In their contribution to the FDI Perspectives series, Baiju Vasani and Anastasiya Ugale drew attention to an emerging trend in favor of the so-called "costs follow the event" (CFtE) (or loser pays) approach, which is in contrast to the more "traditional" approach under which parties share the costs of arbitration equally, with each party covering its own legal fees.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Many governments offer incentives to attract foreign direct investment (FDI). For example, the renewable energy sector has benefitted from large national incentive schemes in the past decade. However, the withdrawal of such incentives can lead to investors bringing investment treaty claims against host countries. This Perspective looks at some claims host countries face from investors in the renewable energy sector and their implications.
Topic:
Economics, International Trade and Finance, and Foreign Direct Investment
Centre for the Study of the Economies of Africa (CSEA)
Abstract:
African countries have been left out of the recent benefits accruing from international trade. For example, they accounted for only 3.2 percent of world trade in 2013 compared to 5 percent in the mid-1960s. Regional integration can reverse this weak performance as it holds the promise for countries to gain from the resultant economies of scale and enhanced competitiveness. It will also help to expand the markets for foreign direct investment.
Topic:
International Trade and Finance, Foreign Direct Investment, Regional Integration, Trade, and Trade Policy
Social accountability as a tool for development planning is gaining foothold in international donor circles. It is concerned with the responsibility and responsiveness of state authorities, as well as the ability of citizens to make claims and hold those who exercise power to account for their actions.
Topic:
Development, Economics, Foreign Aid, and Foreign Direct Investment
This paper, prepared in connection with a February 2014 conference organized by the UN Economic Commission for Africa, discusses some of the implications that investment treaties have for investments in infrastructure and the extractive industries. It focuses on liability for government conduct (1) in connection with tenders and negotiations; (2) when responding to questions regarding the legality of the investment; (3) in using performance requirements to leverage benefits and capture spillovers from the investment; (4) changing the legal framework governing an investment in response to evolving needs, circumstances, and interests; (5) administering the investment; and (6) requesting, and responding to requests for, renegotiation. After describing some investment treaty disputes, this paper concludes by outlining options for addressing and minimizing tensions between investment treaties and government policies and practices in these areas.
Topic:
International Political Economy and Foreign Direct Investment
Across multiple African countries, discrepancies between administrative data and independent household surveys suggest official statistics systematically exaggerate development progress. We provide evidence for two distinct explanations of these discrepancies. First, governments misreport to foreign donors, as in the case of a results-based aid program rewarding reported vaccination rates. Second, national governments are themselves misled by frontline service providers, as in the case of primary education, where official enrollment numbers diverged from survey estimates after funding shifted from user fees to per pupil government grants. Both syndromes highlight the need for incentive compatibility between data systems and funding rules.
Topic:
Development, Foreign Aid, Foreign Direct Investment, Governance, and Developing World
The Quality of Official Development Assistance (QuODA) measures donors' performance on 31 indicators of aid quality to which donors have made commitments. The indicators are grouped into four dimensions associated with effective aid: maximizing efficiency, fostering institutions, reducing the burden on partner countries, and transparency and learning. The 2014 edition finds that donors are overall becoming more transparent and better at fostering partner country institutions but that there has been little progress at maximizing efficiency or reducing the burden on partner countries. The World Bank's concessional lending arm, the International Development Association (IDA), performs very well in QuODA, ranking in the top 10 of 31 donors on all four dimensions. The United States ranks in the bottom half of all donors on three of the four dimensions of aid quality and last on reducing the burden on partner countries. The United Kingdom ranks in the top third on three of four dimensions of aid quality and scores particularly well on transparency and learning. The Global Fund ranks in the bottom third on fostering institutions but ranks in the top third on the other three dimensions of aid quality, including the top spot in maximizing efficiency.
Topic:
Foreign Policy, Development, Economics, Foreign Aid, and Foreign Direct Investment
Since China and the European Union (EU) announced their decision to negotiate a bilateral investment treaty (BIT) at the 14th China-EU Summit in February 2012, the two sides have engaged in two rounds of negotiations. If successful, it will be the first standalone EU BIT, a BIT between the world's largest developed economy and the world's largest developing economy, and will occupy a unique place in the history of BIT negotiations.
Topic:
Economics, International Trade and Finance, Bilateral Relations, and Foreign Direct Investment
American Enterprise Institute for Public Policy Research
Abstract:
Chinese foreign investment declined through mid-2014 for the first time since the financial crisis. By sector, energy draws the most investment, but a slump in energy spending means that metals and real estate have been more prominent so far in 2014. The United States has received the most Chinese investment since 2005, followed by Australia, Canada, and Brazil. China invests first in large, resource-rich nations but has also diversified by spending more than $200 billion elsewhere. Chinese investment benefits both China and the recipient nation, but host countries must consider thorny issues like Chinese cyberespionage and subsidies.
Topic:
Economics, Human Rights, International Trade and Finance, Terrorism, and Foreign Direct Investment
Political Geography:
United States, China, Canada, Asia, Brazil, and Australia
Africa is home to seven of the world's ten fastest-growing economies. By 2050, the continent's population is expected to overtake India's and China's, doubling to two billion people. Moreover, those two billion Africans will be younger than their counterparts in every other region of the world and will account for one in four workers globally by mid-century. Africa's rich endowment of natural resources, including about 30 percent of the world's known reserves of minerals and 60 percent of the planet's uncultivated arable land, is already well-known to investors.
Topic:
Security, Economics, International Trade and Finance, and Foreign Direct Investment