 percent of them have taken action to address it. This leads up to about 30,000 US enterprises.

Jackson said the business disputes which may arise out of the Y2K problem will involve an estimated combined US$1 trillion potential loss due to the deep interdependency of businesses in the supply-chain economy.

Under the US Y2K Disclosure Act, enacted last October, liability is however limited if there is disclosure of the Y2K status in good faith so that the domino effect that can topple business partners and related parties are minimized.

Asked if the US government has any contingency plan beyond its national responsibility, he said so far the efforts have been participation in international conferences to create awareness of the issue. In addition, CD-ROMs in nine foreign languages have been distributed free of charge to businesses worldwide.

At the last Asia-Pacific Economic Cooperation (APEC) meeting, member countries also joined hands to promote self-help tools and solve the problem.

He said a business plan will be needed for enterprises to anticipate problems such as when power fails, what has to be done, how the enterprise will be affected and how business partners will be affected.

In response to a question from a Thai bank executive on the prospect of public panic in which people will be worried and turn to keeping cash at home, thus causing a mini-run, Jackson said US banks and other financial institutions are among organisations that have shown excellent efforts in addressing the millennium bug so a widespread and prolonged problem is not expected.

He said consumers don't have to worry about withdrawing money from banks in case of Y2K problems and added the strategy is to instill in public minds that financial institutions will be in good health and banks will automate on Monday morning (after Dec 31, 1999).

Jackson compared the situation to be almost like preparing for a major storm for the first two weeks of year 2000.

"Talk to the public to resolve the fear," he said, adding that people should be encouraged to ask questions.

However, there will still be a certain amount of fear despite a lot of information and knowledge, looking at the results of The Washington Post's latest survey on this issue among residents of the US capital.

The US government is, meanwhile, preparing a summer public campaign to create more grassroots awareness and understanding among local communities nationwide to further reduce the fear.

Banks and financial services, communications, education, power, food supplies, transport, oil and gas are among the critical sectors for Y2K corrections.

-- y2k dave (, June 22, 1999

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