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Web-only Exclusives November 30, 2000 From Our Correspondent: Hirohito and the War A conversation with biographer Herbert Bix From Our Correspondent: A Rough Road Ahead Bad news for the Philippines - and some others From Our Correspondent: Making Enemies Indonesia needs friends. So why is it picking fights? |
DECEMBER 24, 1999 VOL. 25 NO. 51
It's All Right Now
But as the millennium bug creeps closer, Asia should prepare for minor irritants
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 Philippine National Bank workers practice doing things the old way Edwin Tuyay for Asiaweek |
Financial institutions have developed contingency plans to ensure they can continue operations come what may. The Philippine National Bank hauled out of mothballs vestiges of a bygone era. Pencils, ledger cards, rubber stamp pads and printed forms have been mobilized, and employees are being trained to do business unaided by microprocessors - this in a country already accustomed to blackouts and brownouts. "It sounds funny," says Danny Flores, chief of the Business Continuity and Contingency Planning Group for the Philippines' third-largest bank. "But if everything else fails, what do you do? We're not embarrassed to tell the public we're prepared to resort to these tools."
ALSO IN ASIAWEEK
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The International Y2K Cooperation Center, a United Nations group monitoring the phenomenon, predicts worldwide there will be many bug-related failures in automated systems but the combined damage will be "moderate." Critical systems "will function about as well as they normally do in the first days of the new year," according to the center's just-released final report. Because of the nature of the millennium bug, problems will not be confined to the minutes following midnight's stroke. Troubles could continue in the early days, weeks and months of 2000 as computerized processes such as monthly billing encounter indigestible date fields.
The greatest worries have been reserved for developing countries that have fewer resources to test and repair systems and generally have been less motivated to tackle the bug. In Asia, Indonesia is considered particularly worrisome. Earlier this year, the country made the U.S. Central Intelligence Agency's list of the world's most-vulnerable nations to Y2K problems. But today, observers say Indonesia will likely muddle through the rollover without major disturbances - thanks to good fortune rather than good planning.
"Our initial view [of Indonesia's Y2K prospects] would have been fairly disastrous," says Robert Kerr, a Jakarta consultant who heads an informal group of diplomats and expatriate managers studying the issue. Indonesian managers in the private and public sectors were late to address Y2K concerns, partly due to the country's financial problems as well as social and political turmoil. Now, the situation "is better than anyone could expect," says Kerr. For one thing, computers are not heavily relied on everywhere. It is not uncommon to find someone with a PC on the desk filling in account books by hand. Of Indonesia's 160 banks, 140 are "Y2K irrelevant" because they are not highly computerized, says Ending Fadjar, the chairman of the Y2K task force for Bank Indonesia and the banking sector.
Indonesia may also get a break from the lunar calendar. Every year at the end of the Ramadan religious fast, the world's most populous Muslim country virtually shuts down for two weeks as people go back to their villages for the Lebaran holiday. This year, Lebaran falls on Jan. 8-9. Many firms have scheduled company-wide vacations, in hopes that suspending operations for the first two weeks of the year will allow some breathing room to repair glitches, says G.I. Zanacco, president of shoe manufacturer PT Sepatu Bata.
Indonesia's low-tech infrastructure will mean few power blackouts on islands outside Java, the most populous. In most areas, PLN, the state electric company, still uses uncomputerized diesel generators. In Java, the utility has considerable unused capacity due to the prolonged recession, so spare generators can be brought online in reserve. Computer clocks in systems that have not been fixed in time will be reset to 1972, a year in which the calendar corresponds to Year 2000. Records will show the wrong year but at least everything will work, officials hope.
If investors are worried about the country's fate, they aren't rushing the exits. Volatility in the Jakarta stock market has been blamed more on unrest in the resource-rich Aceh region and less on the bug. Some foreign institutional investors are prohibited by their own internal rules from holding stocks in emerging markets ahead of the date rollover, and institutional selling "contributes to the downward pressure," says Jos Parengkuan, managing director of Danareksa Securities. But Parengkuan says Indonesia's Y2K worries are overblown. "Low-tech could be a blessing in disguise," he says.
In developed countries, the real Y2K threat now appears to be unfounded public panic. Some fear that a New Year's power blackout in, say, Manila, caused by a non-Y2K event, could be reported in the media and grow through rumor into a crisis elsewhere. "The great unknown is the human reaction," says Don Meyer, spokesman for the U.S. Senate's Y2K committee.
Government officials anxious about their message might consult the inch-thick contingency manual created by Philippine National Bank. In opening pages, the manual suggests that everyone who reads it "join hands in praying that this plan will remain just as it is - a plan." What better way to begin a new millennium than by averting global disaster?
With reporting by Alan Robles / Manila, Laxmi Nakarmi / South Korea, Suvendrini Kakuchi / Tokyo, Yulanda Chung / Hong Kong and David Hsieh / Beijing
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