In the early hours of New Year's Day this year, three airports in Sweden discovered what it was like to be hit by a Y2K-type bug. In the computers used by the airport police, "99" was read as "terminate," and their computers crashed. Travelers without visas found it impossible to get transit visas, and amidst a storm of complaints, had to go back to where the came from.

In early March, the Y2K Special Committee of the US Senate released a report stating that the major oil producers Saudi Arabia and Venezuela were lagging in coping with Y2K. If this is really the case, when the time comes the supply of petroleum could be affected, which would be a tremendous blow to the global economy.

During a recent conference in Singapore on how the global financial industry is coping with the Y2K crisis, even the host country, which is in the forefront of those dealing with Y2K, had to admit that they were considering giving the financial industry an extended holiday after the new year, to give banks some breathing room to make last-minute changes on anything they may have overlooked.

Many experts concede that the Y2K problem could be even worse than predicted. However, will it really lead to widespread chaos? In the United States, a small number of religious fanatics equate Y2K with the ancient prophecy of the end of the world. They are warning people to stay indoors and pray, and to stock up on vital supplies like drinking water, staple foods, gasoline, medicines, batteries, emergency lighting, and so on, like a modern-day Noah's Ark. Fearing the banks will crash, they are taking out huge sums of money. Worried that a power outage will lead to riots and looting, they're buying guns to protect themselves. There are even those who fear that they'll be hit by an accidentally launched nuclear missile, so they are taking to the hills. . . .

If Y2K broke out without people having done anything to prevent it, then the apocalyptic nightmare could perhaps have become a reality. However, hundreds of billions of US dollars have been spent and tremendous effort invested in tackling this problem, and Y2K is, in great measure, being brought under control. Some tragedies will inevitably occur, but those who say the sky will fall are just Chicken Littles.

What does Y2K mean to ordinary folks like us? There are several areas potentially affected by Y2K which are intimately related to daily life, including energy (electricity, oil, gas), water, and communications equipment like telephones. If there's no power, water, or communications, this will greatly slow down the pace of life and work.

Austin Lin, a Y2K expert at IBM Taiwan, declares: "Fortunately public enterprises in Taiwan began strategies to cope with Y2K early on." Lin, who is also a volunteer member of the government's "Y2K inspection service team" has taken advantage of this role to inspect public enterprises like Taiwan Power Company and China Petroleum over the past year. He gives them quite high marks, and feels that there's no need for the public to panic in this regard.

The Executive Yuan has designated seven national systems of concern-energy, telecommunications, health care, finance, air travel, and law and order-and teams from the China Productivity Center are responsible for monitoring their progress in addressing Y2K. Virtually anything closely related to daily life and social stability is being covered. Thus far progress has been quite decent (see table).

Take for example the problem of air transport management. Recently the International Air Transport Association vice-chairman in charge of emergency-response air routes visited Taiwan, and declared himself "satisfied" with Taiwan's civil aviation administration.

Besides power, water, and communications, what concern the average citizen most are the financial system, which affects everyone's financial well-being, and the health-care system, which touches on physical well-being. How are they doing in coping with Y2K? What should the public be on the lookout for?Health care

It is the wee hours of the morning on New Year's Day of the year 2000. A young person who has just left a raucous party gets in an auto accident on the way home, and he goes into shock while being sent to the hospital. The ER doctor yells, "Prepare the defibrillator!" But the defibrillator, which had been working perfectly just a day earlier, suddenly isn't producing any electricity. The patient is rushed off to another hospital, his life hanging in the balance. . . .

The patient has accident insurance, so, unless he was drunk at the time, he should receive compensation for the accident. However, when the insurance investigator discovers that there were Y2K-related problems with the instruments during the process of medical care, the company refuses compensation on the grounds that "Y2K is not an accident." Thus begins a three-sided dispute between the patient, hospital, and insurance company.

Don't get sick in 2000!

Though the above situation is hypothetical, it is not impossible. According to estimates by National Taiwan University Hospital (NTUH), about 7% of medical instruments would not pass a Y2K test. About 2% could cause serious damage or even death to patients.

