Y2K - hype or reality?
Business Page
By Christopher Ram
Stabroek News
December 12, 1999
That 'Guyana Watch' article
Many readers of Business Page would have received through the post or from the Internet what purports to be assessment of the seven banks operating in Guyana. Banking is a very sensitive issue on which the entire economy depends. Reporting on the sector requires complete and unbiased information. In any case one should always avoid generalisations, such as the industry "bordering on a state of crisis" or to advise depositors "to take their money out."
Whilst the Bankers' Association may feel that to respond will add legitimacy to the article, the many half-truths and innuendoes suggest that a measured response is necessary.
Introduction
As the century draws to a close and the new millennium approaches there are varying degrees of concern about the potential impact of the much publicised 'Y2K' problem. This anxiety has arisen because about four decades ago when computer storage space was extremely expensive most computer programmes were designed to recognize a year by its last two digits. All older programmes and systems operated on the assumption that all years begin with 19 and would mistakenly interpret "00" as the year 1900 instead of 2000 if 'fixes' were not put in place.
Potential chaos
Without these "fixes" major chaos would result because the error in reading the date could affect every conceivable sphere of life that involved computers. Confusion would ensue over maintenance and processing of date sensitive data and financial institutions, public utilities like electricity, water and telecommunications providers as well as airlines could be affected. The developed and developing world has become dominated by computerized systems, and computers are so much a part of everyday life that we take many things for granted. Access to our bank account air travel and using the telephone are some of the routine everyday activities that the Y2K bug may affect with varying degrees of harm.
New industry
The problem has spawned an industry and billions of dollars have been spent worldwide on addressing the issue and making computerized systems 'Year 2000 compliant.' Money has had to be spent both on hardware (equipment) and software (programmes) to ensure proper recognition of the new millennium dates. While Guyana is not as computerized as many other countries, the nationwide effort to address Y2K concerns has not been as intensive and coordinated as one would like. Then again this should not be a surprise and any fallout will be blamed on that old favourite excuse: resources are in short supply.
Alarms The first serious alarms were sounded about the potential problem around 1995 when some Americans recognized it. They immediately advised those with whom they did business about the severity of the issue and the necessity that it be taken seriously and addressed. Eventually the wave of concern grew throughout the United States and spread to the rest of the world. In this case unlike the usual hype that is synonymous with things American, there was legitimate cause for alarm.
Financial services
The nature of their business mandated that the institutions in the financial services sector take the lead in resolving the issue. Banks, investment brokerages and insurance companies were custodians of billions of dollars and could ill afford panic by the public over their inability to track these funds. Potentially financial records could be deleted from institutional computers and the resulting chaos could put these entities out of business. It is therefore not surprising that all major financial services entities in the United States had begun to implement fixes by 1997.
The Gartner report
In August 1999 a strategic analysis report 'Year 2000 World Status, 2Q99: the Final Countdown' was released by an American consulting company called the Gartner Group. The report dealt with various aspects of the problem but more relevantly with the state of readiness of 87 governments covered by the report. While Haiti could be found, no mention was made of Guyana and one could only hope that this has no significance for our level of preparedness or that this writer erred. Of course a standing joke has been that technologically, Guyana is still in the early twentieth century and therefore Y2K will not be a problem any time soon.
State of preparedness
The Gartner report and others funded by the United States government have presented updates on the state of Y2K preparedness of critical industries in America and the findings are revealing. The most prominent industries cited are financial institutions, public utilities, telecommunications and airlines all of which form the backbone of the society.
As many as 99 per cent of all financial institutions insured against failure by the government had completed testing. Electrical distribution systems handling 96 per cent of the electricity supply and 98 per cent of the largest telecommunications providers were compliant. Major U.S and Canadian airlines had completed 95 per cent of their fixes and the remainder expected to be fully compliant by September.
One per cent is huge
The reports not surprisingly identify local governments, schools and small businesses as the least prepared to face the potential problems. The state of readiness or those who were close to being ready for what are considered critical areas of activity was in upper 90 per cent range which on the surface appears to be acceptable. However with the large volume of computers and computerized systems that proliferate in North American society 1 per cent is a significant number and could involve tens of thousands of systems.
Conclusion
This means that there will undoubtedly be some problems but that they have been minimized. To what extent their impact will be felt? No one can really be sure. Of course the information presented deals with the USA but what of other countries like Guyana? It may be that lack of technological sophistication is a blessing in this instance since our reliance on computerized systems is limited. However while snippets of information have surfaced from time to time it would be interesting to ascertain the level of preparedness of Guyanese entities in both the public and private sector.
Those that have done nothing should consult with a reputable company on Y2K compliance issues and beware of those fly-by-nighters who merely want to capitalize on the situation without having the credentials to offer a service of real value. There is not much time remaining to address the problem but any entity that has not done so can still take some important steps.
Contingency plans must be made and back up copies of all history and transaction records and information should be maintained in both hard and soft copy format. No one really knows what is likely to occur but taking adequate precautions in areas over which one has control is one way of minimizing any problems.
After you have done all you can a good old prayer may not be a bad idea at all.
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