38 SOCIAL SCIENTIST have been and continue to be subject to licensing, agricultural growth is critically dependent upon government expenditure through infrastructure provision and subsidies, many prices are administered or regulated, and foreign trade is controlled through quotas, tariffs, taxes and a wide range of non-tariff regulations.The degree of actual control by the government over the economy remains far beyond anything ever experienced in India, despite more than a decade of official 'liberalization' of policy in Indonesia. In addition, the interaction between state and domestic private capital extends beyond that expressed by government policy, because of the growth of state-sponsored private business groups. These have emerged from the capacity of military politicians and bureaucrats to appropriate the rents from official control over resources and authority, for private use. Thus, in the early years of this regime, individual generals, political cliques and other such groups established or expanded business groups, usually with Chinese partners who had business experience in Indonesia. These nascent capitalist groups in effect depended upon the capacity of the 'official' partner to appropriate or provide privileged access to certain state monopolies, public credit, government contracts, concessions, or licences. By the late 1970s these had developed into large-scale consolidated business conglomerates. The most blatant example of these is the Liem Sioe Liong/Suharto group, which is dominated by members of the President's immediate family, and which has become one of the largest regional corporate groups with interests in banking and finance, industry, trade and real estate. This means that clientelism, patronage and corruption—which are usually seen as inimical to economic growth—are here very much associated with the growth process. Indeed, they have actually formed an integral and necessary aspect of the accumulation and industrialization processes in Indonesia. The business groups which have flourished—and thereby contributed the most to the high rates of growth—are those which have benefited substantially from preferential access to capacity and production licences, import monopolies, construction and supply contracts, public sector credit, government-controlled distributorships, forestry concessions and the like. As a result, the interests of the government nnd those of l^rge business cannot readily be separated, and public economic policy has not reflected the interests of the economy as a whole and all its contituents but rather those of a small elite. Despite the existence of a Five-Year Plan framework (the Repelitas) there is no evidence that cither domestic or foreign investment has been promoted according to any systematic social priorities, such as the potential for employment creation, backward linkages, government revenues, external economies. (Donges et al., 1980) The relationship of the regime w|th international capital, while one of explicit dependence from the start. Has undergone several phases. One of rfie most notable features is that this regime from the start has operated with an open capital account, with no restrictions on the inflow or outflow of capital. This completely free capital account in a context of a plethora of domestic