How Developing Countries can Adapt Current Bilateral Investment Treaties to Provide Benefits to Their Domestic Economies

Bilateral investment treaties (hereinafter BIT ) have been created with the goal of promoting economic prosperity through the facilitation of international investment flows. The idea was to facilitate these investment flows by the opening up of secure channels for foreign direct investment (hereinafter FDI ), stabilizing the investment climate, granting protective investment guarantees, and providing neutral dispute mechanisms for injured investors. Since their inception in 1959, BITs have experienced a massive and sudden proliferation . . . which has been . . . a \u27remarkable\u27 event in international law[,] and as of the end of 2008, there were over 2,600 BITs in circulation. Many of these treaties have been signed between developed countries and developing countries for the purpose of encouraging FDI capital to come into the developing countries and stimulate their markets, economies, and infrastructures. Unfortunately, while this seems to be plausible and desirable in theory, the reality is that these BITs have effectively taken control of the developing countries\u27 markets, resources, and capital and provided little to no benefit in return. Fortunately, current global factors are providing a prime opportunity for developing countries to re-shape their current BITs through slight de-liberalization in order to help facilitate the desired FDI inflow while ensuring that the investments do in fact improve their economies. The following paper will attempt to show that a pseudo-interventionist approach to BIT provisions coupled with the promotion of the recent changes to the alternative dispute resolution (hereinafter ADR ) mechanisms already in place can help developing countries entice FDI while actually promoting domestic markets and improving domestic economies. Furthermore, this paper will explain how the present economic situation can help encourage these de-liberalized actions and defeat the problem of collective action, by providing an ideal atmosphere for developing countries to work together without the fear of discouraging desired FDI