For developed countries, Das said, it was an important element of their aggressive three-pronged approach to secure an expansion of opportunities for their economic operators. Now the third prong, that is, the expansion of opportunities for their investors, is sought to be achieved through an agreement on the protection of investors' rights. The fact that there has been a slowdown in the momentum in the OECD MAI process should not lull developing countries into believing that the proposal will not be pushed in the WTO in the near future, Das said. Past experience has shown that the internal differences among the major developed countries were forgotten when it came to extracting concessions from developing countries. The investment talks give them an opportunity to soften the ground for the march of their investors into developing countries.
Investment is an important geo-political tool to project the home country's interests effectively.
The major developed countries will not let slip this important opportunity. They will resolve their internal differences and push these proposals in a concerted way. Hence it will be wrong for developing countries to be complacent about it, Das said. A multilateral agreement on investment of the type which is being sponsored would bind the developing countries to all time commitments on constraining their options for channelling the foreign investment into useful sectors and priority geographical regions as also for managing the flows in such a way as to avoid problems for their balance of payments and exchange-rate stability. The type of multilateral agreement canvassed is not going to enhance investment.