The Difference of Interests Between Host State and Investors Related To Fair AndEquitable Treatment in Bilateral Investment Treaty

The host state requires a source of funds in its national economic development which requiresinvestors to increase their income to be able to run the national economy which results in people'swelfare. however, before investing, the investors consider several factors related to investment, such aslow labor costs, abundant natural resources, low production costs, large market share, the existence ofsupporting facilities, and a consumptive lifestyle. these things are then called the investment climate. onthe other hand, developing countries frequently make it difficult for investors who will invest their capitalin their countries, such as making it difficult to obtain permits, making changes in legislation due toregime change, changing the way of the government due to changing government structures, and so on. inthe international investment, these kind of changes are called the dynamic inconsistency problem (dip).it then makes the investors feel insecure and not protected by the host state. when the national interests ofthe host state are confronted with the interests of investors regarding violations of the fet clause, thereare many ways that can be done so that the two parties are not disadvantaged in the investment. one ofthe effective ways that can be done is determining limitations regarding the fet clause and thereasonable expectations of investors with the aim of keeping the investment climate stable.