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The Global Challenge
of Y2K
Y2K disruptions will not be constrained by national borders.



The United States has always prided itself on its independence. Part of our national image is a particularly strong sense of the rugged individualism that built America. This should not, however, blind us to the fact that the health and welfare of the United States is intrinsically bound to the viability of the global economy. Nowhere is this global interdependence more obvious than in our dealings with the Y2K computer problem.

Foreign factories supply critical parts to American automakers. During the winter months, our fresh produce is imported from Chile. Eighty percent of the ingredients used by pharmaceutical manufacturers, 40 percent of our fruit, and 55 percent of our oil comes from other countries.

At the same time, a vast array of American-made products are exported to the most obscure locations across the globe. The fact is, America’s marketplace is filled with foreign products, and the market for American products is the world. It would therefore be naive to think that Y2K disruptions abroad will be constrained by national borders. If these disruptions involve countries that either buy or sell U.S. goods, we will feel the impact.

All of us, therefore, should be concerned that some of our neighbors have not addressed their Y2K problems as aggressively as they should. Canada, the United Kingdom, Australia, and Sweden have all made excellent progress in attacking the Y2K problem. Some European countries, however, are not doing as well as expected. In many cases, the euro conversion has taken priority over Y2K work and Y2K has simply not attracted enough attention from either the public or private sector.

Developing countries face serious shortcomings in Y2K preparation. The World Bank has concluded that developing nations lack the resources, both technical and financial, to address the problem. And contrary to conventional wisdom, developing countries do depend significantly on information technologies. Yet computer systems in these countries are usually much older than those used in developed nations, and they are often taxed to capacity, with few back-up systems.

Most of us refrain from telling our neighbors when they fall behind in their housecleaning, because we realize that from time to time we may have difficulties with our own houses. In the same way, we should not be pointing fingers at other countries for their shortcomings without acknowledging that the United States still has its own areas of weakness. A case in point is the recent announcement by the Clinton administration that the federal government is 92 percent ready for Y2K. While this is a significant accomplishment—and one that would have been unexpected just 18 months ago—the reality is that much remains to be done; 92 percent Y2K compliance is not compliant.

Ninety-two percent compliance doesn’t mean that everyone’s lights will dim by only 8 percent, that planes will fly 8 percent lower in the sky, or that water pressure will drop by 8 percent. Instead, it means that if you rely on a certain government service that is noncompliant, there is a 100 percent chance that you will suffer from a Y2K failure.

As of February 12, 1999, the Department of Health and Human Services was only 87 percent compliant, causing great concern for the health care of the nation’s 34 million Medicare beneficiaries. That agency’s payment management system will not be ready for final testing until June at the earliest. This system manages $165 billion in grant payments for school lunch programs, highway construction, and health care. It administers payments to the states for 10 federal agencies, including the departments of Agriculture and Labor and the Social Security Administration. If not corrected, it could affect 2,900 universities, 7,500 hospitals and 3,800 state government agencies.

On March 31, 1999, President Clinton’s deadline for federal government Y2K compliance, the Defense Department was only 72 percent compliant. Yet to be repaired were 156 mission-critical systems, including mission planning systems for the F-117A Stealth Fighter and the F-15E fighter, and the ballistic missile Early Warning System command and control networks.

Doing little to quell fears about safety at domestic airports, the Department of Transportation, by March 31, reported only 53 percent compliance at domestic airports, which handle more than 1.5 million passengers every day. In addition, the Commerce Department reported only 86 percent compliance, the State Department 61 percent, the Labor Department 85 percent, and the Agency for International Development—with only seven mission-critical systems to repair—0 percent compliance.

The March 31 deadline was set to allow nine months for operational testing, which then had to be delayed. Will a new deadline allow for the necessary end-to-end testing of benefit systems that serve the nation’s most needy citizens? And is the federal government drawing up contingency plans in case these systems fail?

We are so close to the finish line that we dare not relax our efforts. The American people depend on 100 percent compliance in the federal government. And regardless of domestic Y2K problems, the United States has a responsibility as a world leader to encourage a politically and economically stable environment. We must work to alert other countries to potential Y2K dangers and encourage the exchange of information that will facilitate Y2K remediation.

