Foreign direct investment (FDI) has the potential to contribute significantly to sustainable economic development through the transfer of capital and technology, job creation, economic linkages, infrastructure development and capacity building. Accordingly, governments use a variety of tools and strategies to attract and retain investors. At a national level, governments have developed investment frameworks and industrial policies to maximize the benefits of investments. At an international level, countries have developed a network of over 3000 bilateral investment treaties to provide substantive and procedural protections and rights to investors as a means of encouraging and facilitating more investment. Now, with some decades of experience with these national policies and bilateral investment treaties, there is evidence that they have not been effective at attracting the type of quality investment that produces the economic growth and development sought by host countries. Moreover, these tools can impose costs that further undermine the intended benefits and, at times, the policy space of governments to pursue development objectives through other means. Together, these potential cracks in the chain leading from FDI to sustainable development are prompting governments to take a hard look at their strategies for attracting and benefitting from foreign investment, and to focus renewed attention on how to best leverage domestic industrial policy and international investment law to catalyze and shape economic activity.
In light of these issues, the Embassy of Ecuador and the Center organized a forum on “Development, FDI, and Investment Treaties” that sought to facilitate thoughtful conversations on policy solutions by bringing together academics with diverse areas of expertise to discuss their research on foreign investment and the domestic and international frameworks that govern it. The forum searched for answers to:
- What is the role of FDI in the sustainable economic diversification of developing countries?
- What are the roles of investment treaties in shaping international investment?
- Who are the creators, interpreters and subjects of international investment law, and how do the answers to those questions affect development outcomes?
- What might next generation domestic and international investment laws and policies look like?
The full program and several background documents are available here.