How Some Nations Prepared for Y2K

Updated 3:24 PM ET December 29, 1999

By FRANK BAJAK, Associated Press Writer

The Year 2000 computer problem, the product of a programming flaw, is widely dubbed humankind's biggest technological blunder ever.

Analysts say that months of hard remediation work, with an estimated half-trillion dollars spent worldwide, will prevent any major cybermeltdowns. They've debunked the myths that Y2K could make planes fall out the sky or accidentally trigger nuclear missile firings. But some serious disruptions are expected.

The World Bank-funded International Y2K Cooperation Center says the so-called Y2K bug poses the greatest risk in developing countries, where the center anticipates the most serious failures in health, hospitals and government services. It says large-scale technical and humanitarian relief efforts may be necessary.

"The world has never experienced an event so ubiquitous and simultaneous," the center said in its final report this month.

The legacy of computer systems and microcircuits programmed to express years in just two digits, Y2K has already caused crashes and corrupted data in untreated systems, where the year 2000 is misinterpreted as 1900 when the date rolls over to Jan. 1, 2000.

Actions taken to prevent the bug from wreaking havoc have varied widely from country to country.

Industrialized nations have invested the most by far in Y2K fixes but also are more susceptible to disruptions because of widespread automation. Developing countries are less dependent on technology but do have computers running many crucial services - from telecommunications to power grids.

The most serious economic damage is expected in countries - generally in Asia and Latin America - with highly developed information infrastructures and a relatively high incidence of pirated software, and which were hit in 1998 by financial crises from which they have yet to recover.

Here is a look at some countries' Y2K status:

WESTERN EUROPE:

BRITAIN

A leader in Y2K vigilance and proselytizing, the British are in the bug-swatting vanguard. Action 2000, the government agency created to deal with Y2K, monitored compliance work on everything from electricity, water and gas utilities to police and fire departments, banks and groceries.

Y2K work on infrastructure alone cost more than $32 billion in both public and private funds. No figures are available for other Y2K-related investments.

Some sector examples: Action 2000 certifies that grocers will be able to provide adequate supplies during the critical hours and days. Independent consultants conducted detailed reviews of representative end-to-end supply chains for bread, milk, pork, carrots, breakfast cereal and toilet paper. With bread, for example, they traced grain from wheat fields in Canada to retail shelves in Britain as packaged bread to identify any Y2K vulnerabilities along the way.

The government says supplies of oil, gas and coal will be adequate and that transportation is also Y2K-ready. Action 2000 says 99 percent of Britain's biggest 500 companies and 93 percent of companies with more than 250 employees are rated "on course/complete" in preparations. Some smaller companies are of concern. The agency estimates 84 percent of firms with 10-249 employees and 85 percent of firms with fewer than 10 employees have no easily identifiable internal Y2K risk.

GERMANY

After lagging behind other industrial nations in Y2K preparedness, techno-dense Germany stepped up efforts substantially this year, including a high-profile publicity campaign. The government estimates public and private sectors have spent a total of $83.8 billion detecting and fixing potential problems.

Y2K experts are less sanguine, worried particularly about some government agencies and small- and medium-sized businesses, where they say repairs began too late to be assured of no serious breakdowns. Just $2.1 billion of Y2K spending came from public funds.

Authorities do admit that some high-rise buildings could face problems with electronically controlled water pumps containing Y2K-sensitive microchips and that they cannot guarantee that all essential hospital equipment is bug-free.

Y2K specialist Klaus Brunnstein of Hamburg University expects sporadic power outages because while regional power grids have been tested and seem to work, the transferring of electricity amongst different grids has not been thoroughly tested.

Deutsche Telekom, Germany's biggest telecommunications company, says it's fully compliant, and the government says all its flight-control systems were compliant by September. The national railway, Deutsche Bahn, tested its trains this month and says all are Y2K-safe. Nonetheless, all trains and subways will stop in stations a few minutes before midnight as a precaution.

Banks are deemed in excellent shape but the government is nevertheless advising consumers to pay bills due in early January by the end of December and to keep detailed records.

A recent Institute of Economic Research survey found that just 1.8 percent of German companies have taken no precautions against Y2K.

ITALY

Far behind in purging its computers, experts say, and among the worst-prepared countries in the West. The consensus among information technology professionals: Italy should be focusing on how to cope with Y2K-related failures because it's too late for repair work in many sectors. Italy did not create a national Y2K committee until February, eight months to two years after most other developed nations.

