Is Pakistan prepared to face it?

Jul 21 - 27, 1997

The micro-chip controls when the bank vault can be opened and closed. It allows the vault to be opened during the working week but keeps it closed at weekends and for security reasons it has been burned inside the 20 ton-door of the vault and can only be inspected by removing the whole door.

The bank building has been built around the vault again for security reasons so to inspect or change the micro-chip requires that half the building to be demolished and the door removed.

Something the people who built the micro-chip, the vault and the bank never foresaw will happen on the midnight of December 31, 1999, because the chip has been programmed to read only the last two digits of the year and assumes the 19 prefix. So at the turn of the century when the last two digits read "00", the computer will presume it to be the year 1900. Shouldn't make a difference, except that January 1, 2000 falls on Saturday while the same date in 1900 was a Monday.

The vault opens on Saturday and Sunday but not on later working days, therefore to ensure depositors have access to their depositors, the bank building has to be demolished. The problem does not end there, presenting a matured investment bond to the clerk on the counter for its encashment the computer in turn refuses to accept it because the bond is still 98 years behind schedule.

On the other side of the city, at a pharmaceutical plant hundreds of drums of chemicals were rendered useless by the computer-controlled plant because the expiration dates which were written on the chemical drums as 150902 (September 15,2002) on the drums were taken to be September 15,1902 and therefore the computer considered them to have expired 98 years ago-

These are not paragraphs from George Orwell's '1984' but examples of real problems that arose out of the absence of the two-digit century value within a date that distinguishes dates as either 19s or 20s, a problem which could cost the world between $100 to $600 billion to solve. And it is estimated that between 60% to 90% of all business applications may fail due to this problem by 9999 or September 9, 1999, while the Fortune 100 companies will have to spend between $30 to $100 million each to convert their systems to accommodate the turn of the century.

Computers are used in various aspects of the industry form time schedule to organize buses and trains, making payments, delivery to the hospitals, spreadsheets, word processors, to generate invoices and making slide presentations, to run radio and television network, editing studios, newspaper offices, stock market, to process employment records, medical records, you name it and you have it, "in short the gadget has virtually taken over the running of our lives", as S. M. Hasan of Meher Associates, one of the software houses that is addressing the problem locally puts it.

But unfortunately the two digit date format that simply indicates the year and dropped the century value, this date format is time operated and the clock stops working on the 31st of December 1999 or earlier as some of the chips are dated 9999, which indicates September 9, 1999 as mentioned earlier.

Known as the millennium bomb, the year 2000 or 'Y2K' , the problem was created because of the limitations of earlier technology and the historically higher cost of storing information. In 1993, users were paying about $13.00 per megabyte for disk storage, the same amount of storage cost only $1.50 today, the magnitude of the rate twenty to thirty years ago could be imagined.

In the 60s, the dominant method of entering data into a computer-based system was the 80-column key-punch card, 72 data characters and eight characters reserved for control information. This advocated a data-entry strategy that optimized characters given the limited space.

Early databases were designed based on hierarchical structures and optimized to transaction-based processing so the relative dates of a transaction were stored in the same database record as the other transaction data. This translated into a 2-bytes-per-date savings by not storing the century value when a date was stored.

The problem then spread into application code because applications are designed based on data, and the data was stored without the two-digit century value. Even when organizations migrated to a regional database management system (RDBMS), the date data was not modified to include the century, nor were applications modified or upgraded because of cost. The emphasis was on moving the data to a more-responsive storage management system and not on dates.


It is said that time is the critical factor in the progress, growth and survival of any business organization and if any organization loses track of time it will lead to disastrous results, not only for the bank and the pharmaceutical industries as mentioned earlier.

Plastic money which at present is easy to carry and use is generally computer generated and its date is always in the two digit format.

Talking to different companies, there were different claims by the brands names about the extent of what their computer can or cannot do but as far as the local market is concerned, not all agree that their computer is facing the same problem, but tests conducted by software houses have proved that many computers will simply work out the difference in years between 1999 and 1900 and calculate it to be 99 years.

