The most accepted dogma establishes that foreign direct investments are great enhancers of a nation richness and increase socio-economic standards. Thanks to foreign investment, grand projects can be accomplished, as well as increase growth and development. Indeed, it is hard to deny the potential benefits of high levels of foreign direct investment. However, as often happens, things are not always as good as they seem. As Nussbaum points out, the first that get benefited from the increase of wealth resulting are the elites. If the elites do not engage in policies of wealth redistribution, the benefits do not reach the poor. Moreover, we could suggest that the increase of wealth and growth as a result of foreign direct investment is not the goal but a collateral effect of investment. The main goal of investors may not be to promote development, but personal profit. Thus, investment may not be directed to the projects or sectors where it is needed the most, but those which are more profitable. Investors demand their investments to be protected and may threat to place their assets somewhere else. Therefore, they hold a great power to put pressure on local governments to implement lax legislation that benefits investors, as well as protection for its investments. Legislation tends favor the rights of investors, but it does not enforce obligations. This situation is specially preoccupant in those cases where investors impose unfavorable terms and clauses to those nations who heavily rely on foreign investment for socio-economic development. Pursuing profit may lead to disregard for socio-economic rights or environmental protection, especially where they may represent a smaller profit margin. Furthermore, these selfish interests can also lead towards short-sighted behavior that does little to promote the development of the receiving country. As Cézanne Samuel establishes in its article ‘The Dark Side of Foreign Direct Investment: A South African Perspective’, foreign direct investment may increase vulnerabilities, and there is a global trend for non-financial corporations to structure its investment around maximizing shareholder value instead of placing its focus on long-term growth. I believe that an international legal framework needs to be established in order to enforce obligations on investors. It must be global, for local regulations may just move investment from one place to another. Great investments should be linked to great responsibility.
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