The potential failure of everything from phones to street lights come Dec. 31 is worrisome given the half-million pilgrims expected in Rome for the New Year. City officials insist there will be little more than small, brief Y2K-triggered failures. Rome Y2K task force chief Mariella Gramaglia expects "little suspensions of electricity and brief interruptions of telephone service."

Even so, Prime Minister Massimo D'Alema has proposed making Dec. 31 a national holiday. Italy's post office says it will hand-sort all mail over the holidays in case of a breakdown. And the rail system will stop 240 trains just before midnight to test track systems for Y2K troubles.

The Vatican City, a ministate within Rome, appears more prepared with their computer systems, however the Vatican depends on Italy for crucial systems like water and electricity.

SPAIN

Though nobody promises no problems, the government and most major companies insist they are as ready as should be expected. There has been a notable lack of independent monitoring of Y2K compliance. The public is generally disinclined to worry.

The government reports spending $190 million on administrative systems but beyond a Web site little information was made available to the public. Experts expect some failures, nothing catastrophic.

Aviation authorities say critical airport and air traffic systems are ready and airports will have maximum staff on New Year's Eve. Flagship airline Iberia says it's fully prepared, having modified 12 percent of its 12 million lines of computer code to be compliant.

State-owned rail company RENFE says it's compliant after three years of work, though it will continue tests until the last moment - including on stationary trains around midnight Dec. 31.

Electric company Iberdrola reports compliance, as does telecommunications giant Telefonica, which boasts of a "one-of-a-kind" Y2K rollover test in the southeastern city of Murcia involving genuine, real-time traffic over an extensive region.

A possible cause for concern: water in some small towns where supply and treatment is managed directly by town councils or private companies and little information is available on Y2K compliance.

EASTERN EUROPE Authorities claim they are well prepared, but there are serious concerns about the power grid. Romania hopes that as a developing nation with not much of a computer infrastructure, it will be safer Y2K-wise than industrialized countries. But officials admit funds were insufficient to fix all computers identified as having problems.

The water distribution network is believed to be in good shape, although some high-rises could face problems with electric water pumps if there are power outages.

Emergency hospitals were assessed by World Bank-funded experts as Y2K-safe since their intensive care equipment is younger than 1996. The national phone company Romtelecom claims full compliance.

Planes and radar systems on the ground are ready, according to national airline Tarom. The rail transportation will fall back on non-automated systems if necessary, the transportation ministry said.

In banking, Romanians do not have current accounts as they are paid in cash and the central bank claims the national banking system is Y2K safe.

In industry, the companies that have addressed Y2K are usually joint-ventures with Western firms.

And in the government, social security records at least are not yet stored on computers.

RUSSIA

Experts expect widespread failures in vital public services. The most ominous trouble spots include Gazprom, the world's largest natural gas producer, and Unified Energy Systems, which controls Russia's electricity grid. Their systems are intertwined so a failure in one could affect the other.

Other possible weak points: an already failure-prone phone system and air traffic control, whose computers were said by a top aviation official to be only 50 percent ready in early December.

Officials insist nearly all sectors - government, banking, nuclear energy and missiles - are ready or will be in time. They also say Russia isn't nearly as technology dependent as much of the rest of the industrialized world. The abacus is still widely used to add up grocery bills and paper ledgers are used for wage payments. There are no paychecks.

The United States and Australia predict prolonged energy disruptions, with Washington offering a free trip home for U.S. Embassy employees over New Year's. Australia will pull out all but three of its 16 embassy staff from Moscow and has issued a general warning to Australians to avoid Russia.

Whatever the problems, it's possible the long-suffering Russians won't take much notice. As it is, many regions in eastern Russia are accustomed to going hours, sometimes days without power or heating.

ASIA

AUSTRALIA

Widely considered to be among the world's best-prepared nations. The government minister spearheading Y2K efforts, Richard Alston, anticipates "little or no Y2K disruption to key services, including electricity, telecommunications, banking and transport."

A government Year 2000 office was set up in 1997 to coordinate public compliance efforts and to advise the population and private sector. Industry watchdogs have given the country's telephone and emergency services the all-clear.

