Vale Columbia Center - Roundtable on States and State-Controlled Entities as Claimants in International Investment Arbitration

International investment by State-controlled entities (SCEs) is on the rise. State-owned enterprises (SOEs), especially from Europe, have long been active players in the world foreign-direct-investment (FDI) market. They have been joined, in the past few years, by a wide range of SOEs from emerging markets, including from China, India, Russia, and Singapore. China’s outward FDI – some 80-90% of which is undertaken by SOEs – doubled from $27 billion in 2007 to $56 billion in 2008 and appears to have reached that level again in 2009, in a climate where world FDI flows dropped by 40%. SWF’s, and especially the Middle East, are also of note and, with cumulative FDI reaching $65 billion by the end of 2008, are rapidly gaining prominence on the international stage. To that, portfolio investment by SWFs needs to be added; in the financial sector alone, total investments by SWFs are estimated to be around $100 billion.

Pieter Bekker and Theodore Posner are contributors in this event.