Even the most advanced computer is only as good as the person or the people who programme it and in many cases it could have been as a thousand programmers, each of them tapping away for several years to create their own tiny part.

Whole computer systems may collapse, leading to chaos in virtually every walk of life, global communications are especially vulnerable, relying on the computer run telephone networks and space satellites, with chips embedded far out of reach. Traffic lights would cease to function and we can all imagine the chaos resulting from that.

All military and aeronautical equipment could shut down because it would appear to the chips that it had not been asked to get things done, at its worst, "the millennium bomb could lead to a modern apocalypse" said Robin Guenier, the man British Government had asked to look into the problems and its possible solutions.

Calculating the age of a person born in 1954 in 1999, the two-digit value applications will calculate the age as 99-54 =45 years, and calculating the same in the year 2000 it will be 00-54= -54 while the correct calculation should have be 2000-1954 = 46, this miscalculation could force a gross number of people into retirement.

Although it is commonly referred to as 'year 2000' problem, it has already begun to have impact on many installations and businesses, any applications that work with age projections or multiple-year offerings will be affected before the time and the crisis will only get worse as the time passes.

It is believed that 20 percent of business applications will fail because of invalid date computations without corrective measures, and this number will increase to more than 90 percent by the year 1999, potentially resulting in the failure of entire companies. Computing 5-year plans are now difficult more than before because the system treats any date beyond 1999 as 1900.

The company affected could suddenly cease to trade or unwittingly trade fraudulently or cause massive consequential damage to its trading partners. Either way, share value will decline and directors may be personally liable for these trangressions. The problem is very serious especially for the banks that invested heavily in computerization in the early 70s and 80s. Airlines operations could suddenly come to a standstill and computer operated traffic signals go berserk.

Other commercial pressures are also forcing executives to treat the millennium bomb seriously, auditors worried by their own legal responsibility to produce 'fair and accurate' reports on clients are increasingly questioning accounting policies. Most of the multinationals are considering qualifying accounts of clients they believe have not got adequate plans in preparation for Y2K.

The credit rating agencies are believed to be looking again at the credit worthiness of companies and a rush of down grades is expected. The insurance industry is bracing itself for a barrage of claims over product liability and directors. Most multinational companies and leading private organizations have already begun to make provisions for the cost of diffusing the bomb,


According to analysts, there is no silver bullet to solving the Y2K problem, there are three possible actions available to address the issue. The first option entails ignoring the Y2K issue by rewriting or developing new computer systems, for small organizations this may make a sense in that they may be able to install newer technologies such as client/server at the same time and better utilize their budget but for larger organizations such an option is not viable because of little time and the tremendous capital expenditure needed to replace all of their systems.

The second possible solution will probably be the likely option for large corporations which have several thousand computer programmes with millions of lines of code. Fixing this code could be a four step process which according to analysts, could be handled entirely by the corporations in-house staff.

The four step process include identifying what the scope of the problem is, planning how to go about fixing the problem and how the repaired code is integrated back into the system with minimal disruption while the third step involves going into the programming code and making all the necessary changes and finally putting the programme in use.

Though most of the vendors here could not quantify the value of the problem in the local market but some analysts indicated that the cost could be half of the total value of the computers in the market today because it is said that departments such as the military, communications and banks that started using the computers in the country still stick to their old systems due to the cost involved.

According to British estimates, the cost of diffusing the bomb in Britain alone is said to be more than 31 billion Pounds sterling while the expected cost to fix the problem, both in the hardware and the software, has been estimated to be between $100 and $600 billion worldwide.

The average cost to fix Y2K at a mid-sized company is estimated at $3.6 million to $4.2 million, while at a large corporation it is estimated at approximately $40 million and higher.

On average it is estimated that an application development organization will spend $1.10 per line code to analyze and correct the Y2K problem. Translated this means that, for a shop supporting a modest 50,000 functions points implemented in COBOL (which equates to roughly 5 million lines of code), $5.5 million will be spent on a Y2K project.


Up till now, little revenue as been generated by the service firms able to fix this problem, however this trend is expected to experience a dramatic change as the final countdown draws near.

