CPEC AND INVESTMENT PROTECTION LAWS IN PAKISTAN: A LEGAL PERSPECTIVE

Abstract

China-Pakistan Economic Corridor (CPEC) is one of the most important investments in Pakistan’s history and it was an initiative of China’s Belt and Road Initiative (BRI). While CPEC boasts of a revitalized economy for Pakistan, local infrastructure upgrades, and increased regional connectivity, it also foregrounds the advantages and shortcomings of Pakistan’s legal and regulatory system to protect investments. This paper critically analyzes the existing legal and regulatory framework for investment protection in Pakistan as it relates to CPEC, outlining the available protections, institutions, protections available for dispute resolution for foreign investors in Pakistan. The paper argues that Pakistan has made significant strides in creating investment treaties and laws but it still suffers from breaches in implementation, vagueness as to legal meaning, and a lack of a policy of judicial consistency which has a negative effect on investor confidence. It includes a comparison of investment protections with countries that have a long track record of investment protection like China and Malaysia, and highlights the need for legislative clarity, institutional capacity building and improved transparency. Finally, it includes legal recommendations for improvement of investment protections to allow for positive outcomes for CPEC in the context of Pakistan’s broader economic development and sovereignty agenda.