Dr. Wu Ming-yen of the Non-Governmental Hospital and Clinics Association of the ROC states that when the new year arrives, at least ten percent of the kidney dialysis machines in Taiwan will not function, which will be bad news for the more than 20,000 people on the island who need these machines.

There is in fact a long list of equipment on the Y2K danger list: One is the cobalt-60 therapy unit used for treating cervical cancer. Because the calculations of the radiation dosage are connected to the half-life of cobalt, a mistake in the date would affect the amount of radiation delivered, giving patients more or less than they need, which would have serious consequences.

Many people would like to have a "millennium baby." But in the ultrasound machines made by certain manufacturers, problems have been discovered with calculating the term of pregnancy and expected delivery date. If the baby is going to be born in the year 2000, there could be errors such as miscalculations of the date or meaningless drivel on the computer screen. At such a time it will be necessary to rely on an experienced physician to judge things the old-fashioned way.

One information specialist familiar with the risks of Y2K in the field of health care declares: "I encourage everyone to stay in shape. Definitely don't get sick in 2000!" Of the major areas of concern established by the government, the health-care system gets relatively low grades in terms of coping with Y2K. This is not only the case in Taiwan, but also in advanced countries such as the United States.

Less is more

Hsiao Mei-ling, a specialist at the Department of Health (DOH) who is responsible for overseeing Y2K countermeasures in hospitals, relates in the testing stage. This is somewhat behind the corresponding that the DOH is responsible for 51 large hospitals (indicating regional hospitals or above), accounting for about 40% of the total number of hospital beds in Taiwan. Currently, all of these have completed necessary adjustments to their information systems or are figures for the financial, petroleum, or electrical power industries. As with industry, areas of Y2K concern in hospitals can be divided into information systems and non-information systems (the latter being mainly medical equipment and facilities).

The former indicates those systems governed by computers and applied software, including registration, payments, medical records, prescriptions, pharmacy records, personnel, accounting, and the like. For some of the larger hospitals, which began computerization early, this aspect will prove extremely complex. This is why hospitals like NTUH and Chang Gung Memorial Hospital are taking this opportunity to completely reengineer their information systems.

"In the big hospitals, all the medical records, pharmaceuticals inventory, even the elevators and the lights, are controlled by computers. Naturally Y2K will have a bigger impact on them," says a spokesperson at a hospital with only 80 beds. Smaller hospitals generally began computerization only in 1995, to coincide with the implementation of the national health insurance plan, which computerizes its billing records. Because this was so recent, they can switch back to doing things by hand at a moment's notice.

"For example," says the spokesperson, "a few days ago our computer voice registration system went down. All we had to do was switch over to registration by telephone, or on-the-spot registration with our staff taking notes by hand," he says. Small hospitals are used to being only semi-automated. "Our staff can handle many different things and are adaptable. They are not so 'fussy' as people at the big hospitals." He suggests that the low degree of computerization at small hospitals, and thus the lower dependence on technology, is turning out to be a good thing as far as Y2K is concerned. Hospital switch

But what if systems go down at the big hospitals? "Most of the patients who visit large hospitals are in fact only there on regular outpatient visits," says Hsiao Mei-ling. "If the systems go down, these people can simply go to the smaller clinics near their homes." Of course these clinics might also have computer problems, but this would not be as serious. For one thing, in many of these clinics only the national health insurance billing procedure is computerized, but registration and prescriptions are not. For another thing, in cities there are many small clinics, and people have a wide variety of choices, so they should always have somewhere to turn in the event of illness.

Turning to the Y2K problem in non-information medical equipment, people are very concerned.

British Y2K specialists working back in 1997 found that normally the monitoring and life-support systems in intensive care units rely entirely on instruments attached to the patient's body. If they detect anomalies in things like blood oxygen or blood pressure levels, the patient automatically receives the necessary medication. Unfortunately, many of these machines failed their Y2K tests. You can imagine that there are grounds for serious concern if no one can be sure how much medication an ICU patient is getting.

Back then some experts even warned that if immediate action was not taken, as many as a 1,500 patients worldwide could die as a result. This report marked the beginning of the Y2K battle in the area of medical equipment.

Medical equipment comes in a bewildering variety. Just as in industry, except for rare cases where a senior expert (a medical engineer in the case of hospitals) is available to repair bugged machines, those with Y2K problems will have to rely on the original suppliers to upgrade or replace defective machines.

