-Caveat Lector- Paris, Friday, January 7, 2000 A Third World Suspicion: Was Y2K Bug a Hoax? Costs Criticized but Upgrades Are a Benefit ------------------------------------------------------------------------------ -- By Anthony Faiola Washington Post Service ------------------------------------------------------------------------------ -- BUENOS AIRES - U.S. computer experts predicted widespread blackouts in Argentina with the turn of the year. And so Mariana Gonzalez fumed as if the practical joke of the millennium had just been played on her as she stood on a Buenos Aires street corner under the glow of vast electric billboards. They have not even flickered in the days since the calendar turned to Jan. 1, 2000. ''We're a country that can't afford to waste money, and that's just what we did with this hoax!'' said Miss Gonzalez, 36, who was peddling cheap calculators and talking about the estimated $1.5 billion spent in Argentina for Y2K readiness. ''We can't feed our families, and we spent millions on a sham to make foreign companies rich.'' She is not alone in her dismay. The money spent on updating computers is drawing widespread popular outrage here and in many Third World nations. Suspicions of overspending on the Y2K bug that never materialized are increasing with every day that passes without a computer breakdown. ''So, what was all the fuss about?'' asked David Higgins, the Sydney Morning Herald's Biz.com editor. He added, ''Can we get a refund?'' But Victor Guerrero, technical secretary of the National Commission for Y2K Information Conversion in Mexico, looked at the expenditure of $6.5 billion by his country's public and private sectors in a different light. A report from the U.S. Senate Special Committee on the Year 2000 Technology Problem predicted last summer that a third of Mexico's computer systems would crash, but in fact the first days of the year have been largely glitch-free. That makes the expense well worth it in Mr. Guerrero's eyes. ''We had to take the problem seriously, and we've come out on top,'' he said. ''The quality of equipment and infrastructure has improved, and more companies are now using computers as a result of this experience.'' As early reports indicate that nothing approaching the widely predicted doomsday in Latin America or the rest of the developing world came to pass, Miss Gonzalez and Mr. Guerrero personify two emerging schools of thought about Y2K fever: - One. That a passel of technology companies and consultants, perhaps for profit, overestimated the potential repercussions of the bug, encouraging governments and businesses to spend scarce funds and manpower. A posting in a chat room run by SinaNet, one of China's biggest portals, said, ''Counting money with both hands, the American bear laughs a good laugh.'' - Two. That concern over the bug gave the developing world a good reason to upgrade technologically outdated systems, providing a vital advance into the computer age. In fact, advocates say, the Y2K craze, even if overstated, became the force that kicked small nations into high gear during the last part of 1999, spurring them to make the changes that prevented big problems. ''Should they have spent less? I don't think so,'' said Lee Tablewski, a senior research associate at the University of Miami's North-South Center, who monitored Y2K readiness for the Americas. ''There will be a Y2K dividend for Latin America,'' he said. ''Because they've done a good job of fixing utilities, improving government databases, those kind of emergency management systems will be better prepared for the future.'' Rightly or wrongly, however, many fingers are pointing toward governments and technology companies in the United States and Europe for generating what is now taken to be hype. ''You Americans were too paranoid about this from the beginning,'' said Alejandro Prince, director of the Buenos Aires-based economics and technology consulting firm Prince & Cooke. Mr. Prince conducted extensive research on Y2K problems in Argentina and had long played down the severity of the risk. ''It's just like when you all jog around with your natural, purified, filtered spring water for your good health,'' Mr. Prince said. ''Americans go overboard on everything. We knew there could be problems, but there was probably more pressure from U.S. and European consultants and governments than was warranted.'' China's banking sector spent about $1.25 billion in dealing with Y2K issues, which pales in comparison to figures in the West. Overall fixes in the United States alone cost an estimated $100 billion, but many of China's banking functions are not computerized, labor costs are low, and China often solves problems with ''human wave'' tactics instead of high technology. In Argentina, which has Latin America's highest per capita income and is one of its most technologically advanced nations, high-tech companies experienced a major windfall in 1999. In a year when GDP fell by almost 3 percent and industrial output was down sharply, spending on technological products and services soared 10 percent. The private sector spent an estimated $1.3 billion on Y2K bug adjustments, while the government spent another $150 million Several major foreign companies - which officials declined to identify - submitted bids of $7 million to $15 million to debug the computer system at Argentina's National Social Security Administration, which has more than 4,000 computer terminals and 10,000 users. An auditor at the agency reviewed the proposals, rejected them and hired a local agency for a light touch-up that cost $2.7 million. To date, no Y2K problems have emerged at the agency. ''I don't think there's any question that some foreign companies tried to make a buck off us,'' said Leandro Popik, the public action subsecretary, who leads Argentina's Y2K task force. Latin American representatives of U.S. high-tech giants dismissed such ideas. ''We think it was a serious threat, and it was a three-year job, but we tackled it and prevented something big from happening,'' said the Microsoft Corp. spokesman in Latin America, Leonardo Ortiz. ''Y2K was not a revenue generating opportunity for Microsoft.'' DECLARATION & DISCLAIMER ========== CTRL is a discussion and informational exchange list. Proselyzting propagandic screeds are not allowed. Substance—not soapboxing! These are sordid matters and 'conspiracy theory', with its many half-truths, misdirections and outright frauds is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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