http://www.joc.com/issues/990308/p1age1/e20324.htm

Experts warn of Y2K trade upheaval

Each nation's problem will become a global one

BY WILLIAM ROBERTS

JOURNAL OF COMMERCE STAFF

WASHINGTON -- Experts on the millennium computer bug warned Congress last week that international commerce and trade may face serious disruptions early next year because of computer failures in foreign countries.

Painting an alarming but uncertain picture, a National Intelligence Council officer and a State Department watchdog told a special Senate oversight panel on Friday that many foreign nations are not prepared.

"It is becoming increasingly clear that there will be Y2K-related problems in virtually very corner of the globe," Jacquelyn L. Williams-Bridgers, inspector general of the Department of State, told a hearing of the Senate Special Committee on the Year 2000 Technology Problem.

"Faced with a relentless and unforgiving deadline, countries have to make difficult decisions concerning the use of scarce resources to fix a problem that has not yet occurred," she said.

[snip]

The international transportation sector is particularly vulnerable, she and Lawrence K. Gershwin, National Intelligence Council officer for science and technology, said. "Global linkages in telecommunications, financial systems, the manufacturing supply chain, oil supplies, trade and worldwide shipping and air transportation will virtually guarantee that Y2K problems will not be isolated to individual countries," Mr. Gershwin said.

Among the difficulties the two officials outlined:

Both the Panama and Suez canals face the risk of disrupted operations should traffic management systems or ship steering mechanisms fail. Panama officials say no ships will be allowed into the canal on Dec. 31. A Norwegian firm is working now on fixing the Suez Canal's traffic system.

China probably will experience failures in several areas, including transportation and power generation. An estimated 90% of software used in China, even by government offices and state-owned enterprises, is pirated, making it very difficult to approach vendors for fixes. China is planning to conduct a nationwide aviation test. Senior officials have been ordered to fly on New Year's Day.

Central and Eastern Europe are believed to face vulnerabilities in Soviet-designed nuclear power plants, though Western experts do not know what specific problems they may have. Many vendors of the software and equipment stopped operating after the fall of the Soviet Union.

Russia Gazprom natural gas pipeline network is susceptible to potential Y2K outages. It supplies nearly 50% of the total energy consumed by Russia. While Gazprom has backup plans, it is unclear whether these measures are sufficient to deal with the scale of problems that could occur.

Major oil-producing nations are behind in fixing their Y2K problems. Oil production and distribution is largely in the hands of multinational corporations, but the sector's use of information technology is highly intensive.

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-- Kevin (mixesmusic@worldnet.att.net), March 09, 1999

Answers

Funny I dont see these problems as a bad thing for us The US has oil reserves which will carry us until our long awaited alternative energy initiative is brought back This is a good thing. Maybe this will enable our childernes children to survive over the next few generation by stopping the destruction of the ozone layer. As far as Russia goes, well lets see the ruple has already crashed this year, merely denting our economy. Cherobyl has melted down , so we can see the nuclear power accidents in Russia impact us minimally. China's airlines? well excuse me but i dont plan to be flying to peking anytime soon.

In Summary..... just more scare tactics. My advice, prepare moderately at home and look for the advantages. both economic and social the new new millenium will bring

-- nyc (nycnyc@hotmail.com), March 09, 1999.

Oh that's good NYC....what an idiot you are. You're all wet on the fossil fuel theory causing the ozone layer problem, but that's another issue for another thread - - but I know from whence you come.

You apparently have been asleep for the last fifteen years under your rock, not noticing this little global infrastructure that has built itself up around us. But perhaps it's not your fault. You sound like a person educated in our prestigious public school system.

You are free to ignore current global dependencies if you wish, but demaguoging reports like this one posted as "Scare tactics" proves without question your inability to excercize reason or judgement.

Hurry, back to your slumber...your six-pack is getting warm...

-- INVAR (gundark@aol.com), March 09, 1999.

nyc,

Would you care to speculate on why scare tactics would be used by "...a National Intelligence Council officer and a State Department watchdog..."? To what end?

Or let me ask you about it this way: you said that people should prepare moderately at home. How do you think people would prepare if they took the National Intelligence Council officer and the State Department watchdog seriously?

-- Kevin (mixesmusic@worldnet.att.net), March 09, 1999.

Well it's about time - I've worried about this trade problem for 8 months - now, when will "they" start predicting the stock market dip I've been expecting for the past year - I figure the dip should begin about late October, be conservative go to bonds in mid Sept - it will rise a bit in Nov from buyers getting too late back in, then drop hard in Dec. recover about mid Feb - best bargains in middle to late Jan - go from bonds to stock in mid Jan - as soon as you think the bottom hits. A small dive in late March when quarterly earnings come out.

A dip in May when IRS reports no one paid taxes. Then a rise when everyone realizes no one paid taxes and the money has to go someplace before the sales tax cuts in. Then a dip when they try to tax stock sales - then .....

-- Robert A. Cook, P.E. (Kennesaw, GA) (cook.r@csaatl.com), March 09, 1999.

See also ...

SENATE TESTIMONY: CIA Assesses Global Y2k Readiness (USIA, March 5, 1999)

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id= 000ZjV

SENATE TESTIMONY: State Department Reviews World Y2K Readiness (USIA, March 5, 1999)

http://www.greenspun.com/bboard/q-and-a-fetch-msg.tcl?msg_id= 000Zja

-- Diane J. Squire (sacredspaces@yahoo.com), March 09, 1999.

