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52. The public law challenge: Killing or rethinking international investment law?
- Author:
- Stephan W. Schill
- Publication Date:
- 01-2012
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- At the heart of the so-called “legitimacy crisis” of international investment law, prominently reflected in the Public Statement on the International Investment Regime, is what I call the public law challenge. It builds on the observation that one-off appointed arbitrators, instead of standing courts, review government acts and reach far into the sphere of domestic public law by crafting and refining the standards governing in vestor-state relations. Arbitrations against Uruguay and Australia concerning cigarette packaging are the most recent examples of genuinely public law disputes now settled in arbitration. The disputes about Argentina's emergency legislation and Canada's ban on pesticide s are others. These arbitrations create friction with domestic public law as arbitrators, having little democratic legitimacy, often operate in non-transparent proceedings and produce increasing amounts of incoherent decisions.
- Topic:
- Economics, International Law, International Trade and Finance, Markets, and Foreign Direct Investment
- Political Geography:
- Canada, Argentina, and Australia
53. FDI, catch-up growth stages and stage-focused strategies
- Author:
- Terutomo Ozawa
- Publication Date:
- 05-2012
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- This is a reply to Francisco Sercovich's commentary on my Perspective on FDI-led industrial takeoff in which I described foreign direct investment (FDI) as an ignition for catch-up industrialization. He emphasized "the rich and nuanced variety of strategic options" (e.g., S policies, engineering education, chaebol-type enterprises for technology absorption, R capabilities), which are, however, relevant only to higher-stages of catch-up, but notto the kick-off stage with which my previous Perspective was concerned. Economic development derives from structural changes at different stages of growth, requiring stages-focused strategies.
- Topic:
- Development, Economics, International Trade and Finance, Markets, and Foreign Direct Investment
54. Economic patriotism: Dealing with Chinese direct investment in the United States
- Author:
- Sophie Meunier
- Publication Date:
- 05-2012
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- China is investing throughout the world, in industries from automobiles to zinc. In the US, Chinese foreign direct investment (FDI) accounted for only 0.25% of total FDI stock in 2010,but it is likely to increase as China diversifies its holdings and seeks to obtain technology, managerial know-how and easier access to US consumers. As these investments multiply, we expect a few cases to attract negative attention in the media and political arena. Chinese companies are predominately state-controlled, raising the specter that they act to fulfill strategic, rather than profit maximizing, goals. China is also an ideological rival, causing irrational concern that Chinese investment in the US may act as a Trojan Horse of Chinese values and politics --fueled by rational concerns about subsidies, piracy, and economic espionage.
- Topic:
- Economics, International Trade and Finance, and Foreign Direct Investment
- Political Geography:
- United States and China
55. Inward FDI in Russia and its policy context, 2012
- Author:
- Alexey Kuznetsov
- Publication Date:
- 07-2012
- Content Type:
- Working Paper
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Russia is potentially an attractive host economy for foreign direct investment (FDI), mainly due to its large market and rich natural resources. The Government has, however, been unable to make the radical changes needed in the country's investment climate for attracting FDI on a scale and to a range of industries in line with Russia's potential. Nevertheless, oil and gas, power generation and motor vehicles industries, as well as wholesale and retail trade and several other industries have recently received new and significant FDI. After a steep decline in 2008, inward FDI (IFDI) stock recovered, to reach US$ 491 billion in 2010, although there was a moderate fall again in 2011. IFDI flows fell considerably in 2009 but rose to US$43 billion in 2010 and US$ 53 billion in 2011. In 2008–2010, the largest number of significant greenfield projects were in power generation. Large mergers and acquisitions (M) took place in various industries, but the size of the largest deals was usually smaller in 2010 than in 2008 and 2009. High levels of corruption, lack of competition and a distorted dialogue between the state, business and society are main barriers to the rapid growth of inward FDI. The recent global financial and economic crisis has revealed weaknesses of the Russian model of development in the 2000s. It is doubtful whether the efforts currently under way by the Russian Government to “repair” the existing model without political and economic reforms will lead toward a major improvement of the investment climate as only slight changes are being made (e. g., the improvement of the Russian migration regime and the development of special economic zones). However, the federal elections in 2012 could lead to more efficient steps, although it is difficult to predict the scale of probable positive shifts in the investment climate.
