ROLE OF BILATERAL INVESTMENT TREATIES IN ECONOMIC DEVELOPMENT:PAKISTAN’S PERSPECTIVE

Bilateral Investment Treaties (“BITs”) have played a double-edged role in the economic development and progression of Pakistan. It is claimed that BITs have aided in attracting inward Foreign Direct Investment (“FDI”) in a variety of sectors in Pakistan. However, BITs have also narrowed down Pakistan’s policy-making space impacting the country’s domestic decision-making capabilities and shifting the balance of power in favour of foreign companies. In many clauses of the BITs, there are serious issues such as an expansive definition of “foreign investment” and the presence of “stabilisation clauses” which results in the leverage shifting towards foreign companies.