The Bangladesh government is making statements that it is making good and friendly environments for investments in Bangladesh, but the current legal scenario is very different. According to UNCTAD, in the past six years after the signing of the bilateral investment treaty with India in 2009, Bangladesh only signed two more such treaties. But these two treaties that Bangladesh signed with the United Arab Emirates in 2011 and with Turkey in 2012 are not in force. So, technically, Bangladesh did not sign any active bilateral investment treaties in the past six years! Bilateral investment treaty is an agreement between two countries to protect the investment of foreign investors. The first bilateral investment treaty was signed in 1959 and since then, 3,271 such treaties have been signed between more than 179 countries. Bangladesh signed 30 bilateral investment treaties till 2015. Among them, seven are not in force. Two neighbouring countries of Bangladesh, till 2015, signed more bilateral investment treaties than Bangladesh has done. India signed 84, with two being terminated and 10 not being in force, and Pakistan 50, 22 of which are not in force. In addition, Sri Lanka signed 29, with one being terminated and four not being in force. In 2014, foreign direct investments in South Asian countries rose to $41 billion and India has the most of it and that is $34 billion; and the second is Bangladesh and Pakistan, with $2 billion each. The main reason is that South Asian countries have concluded 204 bilateral investment treaties and 41 other investment agreements with several countries. Almost 42 per cent of these bilateral investment treaties are signed by India. So, it is obvious that India will make a better deal on investment rather than Bangladesh because foreign investors always looked for the legal protection of their investment. For making better deals with foreign investors, India nowadays is amending their existing model bilateral investment treaty. It has already published a draft model treaty of 2015. Even Sri Lanka has a model bilateral investment treaty for attracting foreign investors whereas Bangladesh is yet to make any such move. After Saipem, the Italy vs Bangladesh case where Bangladesh lost, till now Bangladesh does not have any active bilateral investment treaty. It looks like Bangladesh is restraining itself to sign more such treaties. If there is no bilateral investment treaty, foreign investors will not feel that Bangladesh to be a secure place for making investments. Generally, a bilateral investment treaty creates obligation towards a states and gives some extra rights and privileges to investors. For this reason, foreign investors are looking for countries which are giving extra rights, privileges and special protection for their investment. After scrutinising all of these, they will make direct or indirect investment into that country. Mainly, developing countries such as Bangladesh needs foreign investment to strengthen the economy. So, it needs to sign more bilateral investment treaties with other countries. Though the signing of bilateral investment treaties is not like a simple contract, it needed expertise to sign it. But in several developing countries, the governments or those who are responsible for signing bilateral investment treaties are not aware of the legal consequences of provisions of such treaties. So, when a conflict of interest arises, they lost the case in arbitration tribunals. Argentina is the latest example of this, where the total economy collapsed because of bilateral investment treaty obligations made by Argentina. In addition, developing countries have shortage of expertise and experienced people in this field and both investors and the host state have to face some unwanted problems. Mainly, when dispute arises, there were several unlawful ultra vires actions taking place where primarily investor’s investment security falls in danger. Ruling parties of several developing countries ruling parties also portrayed that signing such treaties are their political achievement. For gaining more voting power, these people did not even consider properly negotiating with developed countries with whom they conclude treaties. Besides, the non-existence of structural process such as the model bilateral investment treaty makes things worse for developing countries to conclude a treaty. So, as a developing and economically fast-growing country, Bangladesh should make a model bilateral investment treaty for negotiating investment deals. Rights and privileges offered by Bangladesh to foreign investors should also be complied with in a model treaty as soon as possible. The efficacy and feasibility study of the offer made by Bangladesh should also go through a rigorous process. Because, we need to protect the interest of Bangladesh first, when bilateral investment treaty dispute arises. And no doubt, we need to sign more bilateral investment treaties for more FDI flows in Bangladesh to strengthen the economy. We also need to keep in mind that bilateral investment treaties are not handcuffs for Bangladesh; they are rather a big opportunity to strength our economy.
