In the summer of 1998 the United States is the world's only
super-power. The end of the Cold War has brought a dramatic rise in the
number of countries moving in the direction of democracy and free
enterprise. The United States, reluctantly, is the world's leader in
dealing with trouble spots such as Bosnia and the Middle East. Although
support for U.S. initiatives is far from unanimous, in general the U.S.
can, when needed, call upon a large number of friends and supporters
around the world. This key element in the environment of U.S. foreign
policy may change in coming months as a result of the year 2000 computer
problem.

The year 2000 computer problem is the seemingly trivial technical
problem caused by the fact that for years computer programmers have
abbreviated four digit dates to two digits, for example 1998 to 98. If
conversion to four digits had begun in earnest in 1990 or even in 1995,
the necessary changes could have been made as part of a normal process of
modernization. Unfortunately, this has not happened. Some governments
and businesses are just now waking up to the danger, and in some countries
there is virtually no discussion of the issue.

The danger is that if hardware and software is not repaired prior
to the year 2000, the infrastructure that modern societies rely upon will
fail. At risk are electric power grids, the telephone system, water
purification plants, nuclear power plants, chemical processing plants, the
banking and securities industries, insurance, manufacturing, etc. All
current estimates say there will be some disruption. No one knows how bad
the disruption will be. Simultaneous infrastructure and business failures
worldwide is not a problem we have encountered before. What we do know is
that technical experts working on the problem are much more concerned than
business and political leaders and the general public.

Some countries are more advanced in making repairs than other
countries. The U.S., the U.K., Canada, Australia, New Zealand, and the
Scandinavian countries have the most active repair efforts. Continental
Europe is preoccupied with the rapidly developing European Union rather
than the year 2000 computer problem. Asia is distracted by its financial
difficulties -- large foreign debt, currency devaluations, and rising
interest rates. Latin America and Africa are even farther behind.

Senator Robert Bennett (R, Utah), head of a US Senate special
committee on the year 2000 problem, has predicted that y2k (a short-hand
designation for the year 2000 problem) will lead to the largest wealth
transfer in history, from non-compliant firms and countries to compliant
firms and countries. The Gartner Group has recently reported that 8% of
German companies have a year 2000 plan vs. 80% of U.S. companies.

At the present time the U.S. is regarded as the technological
leader. People around the world look to the US to learn what is happening
in technology. A computer scientist in Bulgaria who has tried to arouse
interest in y2k among government officials and businessmen reports little
success. They reply, "We do not understand what you are saying. If there
is a problem, the Americans will tell us. And if it is a problem, the
Americans will tell us how to fix it." I heard similar statements during
a recent trip to Turkey.

I think it is reasonable to ask who will be blamed for the
disruptions caused by y2k. If many firms go bankrupt, and many people
become unemployed, people will be upset. If Americans become more
wealthy, relatively, because equipment made largely in the U.S. fails,
will conspiracy theories arise? When people are cold, hungry, and
unemployed, they will look for scapegoats. Will Americans be on the list?
I think they might be.

My conclusion is that it is probably too late to reverse the
general pattern. There WILL be a massive transfer of wealth to the more
prepared firms and countries. Our current friends in small countries WILL
be disappointed and angry with us. U.S. military capability in the spring
of 2000 WILL be greatly reduced. The Department of Defense has reported
that one third of its mission critical systems will be ready in January
2000. That means that two thirds of its mission critical systems will not
be ready.

What can be done now? I think that several actions are needed.
First, the U.S. should adopt a program of international awareness-building
and technical assistance. The program could be thought of as similar to
the Marshall Plan, except for the whole world. Second, U.S. government,
military, and corporate dependents should be sent home for the holidays in
December 1999. This would reduce the number of people the U.S. military
may be asked to defend. Third, countries should begin now to position
relief supplies. Where will people go if they lose power, heat, and/or
water? We should stockpile water, food, and fuel around the world. In
January 2000 relief activities will probably be focused on local needs.
Coordination and movement of supplies over long distances will probably be
very difficult.

If events unfold approximately as described above, what will the
political climate be after January 1, 2000? There may be demands for an
international redistribution of wealth to restore in part the previous
status quo. If this is judged to be politically necessary, it is not
clear now how this redistribution might be carried out. If governments
are not able to make payments because their computer systems fail,
confidence in the idea of a "welfare state" may be dramatically reduced.
Confidence in the US as an international leader may be reduced, or
increased if we act decisively now. Support for US initiatives in the
United Nations may be weakened. Inside many countries there may be
increased attacks on minority groups as people search for scapegoats.
Within the intellectual community the gap between technologists and
humanists may widen. Technologists will point to the internet as a sign
of progress while humanists will point to the disruption caused by the
year 2000 computer problem.

In general y2k may lead to foreign policy difficulties for the
U.S., and the number and severity of conflicts within and between
countries may increase.

---------------------------