Chalfen Memorial Lecture
Dr Karl Sauvant, Executive Director of Columbia University Program on International Investment, formerly Director of the Investment Division at UNCTAD, addressed the topic of the 2006 Chalfen Memorial Lecture focusing on three main issues: 1) Why did the issue of Transnational Corporations (TNCs) arise in the UN? 2) What happened to the efforts at the UN and elsewhere and why? 3) Where do we stand today?
Dr Sauvant argued that the orientation of the regulatory framework for foreign direct investment (FDI) is a function of the balance of the costs and benefits that governments perceive is associated with FDI. According to Dr Sauvant this evaluation plays itself out at the national, regional and multilateral levels as regards the geographic scope of any instrument, the balance of the rights and responsibilities of the principal partners in the investment process and the implementation of investment instruments (incl. their voluntary vs mandatory nature).
Dr Sauvant argued that during the 1970s, the balance of costs and benefits was seen to be negative -- and this was addressed at the multilateral level, with a focus on the responsibilities of TNCs, but with weak implementation mechanisms. Since the mid-1980s, the balance is seen to be strongly positive -- with facilitating instruments at all levels, a focus on the responsibilities of host countries and strong implementation.
Future developments of the international policy and legal regime will depend again on how the balance will be perceived. Dr Sauvant cautioned about the potential for a future "backlash" against foreign investment, stemming in particular from criticism within developed countries (in light of recent strong inward investment in sensitive sectors). However, the approach towards FDI will eventually take place at the multilateral level, reflecting the global nature of TNCs.
This was the third in the Chalfen Memorial Lecture series, which was established by British American Tobacco to honour the memory of Stuart Chalfen.
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