Is the millennium bug just an oversized flea?
WORLD economic growth may shudder to a halt, or worse, if the millennium computer bomb is not defused in time.
That is the conclusion of many economists, who fear that as clocks tick past midnight on December 31, 1999, computer failure at utilities, banks, governments and telecommunications centres may cripple economies across the globe.
Dr Ed Yardeni, chief economist at merchant bankers Deutsche Morgan Grenfell, believes that the shock to the world economy may be worse than the recession in 1973 and 1974 which followed the Opec oil price hike.
"I'm raising the odds of a severe global recession from 60% closer to 100%," Yardeni says.
Last month, the Group of Seven leading industrial nations and Russia declared at a meeting in Britain that the millennium bug presented a major challenge to the world's defence, transport, telecommunications, financial services, energy and environmental services. The politicians called for action, but did not announce any.
But not everybody believes that the world faces a crisis.
In a recent letter published in the Wall Street Journal, Jeff Carlock, systems analyst for the San Francisco Chronicle and Examiner newspapers, said experts like Yardeni were feeding ill-informed public hysteria.
"This problem has been greatly exaggerated by consultants with a vested interest in scaring their clients into spending as much time and money as possible (on their computer systems)," Carlock said. "It (the millennium problem) will be a minor nuisance, not a catastrophe."
New York stockbrokers Paine Webber Group Inc said in a recent report a Year 2000-inspired recession was unlikely in the US. Glitches might seriously disrupt economic activity, but it was difficult to see the US economy slumping into a downturn. - Reuters.