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Jakarta Post

Early warning systems and politics of fear

  • Jonatan Lassa

Bonn   /   Mon, January 25 2010   /  11:01 am

The proponents of the decision of the Bank Century bailout are happy with the explanation that “the benefit of the intervention is the crisis that did not happen until now”. In other words, had there been no intervention or confirmed response to the indicated crisis, the risk would’ve been that the crisis may have happened today at an unexpected scale.  The above argument raises concerns from the proponents and opponents of the policy. It is controversial simply because there are risk and uncertainty in both action/inaction to the crisis – which is largely underestimated by both camps. Therefore, one should understand how decision making among high levels of uncertainty, especially when the ghosts of the 1998 financial crisis dominated the perception of the responsible authority during 2008 and 2009. Boediono and Sri Mulyani Indrawati, have maintained that the decision to ba...