International Investment Framework in Kuwait
Sarah Alturki
International Law - Edinburgh University School of Law - University of Edinburgh Graduate
Abstract
As Kuwait prepares for its 2035 Vision to become a “Financial and Commercial Hub”; attracting foreign investment has always been an essential part of that vision. Accordingly, Kuwait has taken steps to establish institutions that would screen and promote foreign investments like the Kuwait Direct Investment Promotion Authority (KIDPA), encouraged public-private partnerships through the Kuwait Authority for Partnership Projects (KAPP), planned the establishment of the Silk City Project which is a Special Economic Zone which seeks to attract forgiven investors. Kuwait also worked on strengthening of its financial institutions through Capital Markets Authority and the Central Bank. With the boost of these local initiatives, international law has also developed to form a new framework of investment protection and promotion. International Investment Law is a field of international law that regulates foreign investments in States. The international investment regime is mainly formed through bilateral investment treaties (BITs), Regional Investment Treaties, Free Trade Agreements that incorporate investment chapters (FTAs), and Multilateral Investment Treaties (MITs). Kuwait is party to 66 BITs which are currently in force and 6 MITs with investment provisions. Kuwait is also party to the World Trade Organization alongs with its Agreements regulating international investments. The field on international investment law has grown and developed significantly in the past two decades because of the rising number of BITs signed between States. These treaties now impose obligations related to expropriation, fair and equitable treatment (FET), full protections and security, non-discrimination and most favored nation (MFN). The area of law has also significantly impacted by the growth of Investor-State Disputes. Almost all BITs and Investment Treaties now include a provision regarding Investor-State Dispute Settlement (ISDS). Although Kuwait has taken the initiative to establish institutions that promote and protect foreign investments, these institutions and the regulations currently in place do not fully encompass the different international obligations imposed on Kuwait through international investment framework. The international legal framework will require structural domestic economic reforms and regulatory coherence. Accordingly, reflecting on the international investment framework, this papers seeks to propose particular institutional and regulatory reform Kuwait should consider to promote forging investment. The article will first provide and outline of the relevant international legal framework regulating to international investments in Kuwait. This article will then analyze and evaluate this international framework reflecting on the current investment promotion initiatives in Kuwait. The article will finally identify the areas where domestic economic reform is needed before proposing briefly a few solutions to fill the gap.
Keywords
investment law, international law, trade, foreign investments