- Topic:
- Development, Economics, and International Trade and Finance
- Political Geography:
- Russia
56. Inward FDI in Uruguay and its policy context
- Author:
- Graciana del Castillo and Daniel García
- Publication Date:
- 08-2012
- Content Type:
- Working Paper
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- An analysis of trends in foreign direct investment (FDI) in Uruguay is difficult due to data problems. Nevertheless, balance-of-payments data reveal that inward FDI (IFDI) increased sharply in the second half of the decade 2002-2011 under analysis. IFDI flows relative to GDP rose annually on average to close to 6% in 2005-2011. This compares favorably with annual average flows of only 1% in the decade before the banking crisis and the sharp devaluation of the Uruguayan peso in 2002. At the time, investment in natural resources, including in farmland and real estate in Punta del Este, became very attractive. IFDI flows peaked at 7.5% of GDP in 2006, with the investment in the construction of the first cellulose plant in the country by a multinational enterprise (MNE) from Finland. The rapid increase in IFDI in the second half of the past decade took place amid high rates of economic growth (averaging about 6% a year on average), in combination with an adequate policy and regulatory framework and fiscal incentives to foreign investors. So far, Uruguay remains primarily a host country for FDI, with outward FDI (OFDI) that has been and continues to be insignificant.
- Topic:
- Development, Economics, International Trade and Finance, and Foreign Direct Investment
- Political Geography:
- Latin America
57. Outward FDI from Hungary and its policy context, 2012
- Author:
- Erzsébet Czakó and Magdolna Sass
- Publication Date:
- 08-2012
- Content Type:
- Working Paper
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- The period of significant growth of outward foreign direct investment (OFDI) from Hungary was interrupted in recent years. The global financial and economic crisis has brought considerable changes with effects on Hungary's OFDI. The OFDI stock declined in 2010 after its impressive growth throughout 2000–2009, and the decline in OFDI flows that began in 2007 continued through 2010. However, recent data indicate a rise in both OFDI stock and flows in 2011. Hungary's OFDI stock of US$ 21 billion in 2010 continued to be highly concentrated in terms of the investing companies. These large multinational enterprises (MNEs) face the challenge of an international environment that is increasingly critical to their operations. Government policy and the institutional framework have changed to a great extent since 2010. In particular, the extent of state ownership in the most important outward investors has grown. In the policy field, the declared priorities focus on OFDI in new geographic areas and the promotion of the internationalization of small and medium-sized enterprises (SMEs). The main question for the future of Hungarian OFDI remains that of how its sustainability can be assured, especially in terms of broadening the company base of OFDI.
- Topic:
- Economics, International Trade and Finance, and Foreign Direct Investment
58. Inward FDI in Malaysia and its policy context
- Author:
- Rajah Rasiah and Chandran Govindaraju
- Publication Date:
- 04-2011
- Content Type:
- Working Paper
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Malaysia is still perceived as an important destination for foreign direct investment (FDI). Deregulation by the Malaysian government in 1986 with a new round of Pioneer status tax holidays, tax allowances for expansion projects, liberal rules for firms operating in free trade zones (FTZs), and tax exemptions are encouraging stronger FDI inflows (IFDI). IFDI flows reached a peak in 1988-1993 as export-oriented foreign multinational enterprises (MNEs) relocated manufacturing production operations to Malaysia to benefit from cheap labor, government incentives and liberal conditions for manufacturing FDI. After 1996, due to the Asian financial crisis in 1997-1998, IFDI flows into Malaysia decreased and subsequently recorded the lowest level in 2001 as a result of the world trade recession. Following steady growth in 2002-2007, IFDI in Malaysia fell dramatically in 2008 and 2009 due to the global economic crisis. However, a strong resumption in the first quarter of 2010 and government efforts, including continued liberalization of manufacturing and services, the Government Transformation Programme, promoting new key economic areas, and the active role of the Ministry of International Trade and Industry (MITI), contributed to an increase in inward FDI flows in the second quarter of 2010.
- Topic:
- Economics, Industrial Policy, International Trade and Finance, Foreign Direct Investment, and Financial Crisis
- Political Geography:
- Malaysia and Southeast Asia
59. The world economic crisis as a changed circumstance
- Author:
- Hermann Ferré and Kabir Duggal
- Publication Date:
- 08-2011
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- In September 2008, the bankruptcy of Lehman Brothers sent financial markets in the United States into a spin. Credit markets froze as banks began to mistrust counterparties, not knowing the extent of toxic assets in loan portfolios that could lead to another major bank collapse. The crisis quickly spread around the world. Governments were urged to take drastic measures. Experts discussed the possible nationalization of portions of the U.S. banking industry and other sectors. Other countries also considered measures to save key industries.
- Topic:
- Economics, International Trade and Finance, Markets, and Financial Crisis
- Political Geography:
- United States
60. From the FDI Triad to multiple FDI poles?
- Author:
- Karl P. Sauvant and Persephone Economou
- Publication Date:
- 07-2011
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Twenty years ago, in the inaugural issue of the World Investment Report, the United Nations highlighted a shift in the global pattern of foreign direct investment (FDI) from bipolar, dominated by the United States and the European Community, to tri-polar (the FDI Triad), dominated by the European Community, the United States and Japan.
- Topic:
- Economics, International Trade and Finance, United Nations, and Foreign Direct Investment
- Political Geography:
- United States, Japan, and Europe