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Copyright 1998 Asia Pulse Pte Limited
ASIA PULSE
July 16, 1998
SECTION: Nationwide Financial News
LENGTH: 519 words
HEADLINE: ANALYSIS - JAPAN DISQUIETINGLY QUIET ON YEAR 2000 PROBLEM
DATELINE: LOS ANGELES, July 16
BODY:
The drums are beating loud worldwide about the Year 2000 Problem, except in Japan, where there is an eerie silence on this potentially devastating computer software glitch.

The new millennium is now some 500 days away. Japan's financial industry is behind in the effort to fix their computer systems, and while financial institutions are supposed to report on the progress they are making, little information is forthcoming here. That has experts in the U.S. and Europe very worried, imagining that, like with Japanese banking system's bad loan problem, the situation is so severe that nobody dares even talk about it.

Until the clock strikes, no one can be sure how bad the situation will be when computers must deal with dates involving the year 2000. But modern networked society is vulnerable to a chain reaction as computers spread the damage among themselves. It could be a crisis situation similar to the oil shocks of the 1970s and could trigger a global recession.

The same information technology which created the "new economy" is now putting a drag on the global economy. The worldwide cost of fixing computer programs to deal with the Millennium Bug is estimated at US$ 600 billion. The major corporations of Europe and the U.S. are currently spending 30% of their information technology investments just to protect against Y2K damage.

Meanwhile, there is also a severe shortage of programmers who can fix all the programs that need to be fixed in time. Most of these programs were written years ago in COBOL, an old computer language in which the current generation of programmers is not fluent. The U.S. alone is said to have a shortage of 70,000 engineers to deal with domestic needs. Over 200 claims have already been filed in the U.S., and the total cost of reparations could exceed US$ 1 trillion.

The activity in the U.S. makes the silence in Japan all the more isquieting. The problem must be huge, "but in Japan the topic is taboo," explained Nobuo Mii, an ex-vice president of IBM Corp., now living in the U.S.

Part of the reason is that it is unclear who should take responsibility for fixing all the programs. Japan's computer makers bundled in software to promote their machines, so ownership of the programs is vague, as is the question of who should shoulder the huge burden of cost.

Another problem is that corporations have been slipshod about managing the operation of their programs, often passing the job off to subcontractors. Thus, managers are quick to assume "everything's OK" even when they have no clue. "It's unfortunate, but the Americans do not believe it when Japan says everything's OK," explained Mii.

But who can blame them? Tour operators kept saying everything was OK right up to the day of the World Cup game in France, when many Japanese travelers found they had no tickets to the match. One U.S. company tested the programs of a leading Japanese electronics maker and discovered a string of Millennium bugs. The Y2K problem is a global problem, so Japan should not bury its bad news.

(Nikkei)

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