A/70/301 Dominance of neoliberalism and focus on extractive activities 62. The liberalization of international trade, the opening of markets to foreign investors and the development of international legal mechanisms have been strongly driven by neoliberal economic theory. Neoliberalism is an economic paradigm that champions the power of market forces and argues that, if left unregulated, markets will deliver global development. Neoliberalism grew in dominance in the latter part of the twentieth century and infiltrated many elements of development policy. Neoliberalism contains many tenets relating to international investment and free trade, including support for trade liberalization, the privatization of public services, a limited regulatory role for States and a link between increased FDI and growth in GDP. 63. Such tenets are consistent with, and therefore legitimize, the provisions of international investment and free trade agreements. Indeed, many leading international financial institutions endorse neoliberalism as a coherent economic theory that, if adhered to, will bring development to all. Yet that unquestioning discourse has obscured the vested interests and important human and indigenous rights implications of international investment and free trade regimes. It has contributed to a model of development that is measured by overall growth figures and gives little weight to whether that leads to a reduction in inequality or alleviates poverty, including among indigenous peoples. Moreover, the widespread and unquestioning endorsement of that economic theory, and its legitimization of free trade and investment agreements, can act as a barrier to cultivating the political will necessary for reform. 64. In parallel to neoliberalism, the development path many Governments have taken and continue to focus on is extractive activity. Extractive activi ty refers to economic activities focused on removing large quantities of natural resources to be used mainly for export. The natural resources being extracted include minerals, metals, oil and/or gas, water and products from forestry, farming and fishing. Many of the foreign investment projects that directly affect indigenous peoples include extractive activities. The competition between host States to attract foreign investment often leads to a race to the bottom in terms of social and environmental protection. Lack of coherence within international law 65. International investment and free trade law regimes have been developed as a separate strand of international law from human and indigenous rights standards. Despite the strong public interest issues at stake within international investment agreements and the customary legal status of many human rights principles, there are no formal enforcement mechanisms to ensure that trade and investment agreements uphold human rights. Furthermore, as discussed ab ove, the free trade and investment regime itself is diffuse, complex and opaque. There are many different arbitration mechanisms, rules and agreements, and a general lack of transparency. That undermines the abilities of policymakers and legislators to gai n a systemic picture of international investment and free trade regimes and their effect on human and indigenous peoples’ rights in order to develop effective options for reform. 15-12526 19/24