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311. Is Chinese FDI pushing Latin America into natural resources?

Author:
Miguel Pérez Ludeña
Publication Date:
03-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Chinese foreign direct investment (FDI) in Latin America is a recent phenomenon. Although the China National Petroleum Corporation and other companies have been present in Peru, Ecuador and Venezuela since the early 1990s, large projects have been pursued only since 2006, following an extended period of high commodity prices. The Economic Commission for Latin America and the Caribbean (ECLAC) estimated that there were US$ 15 billion of Chinese FDI inflows into Latin America in 2010, 90% of which were in extractive industries. This further contributed to the already high percentage of Chinese FDI flows to the region that are in natural resources. At a time of high economic growth fueled by commodity exports and strong currency appreciation (particularly in Brazil), FDI into extractive industries strengthens the region's specialization in primary products at the expense of manufacturing and other activities.
Topic:
Economics, International Trade and Finance, Markets, Natural Resources, and Foreign Direct Investment
Political Geography:
China, Brazil, Latin America, and Peru

312. The unbalanced dragon: China's uneven provincial and regional FDI performance

Author:
Karl P. Sauvant, Chen Zhao, and Xiaoying Huo
Publication Date:
03-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
Among developing countries, China attracts most foreign direct investment (FDI). Where is this investment located within China, what explains its distribution and what are policy implications? We used UNCTAD's FDI Performance Index to answer the first question. Although developed for countries , it can be applied to sub-national units. It uses provincial GDP to ascertain whether a given territorial unit has received FDI inflows as expected from its economic size. Standardizing the data accordingly reveals three clusters of provinces for 2007-2010 (table 1, figure 1 below): The first cluster encompasses virtually all coastal provinces: they have an index value above 1, i.e. perform better than their economic size would lead one to expect. They account for 9 of the top 11 performers of Mainland China's 31 provinces, municipalities and autonomous regions (“provinces”). The provinces in the middle cluster underperform (index value of 1-0.5). They include 5 central provinces, but also 3 western and 2 coastal provinces. The provinces in the bottom cluster underperform significantly (index value below 0.5), comprising primarily the country's western provinces (8 out of the 10 provinces in this cluster).
Topic:
Development, Economics, International Trade and Finance, Markets, and Foreign Direct Investment
Political Geography:
China

313. Different investment treaties, different effects

Author:
Clint Peinhardt and Todd Allee
Publication Date:
02-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
The proliferation of investment treaties is perhaps exceeded only by academic studies of those treaties. Legal scholarship has long been attentive to the evolution in international investment agreement (IIA) content -- but until recently, quantitative assessments of IIAs have tended to treat them as interchangeable: the only measure of investor protections encoded in IIAs is whether a treaty had been signed and/or entered into force. Thankfully, the United Nations Conference on Trade and Development has been at the forefront of capturing not just IIAs' proliferation but also the evolution in their content. Its work shows that treaties apply for differing durations, have conflicting procedures for termination and include varying definitions of even basic terms, such as “investors” and “investment.” Other quantitative studies have begun to measure these variations, focusing initially on differences in dispute resolution. 1 Some IIAs demand that investors choose between domestic and international dispute resolution; some provide explicit consent of both parties to international arbitration; and some designate a particular forum for arbitration, whereas others specify multiple options. Of course, IIAs vary across many dimensions, but our initial examination of dispute resolution provisions alone demonstrates the importance of examining IIA content.
Topic:
Economics, International Trade and Finance, Markets, Treaties and Agreements, and Foreign Direct Investment
Political Geography:
United Nations

314. National companies or foreign affiliates: Whose contribution to growth is greater?

Author:
Alice H. Amsden
Publication Date:
02-2012
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
A priori, is there a growth/efficiency justification for government programs designed to support and promote national companies (public and private) as opposed to, and in competition with, opening the doors to multinational enterprises (MNEs)? In competitive markets, there should be no difference. Where national companies close in capabilities to foreign affiliates do not exist, foreign direct investment (FDI) may stimulate development, if a country is lucky enough to attract it. But in the imperfect markets that characterize the BRICs and other emerging markets, where foreign affiliates may crowd out excellent but inexperienced national firms, the question arises as to which type of enterprise policy makers should encourage for the long run. Historically, policy makers used tariffs to promote national firms (a “race to the bottom”). Today they use investments in science and technology (a “race to the top”).
Topic:
Economics, International Trade and Finance, Markets, and Foreign Direct Investment

