NEW YORK -- While much of the world is bracing for the worst come Jan. 1, 2000, some investors, government agencies, and nonprofits have already begun to look beyond the crisis to a potential financial windfall.
Economists are calling it the "Y2K dividend," and it may be the biggest cash influx to the global economy in decades. PaineWebber's chief strategist, Edward M. Kerschner, predicts that the greater information-processing capabilities resulting from Y2K-related computer upgrades will lead to substantial boosts in productivity around the world.
According to Stefan Blauberg, chief economist at the forecasting firm Standard and Poor's DRI, expects the Y2K dividend to arrive after an initial recessionary hiccup. "By 2004, we should begin to experience the first signs of a renewed boom that is largely the product of today's Y2K spending."
Some analysts predict the U.S. government will snare the largest share of the Y2K dividend, citing a broader tax base and even a few proposed tax increases. A bill introduced in the Senate earlier this month pegs a 4 percent increase on federal public works spending to the arrival of the Y2K boon.
But any Y2K-funded measures are going to have to pass muster with Silicon Valley interests who believe they are, in large part, responsible for the Y2K dividend.
"The computer industry is bringing in this money," says Andy Etheridge, a lobbyist for high-tech firms, "and they want to make sure it is not spent on programs that would hurt the competitive edge the U.S. has when it comes to high technology." Etheridge believes the Y2K dividend should be reinvested in telecommunications and education rather than expanding "already bloated social welfare programs."
The debate over how to spend the Y2K dividend may get even more contentious as nonprofits enter the fray. The United Nations, for example, is advocating that resources generated by Y2K preparations be plowed into what it calls the next Y2K disaster: the AIDS/HIV epidemic in Africa.
In a report issued to coincide with media coverage of Y2K, the U.N.'s commission on AIDS dubs the virus "the next millennium bug" and calls for emergency action on the level of current Y2K efforts. Of the 23 million people living with HIV/AIDS in the world, nearly two-thirds, almost 14 million persons, live in sub-Saharan Africa.
"Having averted financial catastrophe due to a computer bug," urges Albert Achebe, an economist with UNAIDS, "we must now focus on the imminent disasters that will be caused by the biological threat of HIV infection."
UNAIDS estimates that the epidemic will set back development efforts on the African continent by 100 years, incurring significant costs to international financial markets.
Despite such dire predictions, Paul Borsic of Harvard's Kennedy School of Government doubts the Y2K dividend will end up being spent on a foreign social cause regardless of its financial implications for the U.S.
"The high-tech sensibility is extremely solutions-oriented," argues Borsic, "so if they have any say in the matter, which they will, it stands to reason that the funds will be spent on creating new tools rather than solving age-old problems."
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