The legal regime of foreign investment in Sudan and Saudi Arabia, as in other countries, cannot operate in isolation from politico-economic factors general to the international arena; nevertheless, such a legal regime also reflects national policy, and it is, accordingly, necessary at the outset to describe not only the general factors, but also Sudanese and Saudi national policies towards foreign investment.

The new trends in the international investment climate

There was much controversy surrounding the international law relating to foreign investment. Such controversy was at first due to the conflict among many forces released at the end of the Second World War. The ending of colonialism prompted forces of nationalism, which swept the Third World. Many developing countries were at one time colonies, mostly of industrialized Western powers from where foreign investment traditionally comes. Accordingly, developing countries chose to cling to their independence and were suspicious of any foreign relationships which might seem to endanger the newly obtained sovereignty. The newly independent states agitated not only for the ending of the economic dominance of the former colonial powers within their territories but also for a new world order which would permit them to regulate and control all economic activities in their own territories and to have access to world markets on an equitable basis.