No, GTAIII was set in 2001. Before the game was released, R* said this. In magazines, it says this. It probably does in game as well, probably at the start but I can't remember. Rockstar also said that Liberty City Stories will take place three years before GTAIII. Do the math, three years before GTAIII, that's 1998, so we know from this that GTAIII's events took place in 2001.