Despite the work, two commercial ports will close over New Year's because of fears that ships that come calling won't be complaint. Ansett, one of two domestic airlines, is halting flights for 13 hours prior to noon Jan. 1, citing lack of demand.

Federal and state governments have spent about $1.3 billion tackling the problem and business had spent $4.7 billion by the end of June, three quarters of the expected total bill, the Australian Bureau of Statistics reported.

In all, that's about $320 per person, meaning Y2K fixes will end up costing Australia about the same per capita as the United States' estimated $365.

CHINA

The government says banks, aviation and other critical sectors should experience few Y2K-related failures - but that readiness in other areas is mixed. International analysts consider that the government's lack of transparency could mean trouble ahead and is aimed at forestalling public panic.

There have been bank runs in remote areas of the south after credit cooperatives closed their doors to take part in checks of the national banking system's computers. Foreign companies complain that a lack of information - including the absence of written confirmation by government agencies that Y2K work has been done - has hampered efforts to ready their businesses.

The nation's Y2K work began in earnest only 13 months ago, forcing a focus on mission-critical systems. Some of the apparent success stories:

The banking sector, which handles deposits worth $1.2 trillion, conducted three tests and has ordered paper record-keeping as a backup. Air traffic control in major cities have tested emergency systems, winning the approval of foreign airlines and U.S. experts. A final nationwide test of the telecommunications network last month found all the corrected systems worked smoothly.

Beijing and Shanghai began verbally assuring foreign investors and embassies this month that heating, electricity and gas will not be disrupted. Yet some provincial cities may not fare well.

Even Zhang Qi, head of the government Y2K task force, acknowledges that remote areas, hospitals and businesses are unprepared.

JAPAN

Although he says in a television spot that authorities don't think the millennium bug will trigger major disruptions, Prime Minister Keizo Obuchi advises his countrymen to stock up on food, water and other necessities.

The government has ordered 96,000 soldiers on duty for New Year's and police patrols beefed up. It claims all major medical institutions are Y2K compliant but has stockpiled a half-year's supply of oil and printed an extra $330 billion worth of banknotes.

Despite government assurances that all is prepared, experts say Japan got started late on Y2K work and they are particularly worried about small- and medium-sized businesses. They note that Japan is among the world's most technologically dense nations. And the more computerized a nation is, the greater the chances of Y2K failures, even in those systems where remediation work has been done.

During the rollover, some 100,000 technicians from top Japanese electronic companies will camp out in their offices on standby. Japan's two largest airlines canceled 26 flights to Europe on New Year's Eve because of low demand, and the country's largest travel agency, JTB, refused to sell New Year's tours involving air travel because of concerns other nations are not sufficiently prepared.

The Japanese themselves are fairly calm. A Yomiuri newspaper poll found that only about 40 percent were concerned about Y2K problems or planned precautionary measures.

MALAYSIA

After a slow start due to the 1998 regional financial crisis, Malaysia is considered by experts to have caught up and gotten its critical sectors purged of the bug. It has minted extra money and built a high-tech Y2K fallout shelter as part of contingency planning.

Nearly $1 billion was spent by the public and private sector on Y2K work, the government's work bolstered by a $100 million World Bank loan.

Chris Morris, Asia-Pacific director for GartnerGroup technology consultants, now considers Malaysia along with Singapore and Hong Kong as among Asia's best-prepared nations.

Though Y2K officials say they expect only minor disruptions, top government officials will hunker down for five days beginning New Year's at a sleek, new million-dollar Y2K command center for a 'round-the-clock vigil. Military and police will be on hand to deal with any public safety or national security threats.

Though officials did not begin Y2K planning until mid-1997, the bug this year became a national priority in a nation trying to build a glittering Asian cyber-capital near its political seat of Kuala Lumpur.

AFRICA

KENYA

Because of insufficient generation capacity, most of Nairobi now undergoes scheduled power cuts averaging 18 hours a week. Telephone service is often out, so Kenyans frequently live in the very conditions that industrialized nations fear Y2K outages would create.

Civil Aviation director Chris Kuto says Kenya's air traffic equipment was noncompliant and had to be replaced. The agency was only just running a preparedness test in mid-December - extremely late by international standards.

The country's sole power company, Kenya Lighting and Power Co., says it was certified Y2K compliant in June by third-party auditors. But so many unscheduled power cuts occur normally in Kenya that it might be difficult to know whether any are actually due to Y2K.

