The Boston Sunday Globe
Focus Section (Commentary and Analysis)
September 19, 1999
Pg. C1 & C5
 

Year 2000
With 103 days to go, many are not ready
By MARK K. ANDERSON

It's bad diplomacy to name names, but sometimes it's also bad policy not to. This month, the federal government has begun to get painfully specific about which countries they think might have serious difficulties with the Year 2000 computer problem.

Last week, for example, the State Department issued its most detailed list yet about which countries have fallen short in Y2K preparations, and thus are likely to have problems ranging from utility outages to health care delivery problems.  The Federal Aviation Administration and the Department of Transportation are following suit with release of their appraisal of airport and airline safety worldwide after Jan. 1.

About half the 161 countries around the world are at a medium to high risk of experiencing Y2K failures in their telecommunications, energy, and/or transportation infrastructures, according to US Inspector General Jacquelyn L. Williams-Bridgers.  "The global community is likely to experience varying degrees of Y2K-related failures in every sector, in every region and at every economic level," she testified recently.  Many countries are well aware of the problem.  South Africa's Auditor General Henri Kluever on Aug. 25 warned his country's Parliament that for South Africa, Y2K will spell "big trouble, to put it mildly."

"Various countries in South America, Africa, Asia, and even parts of Europe are clearly unprepared for Y2K," US Senator Christopher Dodd of Connecticut, vice chairman of the Senate's Year 2000 committee, told the National Press Club 10 days ago.  "And many more have much to accomplish in the remaining 115 days or so."

Last week, Dodd was more pointed: "China is a worry, Japan is a worry, Russia is a worry, Italy is a worry . . .. But many of these countries now are moving more aggressively and catching up."

Whichever Y2K predictions or authorities one finds most credible, the upshot is clear: Y2K could be the biggest unexpected variable in international relations and global finance since the Asian economic flu.

And of the policymakers, businesspeople, Y2K specialists, and military strategists to consider the issue, the Pentagon's planners and forecasters have probably done the most comprehensive job in taking Y2K forecasting to its logical conclusions.

This month saw the release of the Newport, R.I.-based Naval War College's Year 2000 International Security Dimension Project Report.  Spearheaded by Vice Admiral Arthur K. Cebrowski and supervised by War College senior strategic researcher Thomas P.M. Barnett, the report paints as detailed a picture of the global implications of Y2K as anything yet published.

Their effort is not to be confused with the report last month by a different branch of the Navy that sparked near-panic with its dire warnings of utility outages.  That report was quickly pulled from the Navy's Web site and revised.

Barnett, author of the new Navy War College report, says, "Y2K is like a deadline for a big test on who's got their stuff together in the new global, information technology-driven economy.  Now the question is, who's giving the test?  Who's taking the test?  And who's going to get [perturbed] at the grades?"

As Barnett and his colleagues—nearly 100 specialists, thinkers, and planners from the technological, financial, security, political, and military sectors—found, the answers prove to be both tougher and more nuanced than the straightforward questions might suggest.

For example, rather than view potential Y2K problems as a single incident that will happen on New Year's Day or thereabouts, they believe a more likely scenario is one of gradually unfolding consequences and aftershocks that could propagate into 2001 or 2002.

In short, do not expect the "Big Bang" theory as applied to the new millennium; it's likely to be a more drawn-out affair.

But look for the Y2K aftershocks to affect world finances and politics.  Barnett and his experts envision the potential for something they term a new "Global Rule Set."

That is, if Y2K hits hard enough in enough corners of the globe, the report suggests that it could force global scrutiny on the new economy in a way similar to what happened at the end of World War II, which ended the isolationism of the 1930s and begat the United Nations, the International Monetary Fund, and the World Bank—the modern foundations of global politics and economics today.

"Naturally, the United States is not particularly enamored with the call for a new Global Rule Set," the report states, "for it is doing quite nicely in the current set, and most of the calls for new rules typically center on placing restrictions on the free flow of international capital, something the US does not wish to see for reasons of its obvious economic success over the course of the 1990s."

The report continues: "In the end, if Y2K proves to be an historical turning point between one era and the next, it won't be because of what Y2K is, but because of what it told us about the status quo and the need for change.  In short, its not what Y2K destroys that will be important but what it illuminates."

