The Failure of the MAI, What's Next?
Author: Pernille, Griselda, Marlene I. Introduction Developing countries often consider foreign direct investment (FDI) as an engine to boost economic growth. Therefore, they try to promote investment inflow by various means. One approach is to offer investment guarantees to foreign investors using Bilateral Investment Treaties (BITs). BITs guarantee foreign investors the same rights as domestic investors and contain rules on international arbitrage. Capital-exporting countries see BITs as a way to protect their companies’ investment abroad, and to encourage the adoption in foreign countries of market-oriented domestic policies that treat private investment fairly. Capital importing countries expect that agreeing to offer BIT protections will reassure and encourage foreign investors. The first BIT was signed in 1959 between Germany and Pakistan and its popularity quickly increased from the early 1960s on. In 1990 there were 470 treaties and in 2012 even 2.857. The reasoning and the ba