Be Careful with What You Wish: Saving Developing Countries from Development and the Risk of Overlooking the Importance of a Multilateral Rule-Based System on Investment in the Twenty-First Century

Abstract

This essay aims to stress the key role of international investment law for development in times of globalisation. It does not argue that the current international investment regime is good as it is, nor that it does not require adjustments. Instead, it is argued here that regardless of how power shaped international investment law during the nineteenth and twentieth centuries, currently investment paradigms are radically shifting and development is starting to happen. For the first time in history foreign direct investment (FDI) is in fact enabling developing countries to become major exporters of goods and services of increasing value added. An economic multipolar world is emerging and not only inward but also outward FDI from developing countries have a lot to do in this process. Just when developing countries are finally learning to insert themselves into a globalised economy, and just when they are learning how to use international rule-making to promote that process, many sectors in developed countries—not used to any external regime limiting their historical discretion in national decision-making—are harshly reacting against the very law they contributed to create. Within this radically new context, to argue that a system of global governance is just a manifestation of imperialism entails the risk of saving developing countries from development.