Foreign direct investment (“FDI”) is one of the significant sources of social and economic change in developing countries. It can be used in terms of transferring capital, technology and administrative skills to the host country. The Board of Investment of Pakistan (“BOI”) emphasizes that due to Pakistan’s cheap manpower and low production cost coupled with many other reasons, it is a perfect market and location for FDI. This study has examined several aspects of FDI in Pakistan’s context, such as the role it has played in the growth of Pakistan’s economy and may well play in the future. The factors which play motivational and decisive role in foreign investors’ decisions to invest or withdraw their capital such as economic attractions, deterring factors and legal protections afforded to FDI in Pakistan. Existence of deterring factors requires the host State to adopt special measures and offer added protection to foreign investors such as protection through bilateral investment treaties (“BITs”), investment agreements and domestic laws. Therefore, the main concern of this study is the legal protection afforded to FDI in Pakistan. The study has investigated three fundamental factors, directly related to protection of FDI in Pakistan their role and aftermaths; the BITs, the role of higher judiciary and legal protection under domestic statutes. To investigate the first factor, a number of BITs executed by Pakistan have been selected and examined in the light of old and new treaty arbitration cases against Pakistan. It has been revealed that successive Pakistani governments have used BITs as political publicity vehicle and executed this instrument in a haphazard manner, without meaningful negotiations and without understanding the full legal implications. An absolute lack of competency, skills and know-how to negotiate and draft BITs on the part of the Government of Pakistan (“GOP”) has been revealed. The investigation on the role of judiciary, has found a powerful judiciary the Supreme Court of Pakistan (“SCP”) which has emerged as an assertive organ of the State. In last about one decade the SCP has expended the scope of public interest litigation (“PIL”) for enforcement of fundamental rights under unique ‘suo moto’ jurisdiction and endlessly interfered directly in commercial and FDI matters. The current study differentiates judicial activism and judicial interference and argues that, there is a very thin line between these two, and that encroaching on the sphere of other State organs may possibly convert judicial activism into judicial interference. The study has also examined several domestic statutes related to FDI and has found weak legal protection afforded to FDI under domestic laws of Pakistan. It has revealed that all three factors have exposed Pakistan to costly international arbitration initiated by foreign investors, shattered their confidence which in turn affected inward flow of FDI. To enable GOP to attract the required FDI in the desired sectors this thesis recommends reforms to address these deterring factors and also adopting a pragmatic balanced approach insuring respect of sovereignty of Pakistan and protection of assets of foreign investors.
| Identifer | oai:union.ndltd.org:bl.uk/oai:ethos.bl.uk:699012 |
| Date | January 2015 |
| Creators | Awan, Mohammad Raheem |
| Publisher | University of Bedfordshire |
| Source Sets | Ethos UK |
| Detected Language | English |
| Type | Electronic Thesis or Dissertation |
| Source | http://hdl.handle.net/10547/621833 |
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