I recently contacted North Atlantic Treaty Organization General Secretary Javier Solano to encourage NATO involvement in meeting the world’s Y2K challenges. The strong leadership that NATO has shown in the recent Kosovo crisis will be needed again to manage the global threat posed by Y2K. While it is imperative that NATO focus on successfully accomplishing its current engagement, it must remember the concurrent challenges that could well impact future operations. The Y2K technology problem presents one such challenge.

Left unaddressed, the Y2K problem could affect critical systems such as command, control, communications, and logistics management. System failures could threaten NATO’s ability to complete critical missions. While information technology managers may be able to assure that components of critical systems are operational, orchestrating the broad contingency plans that would be required in the event of failure is something only a commander can accomplish.

Perhaps the mission of the Allied Force in the Balkans will come to a successful completion before the year is up. Should it linger, however, Y2K failures both in NATO systems and military systems and infrastructures of member nations could impact logistics support and armed forces management. Unlike the amateur hacking attempts of the Serbs to thwart NATO computer systems, Y2K failures could substantially impede NATO, potentially compromising missions.

We must also consider that the United States may be called upon to assist its neighbors if Y2K has a severe impact. The United States has traditionally been one of the strongest supporters of humanitarian aid around the globe. It is unlikely that we would turn our back on the international community in the aftermath of Y2K disaster. Instability in many countries could create opportunities for terrorists. The instability that results from the breakdown of infrastructure such as electricity, telecommunications, and transportation would pose humanitarian challenges and could indeed call for military intervention.

In answer to the humanitarian challenge posed by the conflict in Somalia, President Bush sent in U.S. troops, primarily to feed the starving population. The possibility of a similar situation arising from Y2K certainly exists. CNN may show pictures of villages without power, water, or telephone service (and therefore no business activity), and widespread unemployment and starvation.

Y2K collapse may not happen on January 1, 2000. We are now getting information in the Senate Special Y2K Committee indicating that the deterioration of systems may start on January 1 but will be cumulative and crest around the end of January or the beginning of February. Therefore, the element of instability is clearly something the American military is going to have to address.

The global interdependence of systems is cause for concern. For example, the Defense Department no longer has its own network phone system. Instead, the Pentagon makes calls through Bell Atlantic just like everyone else. To get better service that is cheaper and faster, the agency has dismantled its old, redundant system. If this level of interdependence of infrastructure exists in the United States, it is even greater overseas.

What will happen if the military of our coalition partners doesn’t function properly and the United States has to pick up the slack? U.S. troops are scattered around the world. What will happen in Korea, for example, where the United States has stationed 30,000 to 40,000 troops and their dependents, if the infrastructure fails? The families of American servicemen and women will go without power, water, telephone, or food service. And if not in Korea, the chances are excellent that Y2K failures will occur somewhere where U.S. troops are stationed. The military faces a huge task in preparing for this possibility.

Y2K also poses security concerns. The necessity of hiring additional computer programmers has created the possibility that a programmer could slip through a security check and access Defense Department code, inflicting serious sabotage. This is a vulnerability that the military must address.

Despite the need for international cooperation on Y2K, there has been little in the way of information sharing to combat the effect of the glitch. The United Nations recently held the first summit on Y2K with delegates from more than 60 nations. But at this stage, it’s too little, too late. What is now called for is a plan for global triage to stem the effects we know are coming. Of course, the world’s wealthy nations will be called on to provide guidance, resources, and expertise.

After studying this issue for more than two years, my primary concern is that Y2K may trigger an old-fashioned, global recession. Y2K may have devastating effects on small and medium-sized businesses, which are among the least-prepared for Y2K. An inventory recession—caused by transportation failures and the consequent build-up of manufactured goods and raw materials—could cause job losses around the world. The result could be a series of boom-and-bust economic cycles that begin in the year 2000 and play out for years to come. And in an age where capital can be withdrawn from an entire nation by a simple keystroke—as we saw in the Mexican peso crisis—some developing nations may simply fall off the economic map and be plunged into extreme poverty.

The approach of the new millennium presents us with some of the same questions — albeit economic ones — that faced our nation on the eve of World War II. Our economy is strong and well protected. The question is whether we will have the foresight and courage to step onto the world stage to prevent a global catastrophe.n

U.S. Senator Robert F. Bennett, a Republican from Utah, is chairman of the U.S. Senate Special Committee on the Year 2000 Technology Problem.

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