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Saturday April 10 1:01 AM ET

Japan Industries Step Up Y2K Efforts-Government

TOKYO (Reuters) - Japan's key industries are stepping up efforts to protect themselves from potentially disastrous computer problems at the dawn of the year 2000, a government report said Friday.

But while major industries were making good progress in fixing computer programs and running them through simulation tests, many local governments were falling behind, Kyodo news agency quoted the report as saying.

According to the report, presented to a panel of private-sector experts, companies in five key industries -- finance, energy, transportation, medicine and telecommunications -- were making notable progress.

In the finance sector, 73 percent of financial institutions had completed the necessary modifications to crucial computers by the end of December 1998, and by the end of June virtually all will have finished running simulation tests, the report said.

But only 54 percent of local governments said they had achieved 80 percent progress toward preventing problems, and only 30 percent said they had run simulation tests, the report said.

About 60 percent of Japan's 47 prefectures said they had made more than 80 percent progress, while 40 percent had run simulation tests, the report was quoted as saying.

An official said the central government would urge these governments to speed up their efforts, Kyodo said.

The potential glitch, also known as the Y2K bug, could trigger widespread disruption when 1999 turns to 2000 because some computers and software recognize only two-digit numbers to represent years, and could take the zeroes in 2000 to mean 1900.

A senior analyst at a U.S. research institute told Reuters last week that Japan had moved into a higher bracket of nations in its readiness to deal with the problem.

Andy Kyte, research director at Gartner Group, said that in a survey based on the fourth quarter of 1998, Japan's infrastructure risk was ranked at level two on a scale of four, along with countries including Brazil, Germany, South Korea, Mexico and Thailand.

At level two, Gartner predicts isolated and moderate risks of power loss, natural gas interruptions, air transport interruptions and oil shortages.

In its previous survey, Japan was ranked at level three, along with, among others, Argentina, Kuwait, South Africa and Turkey.

Level one countries include Britain, the United States, Australia, Canada and Israel.

Commenting on the individual sectors, Kyte singled out Japan's major financial institutions as most advanced and the public sector, mainly computers used in government offices, to be furthest behind in their preparations.

-- Deborah (infowars@yahoo.com), April 10, 1999

Answers

Curiouser and curiouser, given that in February the Japanese government's own Financial Services Agency (FSA) reported that as of Dec. 1998 almost half of Japan's 19 largest banks had completed only 25% of "needed repairs" for Y2K and that only two of the 19 largest banks had completed as much as 75% of necessary repairs. This is particularly chilling if you know anything about Japanese "spaghetti code."

Following Japanese govt. reports on Y2K over the past six months has often given me whiplash: first the govt. will issue a dire report, then public and investor pressure forces them to issue a more rosy report, etc. They do seem to have learned from Koskinen: everything will be OK, except maybe some trouble with local governments, etc. Right.

As for Gartner and its ranking of Japan, let's not forget that in its latest "global survey" Gartner also listed Italy as a category 2 country. Enough said.

-- Don Florence (dflorence@zianet.com), April 10, 1999.

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