6 - Divesting for Development

Summary

This chapter imagines how proposals, aimed at facilitating the divestiture and exit of foreign investors, might have offered an alternative to problems that purport to be solved by international investment law. There is not much talk of alternatives as they have been banished by the discursive and material power of investment law. Displaced are fifty-year-old proposals aimed at facilitating the divestiture and exit of foreign investors that were introduced by Argentinian economist Raul Prebisch and elaborated upon by US-based economist Albert Hirschman. The chapter begins with a discussion of what is labelled constitutional dispossession, before turning to a discussion of the Prebisch–Hirschman proposal. An examination of this past yields fruitful insights into how we can generate substitutes for investment law, particularly as investment law’s foundations are being tested, even weakened, in some locales. The advantages of the divestment proposal are then identified and applied to the award in Bear Creek v. Peru, a dispute prompted by the revocation of a mining licence granted to a Canadian investor to which Aymara Indigenous communities in Peru were vociferously opposed. The object is to reimagine the status quo and reflect upon the prospects of far-reaching change.