-Caveat Lector- Date: Saturday, December 26, 1998 3:39 PM Subject: Y2k and Asia > >http://www.theaustralian.com.au/world/foc1226a.htm > >When the chips are down > >Anxious pundits predict the Y2K bug will trigger a second >economic meltdown in the region, writes PETER ALFORD. > > >IMAGINE that in 12 months, just as the battered East Asian economies >begin to right themselves, they are knocked over again by a second >recession. > >Suppose China stops being a regional sheet anchor and is engulfed by >the new emergency. Think about the social chaos in Indonesia today and >then picture that kind of havoc breaking out elsewhere as >impoverishment sweeps across the region for the second time in three >years. > >Imagine, finally, that the storm waves from this next Asian crisis >don't lap relatively harmlessly on Australia's shore but break over us >with full force. This, rather than the millennialist panic stories >about planes falling from the skies and electricity grids collapsing, >is the kind of scenario that keeps year 2000 experts awake at night. > >East Asia, a region with more than one-third of the world's >population, one-quarter of its manufacturing capacity � and, to be >selfish about it, most of Australia's markets � is uniquely exposed to >the millennium bug. All the region's developed and semi-developed >countries, except Singapore, are running at least six months behind >Australia and the handful of other leading countries in Y2K >preparedness. With barely 12 months to run to the critical date � plus >the fact Y2K problems will start snowballing from midyear as >computerised systems begin routinely looking into the 1999-2000 >financial year � that could prove to be a fatal gap. > >We've had fair warning of the ramifications, says Phil Dodd. The 1997 >Asian currency crisis, which has cascaded into emerging economies >everywhere and at one point drove the Australian dollar down to US55c >for no apparent reason except proximity, illustrates the hazards of >worldwide interconnectedness. > >What we face is much more dangerous, says Dodd, who heads the Unisys >Asia-Pacific year 2000 project. Left uncorrected, the elementary but >incredibly pervasive programming glitch that is the Y2K bug will >affect not just capital flows but banking systems, physical trade, >information transfers, energy supplies and transport. > >"To me, the currency crisis is a precursor, a warning," he says. "It's >the tremor before the earthquake." > >The East Asian problem has two sets of ramifications for Australia. In >the short run, Y2K-related breakdowns in Asian hub cities could >disrupt telecommunications links, air transport and shipping. These >problems might take several months to overcome. > >In the long run, the really worrying prospect is that cascading Y2K >breakdowns in banking systems, communications, electricity and other >utilities will plunge the region into a second recession � a recession >that may be worse than the current one. > >The economic crisis in Indonesia, South Korea, Thailand, Malaysia, The >Philippines, even Hong Kong, is one reason East Asia is so exposed to >the bug. > >Engrossed by week-to-week survival during the past 18 months, most >industries and governments, until about six months ago, had given only >distracted attention to Y2K rectification. > >China's approach is similarly under-developed and even Taiwan, with >its sophisticated information technology industries, is in poor shape. > >Japan, the second largest and second most technically advanced >economy, is especially worrying: "Large parts of corporate Japan, >including the banks, still seem to be in denial," says one analyst. > >Y2K programs are the only technology expenditures that have been >maintained throughout the region during the Asian recession, says >Gartner Group's Hong Kong research director Joe Sweeney, but they were >belated and badly under-funded at the outset. > >Gartner's next status report on international Y2K preparedness will >show every economically significant East Asian country except >Singapore still in what Sweeney describes as "the danger zone". > >Gartner, a Connecticut-based consultancy that has been a leader in >raising Y2K awareness, has identified a new hazard: the "Y2K speed >bump". > >Sweeney says there is clear evidence most customers in developed >countries, recognising East Asia's dangerous unpreparedness, are >planning to order extra goods and materials next year as several >months' buffer against supply failures in early 2000. > >"Asian suppliers are going to see all their orders take off, they're >going to think the recession is over and then they're going to run >into two or three months when there are no orders at all � that's >where their businesses are going to fail," says Sweeney. > >"The Y2K speed bump has nothing to do with technology, really; it is >the way economies work. And it's definitely going to happen." > >Dodd also strongly makes the point that Y2K is fundamentally a >business problem, with significant ramifications for the international >economy. He is astounded that, at this late stage, few governments or >economists seem to have addressed the problem at this level. > >"Some ministers like [Australia's Finance Minister] John Fahey or Leo >Moggie in Malaysia understand this very well but, generally, >governments and economic forecasters just don't get it," he says. > >Recently Dodd grouped Australia's main trading partners in terms of >preparedness. His "red-light group", those with a 70 per cent to 100 >per cent chance of serious failures during the Y2K transition period, >include South Korea, China, Hong Kong, Taiwan and Indonesia. In >1997-98, "red light" countries bought $53 billion of Australian >exports � 60 per cent of the total. Dodd rates Japan, which takes 20 >per cent of Australia's exports, as having a 30 per cent to 70 per >cent prospect of failure. The threat to our markets is stark. > >An East Asian hazard that is even less quantifiable but equally >serious is the threat of social breakdown if these countries fall back >into recession in 2000. > >The US Central Intelligence Agency has identified this risk and the >head of its Y2K analysis team, Sherry Burns, says the agency is making >preparations for "social, economic and political tumult" resulting >from technology breakdowns in societies weakened by recession. > >Indonesia, which is racked by communal and political violence and >which admits many of its Y2K compliance programs will not succeed, is >in the most obvious danger. "We can't just let Indonesia go," says >Sweeney. "Two hundred million people is too many to ignore. Let's say >they have power outages and bank problems � there will be waves of >riots, again aimed at the minority groups." > >With 12 months to go until January 1, 2000, the experts say it is too >late for businesses and government agencies to start Y2K compliance >programs. > > >------------------------------------------------------------------------ > > >MANAGERS who find themselves in this position have no choice but to >adopt the triage approach. Like doctors in battlefields, where this >term originated, they must save what can be saved and let the rest go. >That will involve concentrating on making compliant only the >computerised systems of businesses, utilities and government agencies >that are critical to continued operations. Contingency planning for >the rest of their systems will focus on ensuring they can be manually >operated. > >This is the best and probably only hope for the developing East Asian >countries, where even large-scale banking, transport and energy >systems have a higher capacity for manual operation and fewer "mission >critical" automated systems than in the West. > >In "going to manual", Asian countries will temporarily restore >hundreds and thousands, maybe even millions, of jobs made redundant >during the past 20 years by the march of technology. If there is to be >a Y2K recession in East Asia, it may well be the first downturn in >history that creates work rather than destroys it. > >Peter Alford is The Australian's South-East Asia correspondent. > > DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance�not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. That being said, CTRL gives no endorsement to the validity of posts, and always suggests to readers; be wary of what you read. CTRL gives no credeence to Holocaust denial and nazi's need not apply. Let us please be civil and as always, Caveat Lector. ======================================================================== To subscribe to Conspiracy Theory Research List[CTRL] send email: SUBSCRIBE CTRL [to:] [EMAIL PROTECTED] To UNsubscribe to Conspiracy Theory Research List[CTRL] send email: SIGNOFF CTRL [to:] [EMAIL PROTECTED] Om