Currently some of the larger hospitals in Taiwan have established websites with lists of machines which have experienced problems in Y2K tests. At the same time, the Department of Health is working with the US Health Industry Manufacturers' Association (HIMA) in hopes that it can bring large international manufacturers to strengthen their services in Taiwan.Be careful what medicine you take!

Because time is short, and not every hospital can afford to replace some of the more expensive machinery, at present the DOH is only requiring that the 51 hospitals under its jurisdiction determine, by the end of November of this year, which devices are likely to have problems, so that these are not used by mistake. Ones that cannot be repaired or replaced in time will simply not be used.

What if patients therefore have to transfer hospitals because the appropriate equipment is out of service? Well, other hospitals will just have to temporarily "put up with it" and "help out." Of course, the DOH is also working to keep abreast of data reported by various hospitals, so that if Y2K affects any particularly important machines, or a large number of devices of certain kind, the DOH will ask that the manufacturers provide assistance as quickly as possible so that patients are not left without necessary equipment.

Another problem which has recently been getting attention is that of pharmaceuticals. A recent report in the US suggests that insulin from Denmark (which supplies most of the insulin used in the States) may be unreliable because Denmark is not making sufficient progress with regard to the Y2K problem. Hospitals in Taiwan will have to pay close attention to maintaining an adequate supply of reliable vital medications.

Currently about 60% of the prescribed medications in Taiwan are made domestically. But pharmaceutical manufacturers are not under the jurisdiction of the DOH for Y2K matters. Problematically, they are not likely to get priority attention from their governing agency, the Industrial Development Bureau, because the total value of their production is not great. Who is going to monitor the quality of pharmaceuticals? This urgently needs to be clarified.

The Y2K problem in medical care should not be taken lightly. The DOH is calling on hospitals to accept responsibility and do what they can for themselves now to avoid disputes later. As for ordinary citizens, besides making a phone call to the local hospital to "show concern" about their progress on the Y2K problem, don't forget: Stay in shape, and don't get sick in the year 2000!

Finance

Many people have expected the financial sector to be a "disaster area" in terms of Y2K for many reasons. The main service driving the financial industry-lending money-often extends over years or even decades. Moreover, the handling of huge sums of money depends on computers, while financial institutions are closely interlinked on computer networks, so rocking one will shake the whole structure. Fortunately, because no one wants to see this disaster happen, in many places, including Taiwan, the financial sector has been among the most active in combating Y2K.

The advantages of the financial sector

What would a Y2K disaster in the financial sector look like? Have you heard the one about the guy who borrows NT$50,000 against his credit card in December 1999, and then when he gets his bank statement for February 2000 it says that he owes NT$10 million in interest? The computer decides that the distance in time between the statement and the loan is 00-99, or "minus 99 years," which, since the computer can't handle negative numbers, is 99 years-at 8% a year! Even worse, because of the huge amount of interest owed, the account has been frozen, and all the poor guy can do is jump up and down in frustration.

"This kind of thing isn't likely to happen," says Lin Yung-chien, deputy director of the Bureau of Monetary Affairs. Well aware of the potential impact of Y2K, the BMA began in early 1997 to spread the word, while a series of classes was begun for government and private banks, credit cooperatives, and farmers' and fishermen's associations. The financial industry is already past the initial adjustment stage and well into the testing stage. They should complete all their Y2K countermeasures before the end of June this year.

In some ways the financial sector is at an advantage compared to other industries in coping with Y2K.

The first is the asset size of most financial institutions. For example, new banks must have capitalization of at least NT$10 billion. With this much cash at stake-much more than an ordinary small enterprise can lay its hands on-financial institutions have little choice but to be extra careful.

Secondly, although the task of coping with Y2K is detailed and gigantic, it is not all that difficult. Except for a few physical facilities like office elevators, telephones, and security systems, the main work involves computer data systems. The financial industry does not face the same problems with process control systems as in the manufacturing sector, nor does it have the diversity or complexity of equipment that the health-care sector has. Thus financial firms can concentrate their firepower.

