Issued by: Ministry of Post, Telecommunication & Broadcasting
BY JAY NAIDOO Minister for Posts, Telecommunication & Broadcasting
Johannesburg, Monday, 1998-08-17
INTRODUCTION
Yesterday while I was driving in my car, a heard a radio journalist on Safm describe the Millennium Bug - which is commonly referred to as Y2K as "the most dangerous formula ever since the creation of the formula for the nuclear bomb".
Why is it dangerous? Because without addressing the problem in a wholistic way - and by that I mean everybody concerned - socety as we know it could disintegrate.
These may be strong words, but they are necessary. Consider this:
An average person probably interacts with at least 100 pieces of equipment or services which are controlled by computer chips. This could be anything from cars, trains, planes, banking and medical services and phones to manufacturing equipment, electricity, water, computers, elevators, alarm systems and so on.
A survey recently completed by the Year 2000 National Decision Support Centre - which falls under the auspices of my ministry - showed that.
While South Africa was only 17,6% overall compliant, it is one of the leading countries in the world in terms of its Y2K programme awareness and implementation;
While the financial services sector was advanced with its Y2K programmes (being almost 40% compliant currently), other key sectors are serious lagging behind (SMMEs are around 30% compliant; information communication technology sector (ICT) and industry are less than 20% compliant);
That around 65% of local authorities, 60% of large organisations and just more than 45% of government departments have Y2K budgets;
That while most government departments, local authorities and large organisations have adequate action plans, local authorities and government departments have inadequately skilled project teams to implement the plans.
A report by the Standing Committee on Public Accounts =96 tabled in Parliament earlier this month and scheduled to be debated tomorrow (Tuesday August 18) - estimates that the cost of Y2K compliance to the South African economy is between R21 billion and R30 billion.
NO WINNERS AND NO LOSERS IN Y2K RACE
Overall, we are all in this together. There are no winners and losers in this race. In fact, there will only be losers if everyone doesn't do their bit.
The major areas of concern are government (especially local government and national departments) and small and medium-sized businesses (SMMEs).
At preset only two government departments are currently fully compliant - the Deputy President's Office and the Department of Labour, according to the report of the Standing Committee on Public Accounts.
SMME seem to be underestimating the extent of the problem themselves. They make up the bulk of the GDP of the country's economy - 800 000 - and contribute 33% of the country's GDP and are responsible for 44% of private sector employment figures. At present only around 30 000 SMMEs are ready for Y2K - cause, I am sure you will agree, for concern.
GOVERNMENT'S ROLE
Government's role is to monitor the situation and raise awareness. Where we can take further action, we have. In June this year, Cabinet approved recommendations to
Introduce anti-dumping legislation for non-Y2K-compliant equipment and software; Declare of August 19 - this Wednesday - as National Y2K Awareness day, 500 days before January 1, 2000;
Convene a meeting of all national and provincial directors-generals by the Deputy President's Office to ensure implementation of Y2K programmes in government;
Draw up a six phase action plan to ensure total readiness by the Year 2000 for 68 "mission critical" systems within government (such as pensions, examinations, housing subsidies, transport, UIF payments, and population register)
So, government is doing its share. But industry sectors and business must do the work themselves, and they must allocate the resources to do it. The only other area that government could still contribute to is that of training. But even with that, we need financial assistance from the private sector.
In fact, we need funding pledges from business to concretise an agreement the National Year 2000 Decision Support Centre has just concluded with the University of Maryland in the US to train "bug-busters" in South Africa.
In compliance, the Department of State Expenditure is ranked among the best government departments in terms of compliance at the moment. The Gauteng Provincial Government's efforts in implementing a Y2K programme are commendable. Not only are they sorting out their systems, they are also assisting more than 54 other key local authorities in the province in co-operation with the National Year 2000 Decision Support Centre.
It is certainly the furtherest ahead in terms of compliance among the more than 800 local authorities in the country
HOW IS BUSINESS DOING WITH Y2K COMPLIANCE?
