Century and The Case of Financial Globalization

CASE flushing the funds to Bank Century a few years ago become a problem on this day. Special Committee (Committee) was formed in parliament to determine whether there is a mistake in granting relief in respect of banks or not.
One reason why the government offered them to give aid is going to the occurrence of systemic effects of Indonesian economic system if not assisted Century Bank-a situation which may invite such an economic crisis in 1997/1998. The question is, is it?. To answer the question
is not easy. This needs to be examined in depth. Therefore, do not be surprised if the committee Century Bank invites many parties to answer.
However, in this narrow space the authors try to explain it (maybe also answer it) in a different perspective with the road taken by the committee Century. This becomes important because of polemic and con-troversinya elusive.
Systemic financial problems that impact on a country is a result of the implementation of neoliberal understanding, especially financial globalization in a country. Financial globalization is part of the process of change in modern international financial system, which originated from the gold standard system and then moved to the Bretton-Woods system, particularly since the trial that gave birth to the Bretton institution the International Monetary Funds (IMF).
In terms of international payments is closely related to financial globalization, the IMF was the one who has changed the fixed exchange rate system into a system of managed-flo
Ating exchange rate. A floating exchange rate system is no longer based on gold standard. Not only that, the IMF also change menjadi/ree/7oafin7 exchange rate system.
Financial globalization and changes in the international payment system is what has opened up opportunities for instability (a) system in a country’s economy. Moreover, the two mechanisms, “managed to” eliminates possessed comparative advantage of each country. This is because dibelenggunya comparative advantage by the competitive advantage held by developed countries (Stiglitz 2002).
As a result, the world economy more sensitive to the phenomenon that is not linked directly with him. The case was jungkalnya economic performance of several Latin American countries in the 1980s and early 1990s, as well as bad experiences from 1997 to 1998 in Asia, including Indonesia, demonstrate this phenomenon (see Figure 1 for the case of Asia).
Beneath the financial crisis that struck the countries of Latin America and Asia, in respect of those years, did not rule had been used (if you do not want to say exploited) by the IMF to extend the performance of
implementing the Washington Consensus. This is an economic policy that consists of a tight fiscal policy, privatization, and liberalization of markets-that is essentially the world’s financial liberalization.
The process of financial liberalization by the IMF since the 1980s it received support from the World Bank under the leadership of William Clausen and Ann Krueger, known as an expert in international economics. Clausen and Krueger argue, international trade-through-globalization and financial liberalization is the best solution for the problems faced by the (average) of developing countries.
This view is in line and a moment with the recommendation of former U.S. President Ronald Reagan and former British Prime Minister Margaret Thatcher, who very actively voicing the ideology of free market (neoliberal) in the 1980s.
Speed the development of globalization has led to the financial markets become increasingly liberal. This then causes the flow of capital in the form of portfolio investment to developing countries increasingly (and more), large (see Figure 2).
Before the process of globalization and financial liberalization, most of the current
international capital flows to developing countries, particularly the industrial sector and infrastructure development of the agricultural sector. However, now the capital flows that has penetrated into all sectors.
The impact, after globalization and liberalization (market) a successful financial implanted IMF, World Bank, and developed countries-mostly in the form of capital flows of portfolio investment and bank lending (it seems) the economy in developing countries increasingly easy to fool and subdued. Consequently, periodic economic crises can easily be created in the economic system in developing countries (including Indonesia).
Therefore, do-je-ngan, Century Bank case is not like what is alleged by some members of parliament ki-ta (funds provided by the government exploited a particular political party for the sake of his campaign before the 2009 General Election, although it is possible for it). However, the case is indeed a result of globalization and financial liberalization (read liberal) who are we run.