DEUTSCHE Morgan Grenfell says Indonesia could become 'Asia's Yugoslavia' by disintegrating into warring factions. The company's United States chief, Edward Yardeni, also said the global economy would slip into recession within 18 months. 'Such a worldwide recession could last at least 12 months, starting in January 2000, and it could be at least as severe as the 1973-74 global recession,' he said. The collapse would be triggered by computers crashing on January 1, 2000, when the new year appears as '00' and would be read erroneously by the computers as 1900. 'Even if only a small percentage [of systems] fail, the resulting disruptions are bound to cause some trouble, and worse if the minority of non-compliant systems have an adverse domino effect on compliant ones,' he said. According to a recent survey, about 50 per cent of US banks are halfway through fixing their year 2000 problem, compared with only 5 per cent of large overseas banks. 'The problem is both trivial and overwhelming at the same time. The 1973-74 recession was caused by the Opec [Organisation of Petroleum Exporting Countries] oil crisis, which is a useful analogy for thinking about the potential economic crisis of 2000. Just as oil is a vital resource for our global economy, so is information. If the supply of information is disrupted, many economic activities will be impaired, if not entirely halted.' He denied the claims were alarmist and said major US government departments, including the Internal Revenue Service, had identified the issue. Mr Yardeni, a former economist for the Federal Reserve, said the US and European economies would continue to post strong growth for the remainder of the year. He said it would be a 'horrible year' for most of Asia but China, seeking to fill the regional leadership role left vacant by Japan, would not devalue. Fears of 'worsening the Asian calamity' would preclude the Federal Reserve from raising interest rates next week. 'The last thing Asia needs is a global recession in the year 2000. A very significant global recession in Asia will be pretty close to disastrous. But the economies will start to recover in 2001. If it was not for the 2000 problem, I would be very optimistic.'