The article summarizes both the past foreign investment policies and the characteristics of the resulting foreign investment patterns in the following ASEAN countries: Indonesia, Malaysia, the Philippines, Singapore and Thailand. It shows that many of the negative features of direct foreign investment patterns are at least partially explained by the foreign investment policies of the host countries. In general, the policies could be best characterized as of the classical import-substitution type with protective tariffs leading to fragmented and oligopolistic markers, excess capacity and distorted domestic markets. Finally, the article discusses the implications for future investment and future development in the ASEAN countries and offer policy solutions to the general problem that exist between investors and hosts. [Download]