chapter  1
International investment and law
Pages 31

Globalization is the principal trend of the contemporary world. It is irresistible and its impact exists in every corner of the world and touches everyone’s life. An important feature of globalization is increasing and intensified cross-border economic exchanges, such as trade and investment. In the past, a distinction could be made between capital importing and exporting countries, or host and home countries for foreign direct investment (“FDI”). Nowadays, however, as a result of globalization, FDI is both imported and exported by developed and developing countries alike. Differences in political, economic, and legal systems, history, and culture are no longer obstacles to FDI. In fact, the economic development of almost all countries is closely linked with, if not heavily dependent upon, the inflow of FDI, even though the degree of dependence on it may differ from country to country. It is often the case that the very legitimacy and survival of a national government may depend on the performance of FDI.