In addition, because the financial system is interlinked, and no laggards are tolerated, in general bank information systems have a dual-mainframe design. Besides the operational mainframe, there is always a reserve mainframe standing by for support. Y2K testing can be conducted on the reserve mainframe, so there's no disturbance of normal operations. This avoids the main dilemma facing manufacturers of having to stop their operations now to test whether or not they will have to stop their operations later.

Axis of the money network

Among all of Taiwan's financial institutions, the one that is under the most scrutiny is the one responsible for interbank operations (interbank remittances and cross-bank automatic teller operations) for all 128 banks in Taiwan-the Financial Information Service Company.

Joseph Ho, senior engineer at FISC, explains: "FISC is the exchange center for all interbank flows. If it stops operations or something goes wrong, interbank exchanges will fall into chaos." FISC began taking measures to cope with Y2K in mid-1997. They inspected all 12,000 programs in the system, discovering that about 12% of them were related to the year or date. They spent a tremendous amount of man-hours making changes, bank by bank, spending more than NT$200 million in the process, and replaced and upgraded their original IBM mainframe. FISC has completed adjustments and testing. Moreover, since July of this year, they have opened their doors to all 128 member banks to come in to do testing of their own. (Banks set their own mainframes to a year-2000 date, try a simulated transfer, and see whether the data comes out correct.) As of mid-March, more than 110 banks had conducted tests, and 58 had passed.

"Financial testing is somewhat special. We test all different kinds of simulated transfers," says Joseph Ho. He says, for example, that when they first began testing, they discovered that some programs had not been changed to account for the ROC calendar system. In the ROC calendar 1912 is the Year 1, so to get the ROC year, subtract 1911 from the Western year (e.g. 1999 would then correspond to ROC year 88). In many computers, however, the digits "19" were left off, so that when tests were done for the Western year "2000," the computer subtracted 11 from 00, and got "minus 11"; not recognizing negative numbers, it then decided that the Western year 2000 corresponded to the ROC year 11!

If data with such dating were sent out to participating banks, many calculations, like interest or balance remaining, would be in chaos. Given the volume of work handled by FISC-200,000 interbank transfers and 500,000 cross-bank automatic teller transactions per day-even if only a small percentage of transactions were affected, the result would be disastrous.

Interestingly, seeing as the financial sector is fundamentally a service industry, it is not enough for it just to get its own house in order. If enterprises heavily in debt to banks fold, the banks themselves will suffer. From this year, many banks have begun to consider the client's policies for dealing with Y2K in their evaluation of a loan application. Some major banks have even gone out and offered Y2K consulting services to firms and clients.

As for the stock market, which is the institution of greatest concern to the millions of stock players in Taiwan, according to a survey conducted in February by the Directorate General of Budget, Accounting, and Statistics, 48% of securities firms have completed their countermeasures, 43% are in the testing stage, and only 9% are lagging behind, still making initial adjustments. Meanwhile, the securities dealers' association will establish a Y2K task force to strengthen oversight. No worries?

At the level of the individual consumer, it has been reported in newspapers that the United States Federal Reserve is preparing to print an additional US$50 billion in cash to cope with withdrawals of money by the public. What should consumers in Taiwan do?

"In fact no one needs to worry that the money in their savings account will suddenly disappear," says the BMA's Lin Yung-chien. If the bank makes a mistake, at most it will be in calculating the interest. If consumers are really that worried, there's no harm in keeping all their receipts of deposits, withdrawals, and interest payments, and these can all be fully re-entered at the end of the year.

"However," advises Lin, "please don't everybody rush in on December 31, or the system will break down and that will create a general panic." People need only prepare perhaps a little more cash than they normally would use. If there are a few days when it is really not possible to use ATMs, people could simply go to the tellers inside. If the tellers' computers are also down, then just be a little patient, and you should be able to withdraw your money easily.

The key message is: "Definitely don't all rush out to empty your bank accounts!" Even the best-managed bank cannot withstand a run caused by blind panic among its customers. The result would be "making something out of nothing." This is all the more true as governments overseas have already warned their citizens about the potential security problems of keeping large amounts of cash in the home.

Y2K is a test of the determination and wisdom of all the players in the financial world to work together. While protecting yourself, don't endanger the whole: that's the highest principle.