ABSTRACT
As noted by Anne Booth in the preceding chapter, General Suharto and his civilian advisers had started out in the 1960s by freeing the economy from the ruinous policies of President Sukarno. Yet by the mid-1980s, official favoritism and interference were taking their toll. In some sectors--plastics, for instance;}- the government had awarded import monopolies to well-connected individuals, including relatives of the president. In other sectors--banking comes to min~ the government had thwarted competition and efficiency by freezing the number of issued licenses to operate. Notwithstanding the commitment of economic policymakers to competitive markets in principle, actual markets in practice were seldom truly free. Corruption and rent-seeking further fueled Indonesia's reputation as a "high-cost economy."
