Growth and Resilience in an Uncertain Global Economy
Edited by Hal Hill and Maria Socorro Gochoco-Bautista
Chapter 7: Investment treaties: ASEAN
Investment treaties significantly interact with macroeconomics, policy, and institutional determinants in attracting, retaining, and sustaining foreign direct investment (FDI). While the precise magnitude of their contribution remains a matter of econometric dispute, the United Nations Conference on Trade and Development (UNCTAD) concluded in 2009 that investment treaties, at the very least: appear to have an impact on FDI inflows from developed countries into developing countries. Although most BITs [bilateral investment treaties] do not change the key economic determinants of FDI, they improve several policy and institutional determinants, and thereby increase the likelihood that developing countries engaged in BIT programs will receive more FDI . . . BITs – and other IIAs [international investment agreements] – are important to TNCs [transnational corporations] in terms of investment protection and enhancing stability and predictability of FDI projects. For the majority of surveyed TNCs from all sectors, BIT coverage in host developing countries and transition economies plays a role in making a final decision on where to invest. (UNCTAD 2009, 55) UNCTAD’s 2011 World Investment Report indicates that there has been “rapid treaty expansion” worldwide, such that as of 2010, 6092 international investment agreements have been found to account for legal protection for “about two- thirds of global FDI stock” (UNCTAD 2011, 100–102). According to UNCTAD, “countries continue to conclude IIAs, sometimes with novel provisions aimed at rebalancing the rights and obligations between States and investors and ensuring coherence between IIAs and other public policies” (UNCTAD 2011, 100).
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