ABSTRACT
Soeharto entrusted economic policy to a handful of mostly US-trained economists who had little choice but to turn to the outside world for help. By most measures, Indonesia's economy has performed well since Soeharto took power. ‘A simple chain of economic reasoning makes it clear why economic policy makers were drawn inexorably down the path of structural adjustment,' explained Ali Wardhana in a 1989 speech. 'Economic necessity is forcing the government to consider privatisation more seriously,' concedes Sjahrir, an economist at the Institute for Economic and Financial Research. Another weakness in the Indonesian economy is that the supporting services for a modern business sector—accounting and law firms especially—have not kept pace with the growth of the broader economy. The chapter provides a case study—which details the rise and fall of cigarette maker Bentoel—that illustrates both the deficiencies in the legal and accounting professions and how business-government relationships can complicate life in the world of commerce.