I love your posts, Robert. You have a great way of wording things.

Jeannie

-- jhollander (hollander@ij.net), March 10, 1999.

Invar,

quite right , you caught me there, too much late night typing fossil fuels cause greenhouse gases, CHF's affect the ozone layer. Your right....Im wrong. Unfortunately thats where your contribution ends, the rest of your response speaks for itself an warrants no response on my part.

Kevin your qustions are valid as to why I think the way I do concerning these statement from the government. But as Invar has showed me, I need to compile a more thoughtful commentary on them , as they are a bit radical....more to come.

The overall point of this post is that not everything in this nation is so tightly integrated into the global economy as we are led to believe. Especially the countries being reffered to here. ie Russia, China and Eastern Europe. We refer to these as emerging markets. The canals another story of course but as the article states that problem is currently being worked on.

nyc

-- nyc (nycnyc@hotmail.com), March 13, 1999.

nyc,

It's more than just Russia, China and Eastern Europe. See this article for the projected compliance rates of Germany and Japan:

http://www.abcnews.go.com/sections/business/DailyNews/y2kcountries9812 28.html

"Y2K vs. the World"

-- Kevin (mixesmusic@worldnet.att.net), March 13, 1999.

OK kevin,

My last post for the evening. Thanks for not flaming, its getting a bit tiresome actually. Hmmm how do I start here, first off ill get the gut reaction stuff out of the way i guess.

www.abc.news.com Spinmasters of information, I personally view anything coming out of this level of mainstream media as viciously skewed.

Ok thats done.

Assumming there charts are factual , which I will, i found it suprising to see Japan and Germany down in the 50 percent range. I would have imagined them to be higher. Lets see if we can get in perspective what this means. I think you can approach the impact on us from any number of angles. Ill choose two for now. Currency strength and imports/trade.

Germany first,

From a currency impact this issue is complex where Germany is concerned. Its a participant in the EURO. we no longer trade German Marks, so in a way they are not alone they havve the remaining EURO countries to bolster them. So from one angle they could be raise into a lower impact level in this category. Of course that knife cuts both ways they could also have the effect of dragging the other EUro particpants down a bit. Difficult to asses, but Ill bet there are experts evaluating this right in the foregin exchange right now. Imports, well whats our main import from Germany, industrial products I believe. Cars, medical equipment etc. Could pose a problem , but not necessarily a significant one.

Exports, Probably a bit of everything clothing, grain. Any significant failure in germany will more than likely have a negative effect on our exports there. The complication here tho is that in the event of sever Y2k problems, I see thier need to import our goods increasing. That leaves us to consider thier ability to pay for it, which rests on the economics outlined in issue 1, complicated, not cut and dry at all.

OK Japan.

Currency wise.

The yen , while still a major currency in the world , is not what it used to be , many banks have already adjusted thier Yen positions and if There becomes a serious doubt as to Japans ability to handle Y2k, will do so even more. Call it a currency embargo if you will Thats what I see happening there.

Imports, we get a lot of electronics from Japan. Significant Y2k problems will end that in a hurry. They produce a good percentage of the worlds semiconductors. Bottom line here, If you need electronics or plan to upgrade your systems, do so soon. This situation may also represent a shift in the electronics industry worldwide, a really optimistic view is that it creates more jobs at home.

Exports. Weve been fighting with japan for years over unbalanced trade. They never let us ship any significant amout of goods there, well folks if they have Y2k problems itll be time to pay the piper on that decision. Bottom line no significant effect on GNP.

This is a very simplistic analysis of the potial effect on us due to Y2k failures in germany and Japan, based on my opinions. Please feel free to add anything you like. Im tired now and IM going to be

nyc

-- nyc (nycnyc@hotmail.com), March 13, 1999.

nyc,

The projected compliance rates by country are not ABCNEWS.com's. They are from the GartnerGroup and ABCNEWS.com was only reporting them.

You should be extra concerned when you hear this kind of news in the mainstream media. Usually the "bad news" about Y2K is said to be on Internet sites such as this one or Gary North's, or the "bad news" is buried deep in Congressional testimony.

Why are Germany and Japan so far behind on Y2K? First, Y2K compliance is furthest along in English speaking countries. Peter de Jager is a Canadian. It probably took awhile for important documents on Y2K to get translated into foreign languages.

Germany, as I'm sure you know, has been one of the strongest supporters of the Euro. Germany has been more concerned with Euro conversion than Y2K, while Britain has been more concerned with Y2K than with Euro conversion.

Japan, as I hear it, is a culture that doesn't like to hear bad news and doesn't like to discuss their bad news with others. This could be another reason why awareness of Y2K issues grew so slowly in Japan.

Let me put this whole situation into perspective for you. What I believe is about to happen in the next 12 months is that years of productivity gains globally will be wiped out. That would lead to reduced standards of living and result in less goods and services being purchased--recession or depression.

By the way, it's my standard policy not to flame others. I'd much rather them pay attention to what I'm saying rather than how I'm saying it.

-- Kevin (mixesmusic@worldnet.att.net), March 13, 1999.

And that is why, Kevin, your responses have a greater chance of reaching the target.

Those with aspirations of convincing DGI's, take note.

-- Sara Nealy (keithn@ptd.net), March 13, 1999.