Using Diplomacy as an Effective Tool of Economic Development

Using Diplomacy as an Effective Tool of Economic Development

Md. Joynal Abdin

The Diplomacy & Foreign Affairs , New Delhi, India , September 2013

The word diplomacy provides a picture of a group of people wearing official suits, ties, shining shoes and living a prestigious life abroad. They are the hubs to maintain good relationship among states, negotiating conflict or facilitating further deeper relationship.

Use of diplomats to achieve mutual interest started from ancient age. Use and forms of diplomacy in ancient China, ancient India, ancient Greece, Middle East, Europe was different based of aim and objective. Previously (informal diplomacy) a group of negotiators / diplomats were used to send into a particular states / region with a specific task. They used to negotiate the single issue with their counterparts. But today use of diplomatic mission (formal diplomacy) is more popular around the world.

We can classify diplomacy based on the objective and nature of tasks like peace-making, peace keeping; trade negotiating, war, partnership in economic development, cultural exchange, environment, and human rights etc. issues. From other aspect we are observing aggressors / allies to boycott aggressors, soft power diplomacy based of relationship and respect, gun board / military power diplomacy, public diplomacy and nuclear diplomacy in practice. From all the above types and forms of diplomacy we would like to discuss with the economic diplomacy and how it can be used as a tool of economic development.

Least developed countries (LDCs) like Bangladesh are suffering from scarcity of resources, over pressure from population growth, unemployment, extreme poverty etc. Existing internal resources are not enough for developing these nations by themselves. But without further economic development it is impossible to ensure basic needs of human life (food, cloths, shelter, education and health care). The goal of foreign policy of an LDCs country like Bangladesh may be shifted from existing “is to develop and maintain friendly relations with other States and foster cooperation with developed, developing and least developed countries, and various regional, sub-regional, political and economic groups” (goal of Bangladesh foreign policy) into ” is to develop and maintain friendly economic / trade relations with other States and foster cooperation with trade, commerce and manpower placement to developed, developing and least developed countries, and various regional, sub-regional, political and economic groups”.

That means the goal would be developing and maintaining friendly economic / trade relations with other states. It is necessary to deploy trade and business related professionals for better achievement in economic diplomacy. Usually LDC countries like Bangladesh use same set of negotiators in every platform. As a result they become hub of everything but master in none. Time have to develop different set of negotiators specialized in different field like (1) bilateral trade negotiators, (2) regional trade negotiators, (3) multilateral trade negotiators master in different WTO agreements, (4) separate set of negotiators for negotiating with development partners / donors, (5) trade promoters in the missions in aboard, and (6) supreme council of negotiators for coordinating all these platforms and harmonizing and directing uniformity with the national foreign policy.

To get a strategic platform to exploit the coming multilateral regime countries like Bangladesh has to priorities country promotion and branding, trade promotion, investment attraction, obtain and utilize new technology, besides managing better external economic assistance.

For attracting foreign investment countries needs to project a positive image in abroad. Country Branding would be essential, because without a brand image it would not be easy to get foreign investment. The government should promote the country at abroad, which is a primary action of economic diplomacy. The image of a country affects its trade, global politics, and international relations.

Economic diplomacy has to promote to mobilize investment, promote tourism and better management of national image. Investment mobilization would call for a global presence of the competent companies or internationalization of the local companies. Develop its tourist spots and their infrastructure to attract foreign tourists. For projecting a positive national image abroad, the political leaders have to be responsible about what they say regarding the country. They should know that the world media report what they say. Their statements can and do damage the image of the country. To build a good image country may need promotional activities in the world media.

The ministry of foreign affairs, the embassies and diplomats of the country are responsible for the projection of a ‘correct’ image of the country abroad. But their capacity to project a positive country image or change the undue negative perception may be limited. The diplomats abroad have to be proactive rather than reactive. The foreign ministry has to give importance to promote trade and development by organizing trade fairs, participating foreign exhibitions, organizing investors’ conferences and holding up B2B dialogues etc. The missions abroad have to be facilitators of joint business councils, joint chambers, joint trade facilitator taskforce etc. between the countries.

A positive national image can better promote products and services abroad and help to create a brand image of the products in the consumers’ mind. It would facilitate better market access, salesmanship, networking and regulatory (customs & procedural) management would facilitate the export of commodities, services and projects. Value creation of products is essential.

The missions abroad have to identify the demand for his country products in the host market and facilitate B2B interactions to promote export to that country. A leading least developed country (LDC) like Bangladesh should go for economic diplomacy to attract foreign investment.

Large unemployed population is a major problem in most of the LDCs. But this burden may be transform into resources if proper arrangement can be done through manpower export. Remittance is one of the main sources of foreign currency in many countries. Population growth of many developed countries is negative. Over populated countries like Bangladesh could negotiate with those countries to send professionals and semi-skilled workers to those markets. Diplomatic missions in the respective country has a great job to collect demands for professional / workers and making arrangement of proper placement of native people there. Thus economic diplomacy could increase manpower export as well as foreign remittance earnings of a country.

Ensuring proper education and training up people on latest technical know how is also important for proper growth of a country. Many developed countries are providing scholarship in higher education / short training / diploma facilities to the LDC citizen. A sincere diplomatic mission can facilitate more representative of respective country in affording these options. Thus he can play a vital role in technology transfer and up gradation and transfer of latest knowledge.

It needs technology for rapid development and industrialization. When TRIPS agreement will come into force on LDCs, then absorbing foreign technology will be costly and difficult to achieve. Before mandatory enforcement the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) LDCs should concentrate on obtaining it (technology) for industrialization.

A major problem of LDCs country’s product quality is inferior; as a result they failed to compete with superior qualitative products in local or export market. This is because they do not have upgraded technology. So facilitating technology up-gradation may boost up production. There are several international bodies working to facilitate technology transfer and technology up-gradation. Diplomatic mission to those countries can play a vital role to tie up local bodies with that international technology transfer organizations.

Industrialization would need infrastructure development, better utility services and other logistics support. All these require money. The government has to mobilize resources from domestic as well as foreign sources. The World Trade Organization’s (WTO) Aid for Trade to the LDCs could be a good source. Inviting foreign investment in major local infrastructure project may be another approach to build industrial infrastructure like deep sea port, sea port, highways, collocated industrial park etc. Maintaining good relations with the donor agencies / countries is a major task on the negotiators in this regard.

Replicating best practices could be a good means for development. It is quite easy to replicate any development models rather than inventing the same. Collecting best practices and disseminating to concern native agencies may be significant tasks of the diplomats. Ambassadors particularly to the countries developed with similar background could be careful to know best practices there and facilitate replication in his home country.

From the above discussion it is quite clear that, the diplomatic missions of a country have so many important roles to play for quick sustainable economic development of the country. Economic diplomacy could be a very effective tool to foster development of a nation.


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Md. Joynal Abdin

Development Researcher, Columnist and Author

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