Although many private banks have been certified compliant by third parties, they have no control over the telecommunications system, which is required for interbank transfers. Businesspeople say Nairobi's international telephone exchange is also not fully compliant. Bank ATM machines are already frequently unable to deliver money because of telecommunications outages.

NIGERIA

After years of brutal, corrupt dictatorship, cash-strapped Nigeria faces nearly impossible hurdles to reach compliance in time. One of the few west African countries with significant computerization, Nigeria all but ignored Y2K until civilian president Olusegun Obasanjo took office in May.

For a last-minute crusade, the government was only able to provide $1 million out of $200 million requested by the Y2K coordinating center. The official in charge of battling the bug, Pauline Tallen, says critical sectors have not been fully addressed, with much noncompliant, obsolete equipment around.

Official figures claim 88 percent compliance in telecommunications, 75 percent in transportation and 50 percent in government agencies. Senate hearings in October on the military's readiness showed a compliance rate of about 30 percent, with communications, weapons guidance systems and operating systems on tanks found to be particularly vulnerable to malfunction.

The state-owned power and telephone companies - both famed throughout the region for their atrocious service - say they are ready. But Nigerians are skeptical.

The oil industry is in good shape because it is managed by multinational companies with enormous resources. But the `downstream' oil sector, including refineries and power-generating plants, could face significant problems.

This country of 114 million people is accustomed, though, to the Herculean difficulties of simply getting by every day - from frequent power outages to lack of municipal water to horrific traffic jams and failed banks. So public reaction to Y2K failures may be muted.

SOUTH AFRICA

International analysts give South Africa good marks in readiness, particularly in banking, electricity, water, telecommunications, health services, transportation and emergency services.

The U.S. State Department even said the country is prepared for any refugee crisis that might arise due to Y2K problems in neighboring countries.

Nevertheless, all business will close Dec. 31 to Jan. 3, an extra two holidays designated as a precaution. The central bank plans to have an extra $5 billion in currency available to meet increased cash demands.

The national disaster management center has a $50 million emergency fund to attend to any crises and a special Y2K command center will have about a dozen people 24 hours a day from Dec. 31 through Jan. 4. A public phone-in line with five operators will be functioning.

Officials have been concerned about local authorities' preparedness but say municipalities are now 97 percent ready. Being ready means systems have been tested, contingency plans are in place and have also been tested.

All but four of the nation's 57 banks were certified compliant by the central Reserve Bank. The deficient banks were faulted on contingency planning and communication of readiness to the public.

All seven major South African ports will be closed to shipping for 12 hours during the rollover. South African Airways will fly all normal schedules, and its head, Coleman Andrews, plans to be airborne as a show of confidence when midnight strikes.

Health is the one sector that has lagged in readiness, and leave has been canceled for all senior staff at state health care facilities through January.

MIDDLE EAST

EGYPT

The government has organized seminars, workshops and training but most Egyptians are ignorant of Y2K. Government officials claim all areas under government control are ready, including electricity, water, energy, gas, telecommunications and aviation. There is cause for concern only in the health sector, where some equipment in intensive care units is not yet compliant.

Hospitals are using contingency planning - instead of programing the computers per year, they do so per week.

EgyptAir says all its computers are compliant but senior managers will be on duty New Year's Eve in case problems arise and no EgyptAir flights will be in the air at midnight on Dec. 31.

The private sector is less prepared and some hospitals and hotels could experience air-conditioning or elevator trouble, experts say. In the financial sector, Egypt is a more cash-based than electronic, so experts say it may not be as severely affected by the Y2K problem as Western countries.

Nevertheless, the Cairo and Alexandria stock exchanges will be on an emergency footing, with generators on hand in case of power failure and market information saved on diskettes.

U.S. Ambassador Daniel C. Kurtzer says he expects few Y2K-related disruptions, though the embassy is sending home staff with serious medical conditions.

ISRAEL

Power stations are already well into the year 2000 and government officials reassure people that Y2K will not cause major disruptions. But experts say glitches are likely on the local level.

Israel is universally considered among the countries best prepared for the bug, but Palestinian areas are far less prepared.

After updating the electric company's computers, technicians changed the internal dates and moved power stations into the next millennium already. Some are already working in July and August 2000 and won't notice the changeover on Jan. 1.