According to a study in the UK, some freelance computer experts are now hiring themselves out to companies for more than 1,000 Pound Sterling a day.

Information Technology (IT) specialists who as little as two years ago were regarded by their colleagues as 'background herds' are now enjoying startling salaries of 50,000 Pounds Sterling and their image has been transformed all of a sudden. Most of IT companies have increased their staff by 30% in the United States over the past nine months

With a skills shortage in the sector all over the world, the pressure on salaries and hourly rates is expected to grow manifold.

It is reported that listed British companies which provide computer software and IT services are now making hay. Shares of Parity, a British IT companies, have reportedly soared from 179 pence to 537 pence during the past twelve months, valuing the company at more than 220 million Pound Sterling.

Local computer executives admitted that more and more of their revenue is now being generated from tackling the Y2K problem while bigger companies now turn to their suppliers to see if their computers are compliant when the clock changes.

There are lots of web pages now soliciting for both staff and contract while numerous books have been published over the past two years on the subject. More of these books could be seen at www.y2k-main.html or

Local Market

Some analysts are of the opinion that the effect of Y2K will be very low in Pakistan because of the low dependency on automation while others are saying that the effect might be disastrous here especially because of the casual attitude people have towards such problems, " the attitude of Insha Allah we'll see when it comes" may not work this time, Farid a consultant at a software house warned.

Realising the importance of the issue both in terms of averting a disaster and generating revenue from exports of human resources, the President of Pakistan chaired a three-hour meeting on the 3rd of this month at the Presidency, where all the heads of major computer companies and IT services in the country were reportedly invited and a special task force for the Year 2000 was formed.

Sources close to the event said that the main objective of the meeting is to look at the possibility of exporting human resources in this field.

According to Syed Asim Zafar, the personnel required to solve these problems do not necessarily have to be professionals, trainees from private computer institutions could do the job as well, but the problem being faced by the market at present is that most of the trainees of these institutions are not trained for the specific language in which these dates were written three decades ago.

According to analysts, the main revenue will come from the manpower and not the software, the problem seems to circle around the middle range machines in the local market which are mostly IBM AS400. Ferial Saleh of IBM said the company had already introduced the tool to the source code for changing the date.


PAGE conducted an on-the-spot survey to find out howprepared we are to cope with the problem. Two hundred people were questioned, one hundred from the computer related companies while the other hundred people were from different cross-sections of the society including bank officers, business school students, doctors, motor mechanic, businessmen, drivers, journalists etc.

The question asked simply from every one was "what do you know about the millennium bomb?", and "what is your organization doing about it?"

While over seventy people from the cross-sectionional survey admitted to have read, heard or saw something about it somewhere it is amazing to note that less that thirty people from other group, the computer related ones, knew something about millennium bomb.

To prove this, PAGE visited some of the major computer companies as well as the vendors and some software houses in the city, and with the permission of the heads of these organizations, these questions were posed to the staff at these organizations.

According to one of the middle level managers of one of these organizations who spoke to PAGE on condition of anonymity, the reason why most of the middle and lower level staff of these software houses are not aware of the problem "because these (the lower cadre staff) are the people who will be sent out to do the job therefore the management prefers to keep them ignorant of the gravity of the situation, lest they charge them according to the size of the problem.

Most of the companies that use computers who spoke to PAGE on the issue expressed the same casual attitude of waiting till the time comes, proprietors of two private colour photo laboratories said they knew about the problem and agreed that it will affect their machines but they are still waiting till it is officially announced that the problem is here.

On the other hand, the spokesman of ABN Amro said that the bank had started doing something about the problem and had set the target when all its computers and software will be made 2000 compliant for June 1998. Others like Citibank, National Bank and PIA said they have started doing something without specifying what exactly are they doing about it.

Ferial Saleh of IBM on the other hand said that the corporation has initiated a series of workshops and seminars at its education centre in Karachi to educate the participants about Y2K.

According to S.M.Hasan, to avert the disaster, checking up of all the computers in the system is a must.