Balancing FDI Pressures: Initiatives from Southern Africa

Abstract

This presentation considers the prospective development of policy frameworks for foreign direct investment in developing and emerging economies. It first considers the implications of two decisions on FDI in South Africa and the extent to which they dealt with potential inconsistencies between the state’s international trade and investment obligations and, respectively, domestic competition law and policy and constitutional principles. In identifying the circumstances which precluded any direct consideration of head to head clashes in these areas, it notes the absence of a state investment agency and screening at the establishment stages as key prospective elements in a more comprehensive investment framework. In recognition of the current development of a policy framework for FDI in South Africa, in the context of regional initiatives on the subject, the paper enumerates items for prospective inclusion in this area. The items are drawn from recent and contemporary developments in FDI law and policy in both developing and developed economies. The paper concludes with references to the difficult balancing acts which are required in this area as developing economies attempt to maintain attractiveness as destinations for FDI and retain, or recover, policy space in relating to national economic and political priorities.