However, municipal systems might break down, especially in smaller localities where computers are outdated. A task force warned that water and sewage systems could crash and that city computers might erase records, including parking tickets.

Israel has closed its nuclear reactor "for a few days" to calm area residents who fear accidents, the government says, and will have 12,000 police deployed.

Rabbis object to plans by government agencies and businesses to have workers on duty Dec. 31 and Jan. 1, in case something goes awry. The changeover occurs on Friday night, the Jewish Sabbath, when special permits are required for Jews working in vital jobs.

The Bank of Israel is supplying additional cash to bank branches as the millennium approaches, in case Israelis decide to raid their ATMs for extra money. Banks will be closed for three days over the year-end changeover.

No problems are predicted at Israel's international airport, but it will be virtually shut down. Despite assurances, people aren't buying tickets for flights on New Year's Eve. Israel's national airline, El Al, does not fly on the Jewish Sabbath, so its planes will be grounded over the millennium weekend.

UNITED ARAB EMIRATES

Like much of the Persian Gulf, the UAE were slow to grasp the importance of Y2K preparations, then scrambled to catch up. But with most of the world's oil and gas reserves in the region, major oil companies put a big emphasis on compliance.

Everyone from oil and gas companies to public utilities and banks have in recent weeks declared themselves compliant.

"The Gulf is, on average, 18 months behind the developed world on the Y2K issue," said Ron Nelson, a Y2K analyst in Dubai who nevertheless praised the UAE for "a tremendous catch-up job" that tapped on U.S. and British expertise as well as the petroleum multinationals.

Authorities say the rollover has been simulated in electricity, water and customs departments, together with telecommunications.

Local banks were slow off the mark but are considered to have worked hard.

"Everyone involved is saying that they've made their systems as compliant as possible," Nelson said. "There will be some problems, but it's not because they haven't done anything."

LATIN AMERICA

BRAZIL

Despite a study by the technology consultants GartnerGroup placing Brazil among countries with the highest risk of Y2K-related problems, government officials insist everything is under control. The government's Y2K coordinator, Salon Lemos Pinto, says Brazil is "now almost fully compliant," having spent $800 million on upgrading software and hardware.

There has been no independent monitoring of public sector work in Latin America's most populous nation - and the outlook for Brazil's private sector appears grim.

Economist and lawyer Renato Opice Blum, who has been studying the problem for two years, predicts in a new book that one-third of all private businesses will grind to a halt because of Y2K failures.

Blum says dozens of municipalities are also at risk and notes that about 60 percent of software in Brazil is pirated. "They cannot be upgraded and thus are extremely susceptible to the bug."

The financial sector appears in good shape and energy and telecommunications have also undergone testing and claim full Y2K compliance.

For those who can't afford to address the problem, federally-run Banco do Brasil set up special credit lines to finance Y2K conversion work. Girding against possible bank runs, the central bank has auctioned off dollars and printed more reals.

VENEZUELA

Officials in Venezuela, one of the largest foreign suppliers of oil to the United States, say the country is well-prepared. But many Y2K experts say the government is deluding itself. GartnerGroup consultant Jim Cassell calls Venezuela "the poster boy of non-preparedness in Latin America."

He says electricity grids, telephones, customs services, air traffic control, ports and even the oil industry may suffer disruptions.

Venezuelan authorities hotly contest his assessment, saying it is based on outdated information and that despite a late start in addressing the problem the country has caught up. They insist that oil deliveries will continue uninterrupted.

All sides agree that Venezuela got a late start in tackling the bug. President Hugo Chavez, who took office in February, did not appoint a Y2K commission until April.

Experts agree that the state oil monopoly, Petroleos de Venezuela, the financial sector, multinational companies and other key sectors are well prepared. But the notoriously disorganized government, public utilities such as electricity and thousands of small- and medium-sized businesses are likely to have troubles, which could spill over into other sectors.

======================================= End

Ray

-- Ray (ray@totacc.com), December 29, 1999

Answers

Didn't see anything about France. But judging from the news headline on my isp's homepage "Government official says France set back to 19th century", I'll guess that the big Y2K question in France is:

"Butter, jam or both?" 'cause France is toast for certain.

Question is how many of her neighbors are going to be dragged down with her? Hell, the French might just envy the Italians after Y2K gets done wrecking what the weather didn't.

WW

-- Wildweasel (vtmldm@epix.net), December 29, 1999.