No hiding place

Further Reading:

Search archive

UNUSUALLY among modern scourges, the Year 2000 problem afflicts the rich more than the poor. Not only do developing countries rely less on computers; they are also more used to the inconveniences the millennium may bring, such as failing power supplies, delayed flights and dead telephones. But some of the poorest countries depend disproportionately on ageing mainframes or a handful of control systems for crucial parts of their economies. And some of the newly industrialising countries make enough use of both computers and instruments containing embedded systems to face serious disruption.

Many of them seem perilously unaware of the difficulties they may face over the next two years. Iain Anderson, who advises Britain’s Tony Blair on millennium issues, recalls a recent lunch with a senior Thai businessman. “He said, ‘Of course, it doesn’t affect us because we have a different calendar.’ But the Thais got their operating systems from the United States and then gave them Thai tweaks.” This Gregorian fallacy also seems to affect other parts of Asia and much of the Middle East.

The World Bank has become anxious to jolt industrialising countries into action. Among the 30 countries with the largest repairs to undertake, ten are developing countries (see chart 8). They include Russia, Ukraine, India and Pakistan. South Africa is almost alone in having made good progress.


The least developed countries face special difficulties. Sometimes their software was pirated; sometimes they were given equipment as aid, and the providers do not want to pay for repairs. Hardware is generally ancient, leaving them with no option but to scrap and replace. That is hard for a country whose currency has collapsed against the dollar, which is widely used for invoicing new software and hardware. The poor tend to find themselves at the back of the queue for help from manufacturers, vendors or consultants.

The International Telecommunication Union has set up a working party under Ron Balls, seconded from Britain’s BT. “I’m trying to say to some of the major vendors: you know what’s where. Please tell us.” He is urging big multinationals to help, and chivvying not just telecoms operators, but power and water companies in developing countries as well. Companies such as BT, IBM and Cable & Wireless are offering training. But he frets about Russia and some parts of Central America, which have not even asked for help.

At the World Bank, Carlos Primo Braga, who heads the unit dealing with the issue, has similar qualms. The bank has little money for millennium work. What it has to spend goes to run seminars and help countries such as Mauretania and El Salvador develop national plans. At this late stage, the ponderous bureaucracy of international aid is particularly unhelpful.

For multinationals working in industrialising countries, the main worries are infrastructure and the readiness of key trading partners. Des Dempsey, commercial director of Unilever in Indonesia, says the telephone company there expects to be compliant by the middle of 1999 and the electricity board by the end of that year, but the water company has not taken up his invitation to come and talk. Given the present political and economic turbulence, the Year 2000 may not be the most pressing problem facing many Indonesian companies. Mr Dempsey plans to build buffer stocks to see him through.

Developing countries are likely to become the first victims of “fortressing” next year as rich-world institutions try to insulate themselves from the risks of doing business with them. Commonwealth Bank’s Mr Pritchard recalls a conversation with a businessman who exported to Asia. “They usually pay when the goods arrive,” he said. “But I’m going to change my terms as the millennium approaches and say, pay in advance or it doesn’t go on the ship.”