Economic diplomacy is one of the most important appliances through which governments serve their national interests. Apparently, a developing country's multilevel system of economic interests in the global economic expanse lies in the successful application of economic diplomacy. Economic diplomacy is the process through which countries tackle the outside world to maximise their national gain in all the fields of activity, including trade, investment and other forms of economically beneficial exchanges, where they enjoy comparative advantage. In recent years economic diplomacy has gained in distinction, leading towards maximisation of national interests of developing countries like Bangladesh. In brief, economic diplomacy is traditionally defined as the decision-making, policy-making and advocating of the state-business interests towards outside world. Economic diplomacy requires application of technical expertise that facilitates and analyses the effects of a country's economic situation in its political climate and the way forward to influence the external actors for the benefit of the country.
Diplomacy like politics is the art of the possible that is the ability to construct arguments and implement practical measures in a way that yields maximum remuneration. But the remuneration in this case can only be expressed in the realisation of interests, be they tactical or strategic, short-term or long-term, local or systemic. Historical evidence suggests that the emergence of democracy and globalisation has transformed the role of political diplomacy toward economic diplomacy. Before the late 1970s, South Asia was one of the most highly-regulated economies outside the Communist bloc. Sri Lanka was the first to liberalise its economy in 1977, followed by Bangladesh in 1980, Nepal in 1986, Pakistan in 1989 and India in 1991.
Economic diplomacy is functional at three levels: Bilateral, regional and multilateral. Bilateral economic diplomacy plays a major role in economic relations. It includes bilateral trade and treaty, agreements on investment, employment or avoidance of double taxation, and a range of formal and informal economic issues between two countries. Bilateral Free Trade agreements have been the order of the day, being implemented by many countries around the world. The main task of economic diplomacy is to achieve optimum benefits, from the viewpoint of serving national interests, focusing on the country's economic potential and geo-economic position. In other words, economic diplomacy is needed for realistically evaluating one's own opportunities and elaborating methods for handling the competitive advantages that are available. These are primarily factor advantages, among which raw material sources and production potential consequently come forward as interchangeable priorities for countries with a transition economy.
The process of globalisation and technological advancement has drawn the attention of developing countries, for which the nation-states are engaged in a fierce competition for economic gains and at the same time seek cooperation with other like-minded states to mould regulatory institutions in their favour. Economic diplomacy for Bangladesh is guided by the principles of: promotion and protection of the national interest; promotion of regional integration in adherence to the UN values; promotion is international cooperation for consolidation of universal peace and mutual respect among all nations, respect for international law and treaty obligations as well as the seeking of settlement of international disputes through negotiations, mediation, conciliation, arbitration and adjudication, and promotion of a just world order.
Today, we can talk about the achievements of Bangladesh's economic diplomacy from the viewpoint of finding a balance of interests that can be reached where the objectives of individual states or their economic integration intersect, and not from the perspective of pressure or discrimination. In economic diplomacy, it is important to find factors that will yield the greatest payoff both today and tomorrow, in the short term and in the long term.
The need for placing greater emphasis on economic diplomacy is now universally recognised. Politics no longer drives economics. Economics must drive politics. Economic considerations must remain in the forefront of efforts to achieve foreign policy goals. Bangladesh has been slower in recognising this than others. The people's real interests and the economic means for achieving them can be institutionalised in the civil society, as well as with the help of democratic regulations. In this way, prerequisites of sociopolitical stability in the country are acquired and, in the end.
For the success of economic diplomacy, developing countries like Bangladesh have to ensure steady growth in trade, technology and investment flows. Bangladesh should improve its communications link, both physical and cultural, with the regional organisations, by consciously involving itself in building roads, highways, airlines and promoting travel and tourism. Economic diplomacy requires all the finesse and knowledge of traditional diplomacy. In addition, it requires in-depth knowledge of economic analysis, commercial relations, both national and global trading rules, functioning of inter-governmental organisations, politics of trade and investment, and policy issues ranging from health/environment to the prudential supervision of insurance. It also requires in-depth knowledge of corporate structures and functioning of major corporations of the host-country.
It is necessary to impart the specialized knowledge so as to ensure that right from the start Foreign Service Officers are adequately equipped to handle economic work. Certainly the Foundation Course for the Foreign Service Officers can only deal with generalities. Specialised courses, therefore, need to be devised for mid-career training - particularly for officers going abroad for economic assignments as First Secretary/Counselor. It is important to strengthen the diplomats' connectivity with own countries.
A roadmap must be devised so that diplomats are better equipped with state-level information including investment opportunities and tourism-related details. Emphasis right from the beginning should be on the importance of networking with the public and private sector, academic institutions, etc. Training in the corporate sector can be given more importance. A point that needs to be driven home at every stage is that contrary to a common misconception, economic work is very much a part of the mainstream of diplomacy. IFS officers need to be reassured that specialisation in economic diplomacy would in no way hamper their prospects for career enhancement but will exhilarate career advancements. The World Trade Organisation (WTO) runs an annual training programme, which is regularly attended by officers from the Commerce Ministry.
The possibility of regularly deputing Foreign Service officers for such training should be explored. Extensive use should be made of latest technology, for example, by establishing hyperlinks with websites of states, trade and industry bodies, etc. both for creating awareness as well as for promotional work. The concerned Foreign Affairs Ministry should periodically review the financial outlay for economic work, particularly in respect of the missions in the major target countries, with a view to optimising the returns. There should be greater reliance on local talent, particularly at junior levels, in the commercial wings of the missions. Moreover, economic diplomacy should be supported with research that is stellar to empirical studies and focuses on a practical base.
The writer is Professor in Government and Politics and acting Dean, Faculty of Law, Jahangirnagar University.
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