A critical examination of the symmetry of Ethiopia’s bilateral investment treaties

Abstract

After tearing down of colonization the new emerging countries, most of them are African countries, vow to enhance their economy. One of the mechanisms to jump- start the economy was through foreign direct investment (FDI). Foreign investors, though agree as to the high potential of least developed countries, were not comfortable with the then existing protection accorded to foreigners. Therefore, the two options left for them were either to pull back their investment or blindly invest with its all consequences. The latter option was neither feasible nor logical. As a result, developing countries and investors’ state began to conclude BITs to show their commitment to protect the investor and investment at large. The modern BITs are European in origin; the first one was signed between the Federal Republic of Germany and Pakistan on November 25, 1959.1 Ethiopia as one of the least developed countries concluded various BITs with different countries with the view to securing FDI. The close examination of BITs Ethiopia concluded, we could find both North-South BITs type, i.e. Ethiopia and developed countries like Germany and south- south BITs type i.e. Ethiopia with developing countries like Iran. In this study, an attempt is made to find out whether these BITs are symmetric, in terms of having balance terms and conditions of the treaty. The research found that the terms and conditions of BITs Ethiopia concluded are not favourable for the country and call for the review of those treaties. To put differently the country made a huge concession to please foreign investors, which ultimately defeat the whole essence of BITs. The broad definition, the standard of treatment, issue of expropriation and compensation, the guarantee of remittance and arbitration clause can be cited as an example.