Because U.S. firms may not trade with Japanese firms that are not compliant in 2000, this could be a death blow to already strapped companies, Japan faces a major economic crisis in 2000. So says THE AUSTRALIAN (April 24).
This assumes that U.S. firms will be compliant, for which there is no evidence.
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ASIAN exporters who finally get their heads above water next year after the 1997-98 currency turmoil face an even graver threat: buyers in their biggest market, the US, may decide not to do business with them because of fears about the 2000 computer bug.
Loss of access to sales in the giant US market would be a death blow for some companies still struggling with the fallout of the downturn that began in July 1997.
Worse, the world's other hope as an engine of growth, Japan, may prove the biggest 2000 disaster of all: Japan's unwillingness or inability to confront the problem in time could send a shock wave through the global financial system. . . .
In contrast, experts say Japan is not tackling the problem seriously, prompting fears its financial system may suffer catastrophic failure in January 2000. No one knows exactly what a Japan unplugged from the rest of the world would mean to the global economy, but the predictions are dire. . . .
But other Western countries such as Germany and France are poorly prepared and the situation is particularly acute in Asia, where only Singapore and Hong Kong are at the same level of awareness and compliance as Australia.
One Sydney-based computer expert, Bob Hayward, vice-president of Gartner Research Group, says this could lead to a second wave of economic crisis for Asia next year because the level of non-compliance is so high.
He termed Japan a 2000 "nightmare" because of its reliance on "old iron" mainframes, heavy use of in-house customised software and a failure by government and business to grasp the nature of the problem. Cultural factors also were impeding progress. . . .
US Securities and Exchange Commission chairman Arthur Levitt told the US Senate Banking Committee last month he did not think enough was being done on an international basis. . . .
Hayward is particularly fearful that no major financial institutions in Japan are doing anything about the millennium bug and only a very small percentage of Japanese companies will be ready in time.
"The general consensus is that most of Asia is nowhere near ready. The less developed computer user countries like Malaysia, Thailand and Indonesia will have major problems, " he says.
With some Asian countries now in "survival mode" because of the economic crisis, Hayward says 2000 bug budgets are being slashed. The Thai Government, for example, has halved its financial commitment to the problem. . . .
If Asia is in dire straits, the situation is scarcely much better elsewhere. One of the foremost international experts on the millennium bug, Canadian Peter de Jager, says the most recent World Bank survey shows a "pathetically poor" number of its members are even aware of the problem. "What happens to finance when the information stops?" he asks.
He says the key areas of finance, utilities and telecommunications are at risk. "Whether or not we have the courage to admit it, we do have a crisis on our hands."