Big business, particularly the financial sector, is well advanced in implementing Y2K programmes. Companies who have been exceptional in implementing Y2K programmes are most banks, Woolworths, Unilever, Eskom, Goldfields, Safmarine and the Airports Company and Sasol, to name just a few.
The Johannesburg Stock Exchange has been particularly co-operative with the National Year 2000 Decision Support Centre and its own programme is well on track and they don't expect any Millennium bug problems to affect them. I understand they have asked all companies listed on the exchange to report on their Y2K state of readiness with their quarterly and annual results. This will become compulsory from the end of this year for all companies trading on the Exchange.
WHAT CAN BUSINESS DO TO SUPPORT SA'S Y2K PROGRAMME?
Lack of resources is the most serious problem we have in South Africa today with regard to the Y2K problem.
Today I would like to make a special plea to businesses to pitch in to the fray and offer resources to sectors which are lagging. And this, I might add, is no time to plead poverty!
The resources need not only be money. It could be expertise and advice. In fact, the latter two resources are particularly needed by local authorities who are at the bottom of the log in terms of Y2K compliance. If they are not ready in time, it will affect communities and these communities are customers of business.
So what can companies do? They can Pledge Resources. Contact the Year 2000 Decision Support Centre and co-ordinate with them. They need project management expertise, hardware and software specialists and funding.
Think Local. Make enquiries with your local authority and see what kind of assistance they need. It may be something as simple as structuring a contract to do Y2K work, or just advise on what to do
Raise Awareness. It is crucial for business to assist us in our awarness campaign because the National Year 2000 Decision Support Centre simply doesn't have sufficient funds. You can put the Y2K toll-free number or the Y2K logo on your advertising. Do joint campaigns with the Centre. Or simply donate funds to Centre's advertising budget.
We want to do a mailshot to each of the 15 million households in the country to explain what ordinary citizens must be doing. To do that we will need at least R15 million. The United Kingdon's Y2K Centre is to spend 22 million pounds (about R240 million at today's exchange rates!) to do two mailshots to every citizen as part of its Citizen's Awareness Campaign. The purpose is to stop people from panicking and doing things like withdrawing all their money from banks.
We feel that a TV campaign is essential in raising awarenss. But, as you all well know, TV advertising is expensive. I would like to appeal for support in this as well.
Provide Expertise For Simulation Exercises. In 200 days, the National Year 2000 Decision Support Centre will begin with Millennium bug simulations in all sectors (retail, mining, manufacturing, financial services, transport and so on) to test compliance. We need business to help co-ordinate their sectors and to provide expertise to stage these simulations.
WHAT ABOUT THE INTERNATIONAL PICTURE?
While we are pulling up our bootstraps and getting Y2K programmes in place, among all sectors in South Africa, we cannot do so without looking at the global picture.
The reality is that if South Africa is not Y2K compliant in time, it could be downgraded as an investment option. After the year 2000, investment will go to those countries which are millennium bug friendly. This is an issue which will affect every company with foreign interests.
For example. The head of the United Kingdom's Y2K taskteam recently visited some G7 countries and found that Japan and Germany were lagging far behind other European countries in Y2K compliance. It seems that Germany only recently began to pay serious attention to the Y2K problem Now consider this: Germany is Europe's biggest economy and one of South Africa's biggest trading partners. Take a moment to think about the implications of not being Y2K compliant in 500 days time!
There is a significant role for companies to play in the region. At present only South Africa and one other SADC countr have Y2K plans. Of all the SADC member states, only South Africa is implementing a programme to ensure Y2K compliance. I would urge companies to send information and make enquiries with their regional offices or regional trading partners to see what assistance can be rendered to ensure Y2K compliance by all SADC countries on time.
IN CONCLUSION
On Wednesday this week it will be National Y2K Awareness Day, signalling that there are just 500 days left to the turn of the Century. That's not a lot of time given the amount of work that still has to be done.
I want to appeal to business to go into partnership with us in preparing ourselves fully for the Millennium Bug and for the National Awareness Day.
Your support is essential to the success of the Y2K programme and the future of our country.
Thank You.