Just last year, you were addressed by the hospital’s directors about the importance of doing what was necessary to prevent the crisis from becoming any worse.

In this situation, you simply realize that another misdiagnosis or death of a patient will trigger a catastrophic crisis of confidence in the hospital. People around the city will lose faith in the hospital and will not come for treatment any more. Your own patients could move to another hospital.

Eventually, as the hospital loses profit, the worst thing that could possibly happen is that your
workplace will go bust and you will end up derided by the hospital’s directors for your lack of competence in handling the hospital’s management.

You can only hope that you will not get entangled in such circumstances — yet what happens next doesn’t really align with that expectation of yours.

One day, a nurse runs all the way through the hospital corridors to your office to bring you urgent news that a male patient is dying and you need to make a swift decision about his treatment. The nurse presents you with all the options available, as well as her advice:

You can cure him with a remedy. Unfortunately, after diagnosing his symptoms, the price of the proposed remedy is astronomical since it is Rp 6.7 trillion worth and, because of some hospital insurance policy, it is the hospital, not the patient, who has to pay for the whole treatment.

You can just let him die. But the nurse reminds you that the whole hospital is overwhelmed by a crisis of confidence at the moment and, if you let him die, there is a possibility that no one will come to your hospital any more and patients in the hospital are likely to move to other hospitals. Choosing this option will save Rp 6.7 trillion, but puts approximately Rp 1,900 trillion of hospital money at risk.
You can reduce the impact of the crisis of confidence by applying blanket guarantee — a hospital policy which ensures the life of all patients inside the hospital — and then let the patient die.

Unfortunately, the nurse informs you that the deputy executive director of the hospital is renowned to be greatly opposed to a blanket guarantee policy. This option is simply not feasible since he will surely overrule the policy if it is implemented.   

The doctor in this story, Sri Mulyani Indrawati, ended up choosing the first option among the three options available.

And she, with the advice of the nurse (Boediono), eventuallydecided to inject a lavish remedy worth Rp 6.7 trillion, in the form of a bank bailout, into the patient, Robert Tantular and his ailing Bank Century.

One year later, instead of thanking her for preventing the hospital from collapsing, the hospital’s directors (the House of Representatives) furiously point their fingers at her and her partner Boediono as they think the costly remedy was not actually necessary.

Rather than being recognized as heroes who secured Rp 1,900 trillion of hospital money, both the doctor and the nurse are considered to be the perpetrators who caused the hospital to suffer the great loss of Rp 6.7 trillion.

The hospital’s directors are also of the notion that the theory of deeming the patient’s death as generating greater losses to the hospital was completely baseless, while both the doctor and the nurse think otherwise.

Now, who’s right and who’s wrong?

The lingering debate of the Bank Century bailout is always about whether the bank posed a systemic threat or not if it had gone under. Initially considered as a necessary policy to be implemented the moment financial crisis looms, the bailout later turns into a complex twist of controversy.

Many people argue that both the doctor and the nurse, as depicted in the hospital analogy, should have taken the second option and let the patient die instead of giving him such a costly remedy.

The fact that even Sri Mulyani and Boediono could not present any solid proof whether the collapse of Bank Century would have caused a run on the bank among Indonesian depositors — whose money in the financial system has accumulated to the level of Rp 1,900 trillion — is unassailable.

The calculation of the possibility of a possible crash in Indonesia’s financial system, however, comes mostly from the intuition of both those technocrats themselves.

But, because people’s physiological levels are difficult to measure (especially during a crisis period
as people become more volatile), there is also no solid proof that such a panic and bank run will happen or not.

In fact, the argument of saying that “Bank Century would not have posed a systemic threat” comes from the intuition and somewhat one-dimensional analysis of the critics and opposition to the Rp 6.7 trillion bailout.

In economics, the expression of every argument always has to be supported with solid data — so does every argument in the debate to judge whether the Bank Century bailout was necessary for Indonesia’s economy or not.

So far, the only solid data which we have now is that Indonesia, with the various economic policies that Sri Mulyani and Boediono implemented during last year’s hard times (including their decision to bail out Bank Century), successfully managed to weather a financial crisis that saw many countries’ economies slumping to their lowest level.

Thus, based on the data of our various bright macroeconomic indicators we have at the moment, we have absolutely no proof that the government’s decision to hand the bailout to Bank Century was a wrong one.

And when you argue that something is wrong but you cannot prove it, you cannot really say that it
is wrong.

As no one has any proof indicating what they did was wrong, Sri Mulyani and Boediono surely did not deserve what they encountered few days ago.

Besides, up to now they have always done things right: It is all because of their economic proficiency and decisive actions that our economy is still standing tall at the time when most of the economies in the world are engulfed in a calamitous recession.

Instead of receiving blistering words from the House members and several universities’ so-called activists, in fact, they should have been given credit and praise for all their hard work.

If only the Bank Century inquiry committee members — as well as the university students who humiliated Sri Mulyani and Boediono by referring to them as thieves — really understood the situation these policymakers were in at that time and the trade-off needed.

Talk is cheap, but if they were the decision makers, would those university students and Bank Century inquiry committee members have had the guts to use Rp 6.7 trillion to allay the risk of putting Rp 1,900 trillion in jeopardy and of wrecking the entire Indonesian economic framework?

And before they deliver their answer, it is better to remind them that when they make the decision, it’s the lives of 200 million Indonesians which they are putting at stake.


The writer is a student at the University of Indonesia’s School of Economics.

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