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112. 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
113. The Arab Spring: How soon will foreign investors return?
- Author:
- Nathan M. Jensen, Persephone Economou, Paul Antony Barbour, and Daniel Villar
- Publication Date:
- 05-2012
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- The events of the Arab Spring have dramatically increased the risk perceptions of foreign investors. In directly affected countries, these events led to disruptions in economic activity including plummeting tourism and foreign direct investment (FDI) flows, all of which negatively impacted economic growth. While the economic impact was uneven across the Middle East and North Africa (MENA) region, for the region's developing countries the growth rate assumption underpinning survey analysis in the Multilateral Investment Guarantee Agency's (MIGA's) World Investment and Political Risk Report for 2011 was 1.7%. How much will these developments affect future FDI?
- Topic:
- Political Violence, Regime Change, Foreign Aid, Fragile/Failed State, and Foreign Direct Investment
- Political Geography:
- Middle East, Arabia, and North Africa
114. The standing of state-controlled entities under the ICSID Convention: Two key considerations
- Author:
- Mark Feldman
- Publication Date:
- 04-2012
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- The ICSID Convention, under Article 25(1), applies only to those investment disputes that are between a contracting state and a “national” of another contracting state. Given that limitation, and in light of the significant and growing amount of foreign investment by state-controlled entities (SCEs), ICSID tribunals likely will need to address one fundamental issue with greater frequency: whether disputes arising from SCE investments constitute investor-state disputes falling within, or state-to-state disputes falling outside of, the scope of the ICSID Convention.
- Topic:
- Development, Economics, Markets, Foreign Direct Investment, and Governance
115. State-controlled entities control nearly US$ 2 trillion in foreign assets
- Author:
- Karl P. Sauvant and Jonathan Strauss
- Publication Date:
- 04-2012
- Content Type:
- Policy Brief
- Institution:
- Columbia Center on Sustainable Investment
- Abstract:
- Developing country sovereign wealth funds (SWFs) as players in the world foreign direct investment (FDI) market have received considerable attention. While outward FDI from emerging markets has indeed risen dramatically, that by SWFs has been negligible: their outward FDI stock is around US$ 100 billion (compared to a world FDI stock of US$ 20 trillion in 2010).
- Topic:
- Development, Economics, Emerging Markets, Government, International Law, and Foreign Direct Investment
- Political Geography:
- United States
116. 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
117. 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
118. 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
119. 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
120. 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