(FORTUNE Magazine) – The long-overlooked Southeast Asian nation of 182 million people is finally attracting U.S. corporations eager for growth markets in a sluggish global economy. Among them: General Electric, which with Mitsui of Japan and an Indonesian partner plans to build and operate a $2 billion power plant in Java, the republic's biggest island. For all this, danger flags are fluttering as Indonesia turns toward economic nationalism. To the dismay of international businessmen and creditors, President Suharto, 71, who has ruled the country since 1968 and just won another six-year term, has ousted from his cabinet many of the U.S.-educated, market-oriented technocrats who shaped the open-door foreign-investment policies. Instead he has appointed more advocates of costly high-tech state enterprises, like B. J. Habibie, a German-educated engineer. As Minister of Research and Technology, Habibie has already persuaded the Indonesian government to sink nearly $1 billion into a state-owned aircraft factory. High-tech ventures feed national pride, but less than 1% of Indonesians have any sort of post-secondary education. And with a labor force that grows by 2.5 million people annually, the country certainly needs lower-tech factories that make garments and sneakers. Says Sanjoy Chowdhury, chief Asia-Pacific economist for Merrill Lynch in Singapore: ''With the emergence of China, Indonesia will have to work harder to attract investment dollars.''