Abstract:
The main ambit of this research is to seek to find a link between bilateral investment treaties and foreign direct investment. This offers a contribution on the ongoing debate on the effect of bilateral investment treaties on foreign direct investment. In order to analyze this debatable role of bilateral investment treaties on foreign direct investment a case study of the recently signed Bilateral Investment and Promotion and Protection Act between Zimbabwe and South Africa (BIPPA) is carried out with a special focus on Zimbabwe. The argument is BIPPA contains many rights which investors can use against the host. These clear outlined rules increase investor confident which will result in flows of investments to the host nation. The rules have a disciplinary effect upon the host. This is further qualified by the notion that BIPPA will have more effect on the Zimbabwean side were the government have to convince investors that their property will be protected. Domestic policies will be highlighted as being in conflict with investors rights. BIPPA can thus be used as shield to these domestic policies thereby encouraging foreign direct investment. These treaties however have their own cost effects which will be categorized as reputational, sovereignty and arbitration. Other issues such as the effect of bilateral investment treaties on development will also be deliberated on.
