Foreign Investment And Its Effects On Economic Development

Introduction Foreign investment is a tool to foster the economic development in a country. It can be denied that foreign investment helps poor countries to boost their development faster than just only relying on domestic business. The first bilateral treaty was signed in 1959 between Germany and Pakistan. After World War II, European countries started to expand their business to the developing countries? markets. BITs were signed to give confidence to business players from developed states by offering more protection than just relying on domestic law. Before 1980, the protection of investment was the task of diplomatic negotiations, and when disputed, international customary law was in the eyes of ad hoc claims tribunals. International†¦show more content†¦According to Vinuales, environmental considerations become more and more necessary component in foreign investment disputes.[footnoteRef:4] In addition, Sonarajah states that the emergence of environmental claims in international inve stment field started in the beginning of the 2000s where environment had been neglected in the IIAs negotiation and dispute settlement.[footnoteRef:5] The traditional BITs did not put much debate on environmental protection, but, the first regional investment treaties integrated into a free trade agreement, the NAFTA became starting point for environmental lawyers and policy makers about the possibility risks to environmental regulation.[footnoteRef:6] Even though, these treaties still put restriction to host countries to regulate the law in the purpose of environmental protection, the investor-state dispute settlement in modern BITs has managed to take into account environmental as a component in some cases.[footnoteRef:7] [4: The environment issues