Jakarta – Regional governments in Indonesia have been barred by Jakarta from making deals with foreign countries.

With the law on regional autonomy coming into force in less than two months, Minister of Home Affairs and Regional Autonomy Surjadi Sudirdja has made it clear that economic-cooperation agreements with foreign countries would remain under the central government's sovereignty.

Nor were regional provinces allowed to receive foreign loans without Jakarta's approval, he was quoted by the Indonesian Observer as saying after accompanying President Abdurrahman Wahid at a meeting with leaders of provincial legislative bodies.

The regulation came in response to the refusal of foreign countries to make deals with regional governments or to give loans without the guarantee of the central government, he said.

"The government will issue a regulation to deal with this problem prior to the implementation of the autonomy law by January 1, 2001," he told the Observer.