Economic Diplomacy--Basics
Kishan S Rana
Rana/2009
1. Context
• Eco Dip is process through which countries
advance external economic interest
• Key elements: trade, investments, aid, tourism
• Issues have multiplied, are intertwined; nonstate actors co-opted in T/2 and T/3 process
• Most states scramble for right mix of
structure, policy and method, to take
proactive advantage of globalization
1. Contd.
• Globalization accelerates interdependence,
but response of developing world uneven; few
at forefront, others stagnate
• Eco Dip is expression of governance: hinges on
vision, efficacy, organization and motivation
of multiple actors
• 1976 Lomé Convention’s textile preferences:
why did Mauritius succeed?
2. Key Ingredients
A. Beyond govt ministries, it is business units,
financial sector, chambers, thinktanks that
must be harnessed. PPP works best.
B. MFA & eco agencies need harmonization;
combined ministries, or joint operations.
C. Export promotion + FDI mobilization are top
tasks; specialized agencies + optimal use of
embassies.
2.Contd.
D. Regulatory framework is responsibility of
govt – managing FTAs, regional accords,
NTBs, anti-dumping; harmonization among
agencies vital.
E. Tasks at home, and at embassies, are
different; MFA network has vital role.
F. Well resourced, motivated, & trained dip
mechanism delivers value
3. Stages of Eco Dip
• FIRST: Salesmanship: main focus on exports of
products and projects, consultancy services,
manpower, expertise. Aid management is also
major task.
• SECOND: Networking + Advocacy: using home
& external partners to widen reach, build
mutually beneficial connections. Home
institutions in learning phase.
3.Contd.
• THIRD: Regulatory Management: negotiation
of bilateral and other FTAs, regional
diplomacy, use of WTO and other agencies,
image building; domestic management of
group interests & ‘whole of govt’ approaches.
All phases overlap; moving to higher one still
demands work on the earlier stages
5. Good Eco Dip Management
• Decision process more open & plural; official
agencies have service role; in & out placement
of officials.
• Trade policy formulation brings in non-state
actors, benefits from their advice; take NGOs +
others to multilateral conferences & bilat
negotiation.
• Capacity building, esp. training of officials.
5. Contd.
• Regional diplomacy: variations, such as
‘growth clusters’ practiced by ASEAN, China;
innovative groupings such as IBSA, BRICs;
needs joint work by MFAs & eco ministries.
• Sub-state actors, such as provinces, cities, play
their own international role
• Direct diplomacy by heads of govt focuses on
economics, business delegation
6. Country Brand
• Countries now seen as brands, driven by
image
• Country brand needs presentation in
‘powerful, attractive and differentiated way’;
but ‘rooted in reality’
• Image affects all aspects of external dip
• Countries seek branding and re-branding
• Complex art, results not always clear
6. Contd.
• Brand audit’ establishes base line, needs
honesty, objectivity
• Must involve all stake-holders, brand needs
wide ‘ownership’ + support
• Public-private partnerships work best, to
produce united, goal-oriented action
• Should guard against over-marketing
7. Eco Dip in Field
• Embassies act as agents serving home
business & economic actors
• Special export focus on new products,
unexploited markets and niches
• FDI promotion via innovative actions, smart
‘selling’ of home destination
• Eco growth and integration produces reverse
flow of FDI, indirect role of embassies
7. Contd.
• Eco dip integrates with political + other forms
of diplomacy, including culture, education,
media, S&T, and public diplomacy
• Emb acts as best information source on the
target country, with ability to give holistic
advice, suggest trade-offs and leverage
• Entire emb team should be devoted, in direct
or indirect manner, with eco promotion
8. Promotion Methods
• Assess real situation, objectively.
• Use both wide catchment generation + pursuit
of identified targets.
• Use locals & their “success stories”.
• Outreach is central; involve all diplomatic
sectors, from culture to consular services +
available agencies + diaspora.
• Develop regional approach, e.g. in dip corps
Rana/2009