Under a jointly sponsored initiative between UNCTAD and a group of developing countries known as the Group of Fifteen (G-15),(1) seven of these countries - Egypt, India, Indonesia, Jamaica, Malaysia, Sri Lanka and Zimbabwe - negotiated eight bilateral investment treaties (BITs) between themselves. The event, the first of its kind, took place from 8 to 14 January 1999 in Glion-sur-Montreux, Switzerland. It was financially supported by the Technical Cooperation among Developing Countries (TCDC) Unit of UNDP and the Government of Switzerland. UNCTAD provided analytical material and resource persons to aid negotiators.(2)
The concluded BITs set out the definition and scope of the agreements, and include, provisions related to standards of treatment, expropriation and transfer of funds, dispute settlement, as well as provisions on entry into force, duration and termination of the agreements.
The new BITs bring the total number of BITs negotiated between all G-15 countries to 38 (see table 1). In addition, the 356 BITs concluded between G-15 countries and non-G-15 countries -- both developed and developing -- brings the total to 394 BITs by G-15 countries.
After intensive discussions, three BITs were negotiated between India and Zimbabwe; Sri Lanka and Zimbabwe; and Egypt and Jamaica, and were transmitted to their respective Governments for consideration. In addition, consolidated texts between Indonesia and Jamaica; and Jamaica and Zimbabwe on all key issues; and consolidated texts between India and Jamaica; Jamaica and Malaysia; and Jamaica and Sri Lanka on most provisions were agreed by consensus, ad referendum. Taking the already existing BITs into account, each of the seven participating countries will have a BIT with every other participating country if all BITs completed at the meeting enter into force.
The relevant documents were initialed ad referendum in the presence of the personal representatives of Heads of State and Government of G-15 countries and the Deputy Secretary-General of UNCTAD, Mr. Carlos Fortin, today at a closing ceremony in UNCTAD. "G-15 countries have undertaken to deepen the trade, investment and technology exchanges among themselves. FDI -- one to the other -- is one of the most effective means in this respect. The conclusion of BITs between themselves contributes to stimulating such investment. It is an important promotional tool", says Ambassador Anthony Hill of Jamaica, Chairperson of the G-15.
One advantage of bringing negotiators together in a single location to negotiate BITs is the possibility for negotiators to exchange experiences among themselves, thus strengthening the negotiating capacity of the countries involved in respect to the negotiation of any international investment agreements, including at the regional level. Mr. Fortin stated that, "We are pleased that this effort has yielded concrete results that further the interests of developing countries", and Jamaica´s BIT negotiator in Glion, Mr. Sheldon McDonald, added that, "what we have done here in one week would otherwise have taken two years - if not more".
By signing BITs between themselves, developing countries are sending a strong signal of their commitment to provide a predictable, stable and reliable legal environment for foreign direct investors, to stimulate investors´ confidence, and boost FDI flows. Indeed, outward FDI flows from developing countries have increased from 3 per cent of total global flows in 1980 to 13 per cent in 1997. Total outward stock of FDI by G-15 countries grew from $1.5 billion in 1980 to $57 billion in 1997 (see table 2). G-15 countries are important host countries of FDI, having attracted a total of $457 billion by 1997 (see table 3), 13 per cent of the total FDI stock in developing countries. Notwithstanding this impressive record, there remains a considerable potential for more FDI among developing countries.
1. The member countries of the G-15 are Algeria, Argentina, Brazil, Chile, Egypt, India, Indonesia, Jamaica, Kenya, Malaysia, Mexico, Nigeria, Peru, Senegal, Sri Lanka, Venezuela and Zimbabwe.
2. The principal background document was UNCTAD, Bilateral Investment Treaties in the mid-1990s (Geneva: United Nations), United Nations publication, Sales No. E.98.II.D.8, released on 7 January 1999. See press release TAD/INF/PR/99001.