Some aspects of foreign investment

The economic development in the world considerably depends on foreign investment. And there remain apprehension of both the investors and the governments of those countries which can provide financial means.

Tfie thing is that international law does not embrace all the basic issues linked with investment activities. Therefore, considerable value* must be attached to acts by which a government clarifies and confirms its desire and receptjiveness for foreign private investment.

Sujch a decision may take various forms: government policy announcements at the highest level, legal commitments through investment contracts with individual investors, national investment laws, even constitutions as well as through the increasing number of bilateral investment treaties. The effectiveness of such declarations will depend largely on the confidence of potential investors in the stability of this or that government. Any capital-supplying country wants the host country to adopt laws regulating this type of cooperation. But the government of a host country may exclude from this activity certain sectors of its economy which are specifically reserved for public or domestic operation. It is only natural that investors will ask the government of a host country for advance assurance* against possible risks. However, it is well-known that such risks always exist not only in the sphere of business but also in the political one.

One of the advantages of bilateral investment is that agreements can be adapted to the particular conditions and relations of the contracting countries. As a rule, they are coordinated with actual investment projects taking into account the priorities of a given economy. But all that should be implemented on a sound legal basis.

Notes

considerable value — зд. большое значение advance assurance — предварительное гарантирование безопас-* ности

Ответьте на вопросы.

1. For what reason was a provision prohibiting the states from creating
trade barriers included in the US Constitution?

2. Why did the US government begin to influence business at the end of
19th century?

3. How does the government regulate and control private enterprises
nowadays?

4. Why is this regulation necessary?

5. Why are foreign investments so important to the world economy?

6. Why must considerable value be attached to acts supplementing
international law?

7. How can a government confirm its desire for foreign private
investment? Give examples.

8. Why is advanced assurance against possible risks so important?

Threeteen