A Rule of Law approach to Inclusive Economic Development: Supporting Fair and Equitable International Investment Agreements in Least Developed Countries
As a driver of inclusive economic development, the rule of law enables the design and implementation of legal and policy frameworks that are fair, transparent, coherent, and supported by predictable enforcement mechanisms.
International Investment Agreements (IIAs) are a key policy tool to attract Foreign Direct Investment (FDI) as a source of financing for development. However, they entail significant risks for Least Developed Countries (LDCs) due to their traditionally unbalanced and sometimes unpredictable nature, which can prevent FDI from contributing to LDCs’ development objectives.
Adopting a rule of law approach to IIAs negotiation and management can help LDCs minimize the risks associated with these agreements. Such an approach is geared towards increasing the coherence, predictability, and transparency of negotiation and application of these agreements, as well as achieving a fair and equitable balance of rights and obligations for the parties.
As the only global intergovernmental organization exclusively devoted to promoting the rule of law to advance peace and sustainable development, the International Development Law Organization (IDLO) supports LDCs in implementing a rule of law approach to IIA negotiation and management.
Through the Investment Support Programme for LDCs (ISP/LDCs), IDLO provides technical assistance and complementary capacity building to governments and private sector entities on investment-related matters, including IIA negotiation. The programme has provided technical assistance to institutions in The Gambia and Uganda.
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