What, exactly, would it all mean for the world economy?  On that, the War College experts produced few specifics.

The potential scope of Y2K problems will largely depend on how quickly events unfold after 1/l/2000.  To measure the possibilities, Barnett and Cebrowski developed meteorological analogies that took into account both the robustness of a country's infrastructure systems and the incidence and duration of Y2K events.

From best-case to worst-case scenarios, the four onset models are tornadoes (robust systems, discrete and episodic events), floods (robust systems, widespread and sustained events), hurricanes (vulnerable systems, discrete and episodic events), and ice storms (vulnerable systems, widespread and sustained events).  Using such known events makes it easier for planners to grapple with potential Y2K problems, said Barnett.

Perhaps the report’s most valuable contribution is its consideration of the long-term aftershocks that Y2K could bring.  Don't expect the problems to be gone by the time the New Year's Eve snow melts, they caution.

That view is echoed by the private sector.  For example, the Gartner Group, a Connecticut-based consulting firm, has concluded that only 10 percent of all Y2K-related failures will happen within the 10 days on either side of.  1/l/2000.  Indeed, the Gartner Group estimates that Y2K problems will stretch out over the entire year and a few will not surface until 2001.

So Barnett argues that, to be most effective, government and business leaders should concentrate their efforts on the preparations that lead up to Jan. l, and on the long-term fixing projects that will arise after Y2K’s immediate effect is known.  But they will be the least effective—and stand to do the most harm—if they try too hard to intervene during the crucial first couple of weeks of the new year.  It's best instead, the report suggests, to ride out the wave.

"Too many decision-makers in positions of authority will, in their concern for maintaining control over what we perceive will be a largely uncontrollable situation surrounding the millennial date change event, squander precious resources that should be held in reserve for the failures yet to come," predicts the report.

"Our underlying philosophy in all of this advice," the report cautions, "is that people in general respond quite well during disasters or crises, but that the panic potential beforehand and the battle fatigue danger afterwards are far more important management points than the actual threshold event."

Stemming the panic—or what they term "iatrogenic"—potential of Y2K is perhaps the key element for handling any crises to come.  The trick, says Barnett, is to face the issue head-on, openly examining every aspect of the technical challenges the turn of the next millennium may bring.

Mark K. Anderson is a writer based in Northampton
 

Sidebar
State Department warning on global Y2K preparedness

Here are excepts from the State Department’s warnings to US citizens about possible Year 2000 computer failures around the world:

•  BAHRAIN:  “Role as the financial hub of the region has made many of its systems heavily computer reliant. …Moderate risk of potential disruption of electric power and water sources.”

• BELARUS:  “Does not appear to be prepared to deal with theY2K problem…Americans who are planning to remain in Belarus should be prepared to withstand power, water, and heat outages during cold winter weather that can last several days or more.”

• BRAZIL:  “Risk for potentially moderate but largely isolated disruptions in telecommunications, electricity, the health sector, and possibly financial services."

• CHINA:  “May be a risk of potential disruption in the key sectors of banking and finance, telecommunications, medical services, and in electrical power and infrastructure systems outside of the coastal cities.”

• CUBA:  “Moderate risk of potential disruption in such key sectors as banking and finance, telecommunications, and electric power.  Public services are not reliable, and the Cuban population is accustomed to doing without key services.”

• INDIA:  “Largest question is the readiness of the electric power sector and the ocean ports, parts of which have been slow to address the Y2K issue.”

• ISRAEL:  “Moderate risk of potential disruption in key sectors, including telecommunications and electric power….Ground stations for mobile communications may be vulnerable to Y2K-related disruptions.”

• ITALY:  “Will lower the risks of potential Y2K disruptions with greater progress in remediation and contingency planning, particularly in the fields of health care, telecommunications and, to a lesser extent, transportation.”

• RUSSIA:  “Disruptions are likely to occur in the key sectors of electrical power, heat, telecommunications, transportation, and financial and emergency services.”

• SAUDI ARABIA:  “Moderate risk of potential disruption in the telecommunications, banking and finance, and electric power sectors.”

• TAIWAN:  “All ATM machines in Taiwan may be shut down for 36 hours, beginning early on December 31st.

ASSOCIATED PRESS