315. 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

316. Using US Strategic Reserves to Moderate Potential Oil Price Increases from Sanctions on Iran

Author:
Philip K. Verleger
Publication Date:
02-2012
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
The United States has initiated new sanctions against Iran aimed at preventing it from collecting revenue from exports of crude oil. The European Union has followed, embargoing all imports of Iranian crude from July 1, 2012 and preventing any firms from entering into new contracts to import Iranian oil after January 23, 2012. The new US and EU sanctions could be the most draconian in many years. If implemented fully, US sanctions would force trading partners to choose between the United States and Iran. EU sanctions would cut Iran off from an important market. These sanctions, while reducing Iranian income, could pose a very serious economic threat to countries that have significant trade with the United States and/or import significant quantities of oil from Iran.
Topic:
Conflict Resolution, Foreign Policy, International Trade and Finance, Markets, Oil, and Sanctions
Political Geography:
United States, Europe, Iran, and Middle East

317. Global Imbalances and Foreign Asset Expansion by Developing Economy Central Banks

Author:
Joseph E. Gagnon
Publication Date:
03-2012
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
Over the past 10 years, central banks and governments throughout the developing world have accumulated foreign exchange reserves and other official assets at an unprecedented rate. This paper shows that this official asset accumulation has driven a substantial portion of the recent large global current account imbalances. These net official capital flows have become large relative to the size of the industrial economies, and they are a significant factor contributing to the weakness of the economic recovery in the major industrial economies.
Topic:
Development, Economics, Emerging Markets, Globalization, Markets, Monetary Policy, and Financial Crisis

318. Spillover Effects of Exchange Rates: A Study of the Renminbi

Author:
Arvind Subramanian, Aaditya Mattoo, and Prachi Mishra
Publication Date:
03-2012
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
This paper estimates the impact of China's exchange rate changes on exports of competitor countries in third markets, known as the "spillover effect." Recent theory is used to develop an identification strategy in which competition between China and its developing country competitors in specific products and destinations plays a key role. The variation is used—afforded by disaggregated trade data—across exporters, importers, product, and time to estimate this spillover effect. The results show robust evidence of a statistically and quantitatively significant spillover effect. Estimates suggest that, on average, a 10 percent appreciation of China's real exchange rate boosts a developing country's exports of a typical 4-digit Harmonized System (HS) product category to third markets by about 1.5 to 2 percent. The magnitude of the spillover effect varies systematically with product characteristics as implied by theory.
Topic:
Development, Economics, and Markets
Political Geography:
China

319. The Private Sector and Humanitarian Relief

Publication Date:
03-2012
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
Oxfam believes that the increasing involvement of the private sector in humanitarian relief can add to overall humanitarian capacity . The private sector brings skills and competencies, and is likely to also bring new practices and perspectives to the humanitarian aid community. Any private sector involvement in humanitarian relief must conform with the humanitarian principles embodied in the Red Cross/Crescent and NGO Code of Conduct, including impartial aid based on assessed need, accountability to beneficiaries as well as donors, reduction of future vulnerability as well as immediate relief, and coordination. Oxfam recommends that humanitarian agencies pursue long-term partnerships with private sector entities, so that the private sector's engagement in humanitarian work is strategic, and not just reactive. Partnerships can be bilateral or through consortia, via a variety of modalities. Oxfam has adopted processes for its own engagement with the private sector that it recommends to other humanitarian NGOs. These include screening potential private sector partners to address ethical concerns, potential conflicts with Oxfam's mission and humanitarian principles, and conflicts of interest for the company. Pilot projects can test the working relationship and suitability/appropriateness of contributions before projects are scaled up. These principles apply to private sector humanitarian engagement, including response to natural disasters, conflicts, and complex emergencies, as well as in post-disaster recovery and reconstruction.
Topic:
Development, Human Rights, Human Welfare, Humanitarian Aid, Markets, and Foreign Aid

320. Gender equality: it's your business

Author:
Lauren McCarthy, Liz Kirk, and Dr Kate Grosser
Publication Date:
03-2012
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
This Briefing for Business is intended for senior managers in global and national companies, especially those retailing and producing food and fast-moving consumer goods, and which source goods or labour in developing countries. Although many companies already do much to protect human rights in their operations and value chains, there is more that they can and must do.
Topic:
Gender Issues, Human Rights, International Trade and Finance, and Markets