Wednesday, August 24, 2011

"Brokers and Economic Transition"



   MUHAMMAD Nazaruddin. This name is known to the public not only because of allegations of corruption that befell the giant-scale private self and his wife, Sri Wahyuni ​​Neneng, or the drama of pursuit up to Cartagena, Colombia, but also because he could speak about the involvement of a number of prominent politicians in the activities of bribery and misappropriation of funds public.

   There is a curiosity that was aroused because of the fishing possibilities Nazaruddin disclosure of all names the parties involved in major corruption cases, even members of the Democratic Party, which incidentally is the ruling party in this country. Awesomeness cases revealed by the statement of the Chairman Nazaruddin Corruption Eradication Commission (KPK) Busyro Muqoddas.

   Nazaruddin Busyro states involved at least 31 cases of alleged corruption and almost all of these cases are in various ministry projects financed negara.Nilai project budget is estimated at more than Rp 6 trillion. Regardless of what will next happen in Nazaruddin when the process of investigation and trial took place later, there is a gaping unrest in society.

With the capture Nazaruddin, an alleged network that systematically undermine the state budget through parliament again as if not groundless. Unrest caused by corruption is being expanded in a number of countries in the hemisphere dunia.Ketika boosted the economy to grow taller, there was also the seeds of corruption grew thick.

   Funds are disbursed funds for the construction of easily exploited for personal gain and other interests that are far from the original intention. India and Vietnam, including two state of rapid economic growth which is also being diresahkan by corruption scandals.

   Returning to the case of Indonesia, I am reminded of a book written by Timothy Frye entitled Brokers and Bureaucrats (2003) published by the University of Michigan. Frye combing the reason why in countries like Russia have a strong role of the broker once in the economic and political practices.

   In 1992 when reforms stalled market economy in Russia, the economic stabilization package is not running for months, the rate of inflation reached 30-40 percent per month, and the privatization of state companies has just begun, but the relationship the president and Parliament deteriorated, there was a currency trade is facilitated brokers.

   The power brokers gathered to form The Moscow Exchange, a sort of stock market run by the broker on a small scale, with a capital of less than USD30.000. They trade with each other to make a living while getting rid of dilapidated company.

   Meanwhile, the brokers also play a role in commodity trading in Rusia.Para broker selects prospective buyers and sellers, find a "mate" suitable and if the trade happens, they get a commission from the buyer and seller.

   Is a fairness in Russia that the brokerage is also "sell" protection (including armed protection) for the needy, including when it occurred sengketa.Intinya that the system of economic management in Russia shows how weak the state role in providing certainty for economic actors.

   As a result, interested parties need each other to exploit the situation to make profits through the role as a broker. What's interesting is that the earlier Frye analysis in a process of economic reform, there is a consequence of uncertainty, even for those who are usually easily obtain allocations of power.

   They is then moved to find certainty in his way sendiri.Dalam world corruption, it is the principle of "for-for". If a person takes so many dollars from the flow of funds passing in front of him, those who saw the incident and facilitate it to happen to get a portion of the funds taken.

   If not, it will be opened as a cheating scandal in the public eye. In the transition phase of economic reforms, as well as undertaken since the collapse of Indonesia's New Order regime in 1998, the uncertainty of the results was tightened neck. Some employers repeatedly complained the high cost of production in this country.

   The high cost is true not merely because of policies that fail to support the cost-efficiency, but because employers require brokers to ensure that their projects succeed or at least not terlibas by other projects. In this kind of transition period, state institutions do exist, but in name.

   Existing institutions can not guarantee that the transactions that occur will not be cheated by those who used to take profit. This is where the ironic role of liaison between the broker alias and the other one. They help the transaction process, getting the project, draw profits, and paid a commission for that role.

   This broker is sucking funds, public funds even though, but a broker is usually rare breach of contract with a pay for her. A broker's reputation is determined by its ability to hold promise on his client. So in an uncertain world, it should at least talk a broker can be held.

   Thus, in the case Nazaruddin, our attention should not be taken up in the drama disclosure of the parties involved as a broker as he is usually well aware of the "contract" - was as a broker. Do we just missed fortify themselves from networks of brokers who continue to try to suck funds from each of the opportunities they see in the system that is still versatile patchwork in this transition era.

   Given that the risk of large-scale corruption is quite plural kinds occur in countries with economies in transition, it is now challenged to Indonesia as soon as possible to build an institution that is suppoarted by the reputation mechanism.

   Required a special selection for screening reputation parties involved in managing the economy and entered in the budget team in Parlemen.Necessary smooth circulation of information about the parties involved so that she no longer needed a broker to ensure that the information circulating is true.

   Incentive mechanisms are needed for members who obey such they must refrain from violating the boycott on shared norms. Learning from experience in other countries, the role of institutions such as the Commission needs to be buttressed by revamping the institution where the negotiations took place public funds.

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