July 10, 2007 (LPAC)--Indonesia, the world's fourth-largest nation and Southeast Asia's largest economy, has imposed a wide range of protective measures against foreign direct investment (FDI) into most of its national industries.

Despite constant harping from the West to water down the labor and investment laws to accomodate foreign takeovers, the government of President Susilo Bambang Yudhoyono has done the exact opposite. According to Bill Guerin writing in the Asia Times, the list issued by Trade Minister Mari Pangestu will affect at least 338 business sectors, up substantially from the 83 previously protected.

The bill, declared under the recently enacted 2007 Investment Law, will not require parliamentary approval, and it will not be applie retroactively. Although the change will not affect several major sectors, including banking, oil and gas, power, water and agriculture, and although the Indonesian banking system has become majority foreign-owned, with the accompanying loss of sovereignty since the 1998 speculative attack, it will nonetheless significantly reduce the percentage of foreign ownership allowed in the areas of armaments, 'high-polluting' industries, transportation, telecom, pharmaceuticals, health and construction, among others--most, to below 50%.