International trade, Foreign Direct Investment (FDI) and Overseas Development Assistance (ODA) are the three most important features of economic diplomacy. Among the developing countries, some are proactively pursuing the basics while some have been reactive to the international economic relations. Bulk of the developing countries are placed in between the two. Divergence of economic diplomacy among the developing countries fairly produces variation to their external economic settings. It is fundamental to distinguish viewpoints of the developing countries (e.g., Brazil, Russia, India and China – BRIC) on their economic diplomacy (see Table 1) within the international and political economy.
Table 1: Comparing Features of Economic Diplomacy of the BRIC
Brazil Russia India China
Active and outward-looking economic diplomacy; intends to be the leading trading country of Latin America; ‘branding’ Brazil; vigorously pursuing potential markets abroad; and ‘marketing’ Brazil as a modern leader in the development of technology Top-down and reactive to changing unilateral economic interest; promoting coercive economic diplomacy; focusing on regional integration; recouping economic space of the former Soviet Union; diversifying economy; retaining status as a key oil and gas channel for Europe; and attracting FDI Active but basically pursuing protective economic diplomacy; prioritising regional trade; instituting ASEAN–India FTA (AIFTA); boosting exports; attracting FDI simplifying its regulations and targeting NRIs; setting up of own aid agency; and training of diplomats to be financially and economically informed Conducting aggressive economic diplomacy; focusing on global market, foreign trade and FDI; exercising strategic aid programmes as the tool of economic diplomacy; and employing sovereign wealth fund to invest in multinationals for strategically beneficial, non-commercial and geopolitical rationales
As of 2012, Gross Domestic Products (GDPs) of China, Brazil, Russia and India are US$8.25 trillion, $2.4 trillion, $1.95 trillion and $1.9 trillion respectively. In the days to come, one may foresee that a cluster of the developing counties could change their economic diplomacy in the direction of the BRIC. The rationales before the dynamism are the following three: increasing their international trade, attracting FDI and making assistance for development cooperation available. Consequently, for a developing country like Bangladesh, there are significant lessons to be learned from the practices of economic diplomacy by the BRIC.
Despite a few comparable aspects, BRIC is sustaining their goals and strategies of economic diplomacy with some identical initiatives. These are pluralistic practices of foreign economic policy, widespread networking, and a ‘whole government’ approach. All are facilitated by overseas missions of the BRIC. They are more focused on promoting their economies, building image as well as branding nations. They continue to negotiate with international economic system, set up standards at multiple institutes, and deal with multi-actor groupings and associations. BRIC is advocating productive relationships with their neighbouring countries. Their efforts on economic diplomacy facilitate trade and industrial development as well as enterprise growth. BRIC’s economic diplomacy is more focused on attracting FDI inflow.
Branding their nations has been a key instrument of BRIC’s economic diplomacy to sustain as important destinations for foreign investment. They are concentrated to train their Foreign Service officers and diplomats to be better acknowledged with international economic relations. Indeed, BRIC has put significant emphasis on strengthening, consolidating and integrating their initiatives of economic diplomacy.
Bangladesh may not be able to follow the whole of economic diplomacy exercised by the BRIC. Even a particular country’s entire initiatives on economic diplomacy may not be suitable for Bangladesh. The lessons Bangladesh could learn from the emerging BRIC are: how to coordinate the country’s goals and strategies of economic diplomacy, how to consolidate Bangladesh’s economic diplomacy functions, how to market ‘Brand Bangladesh’, how to negotiate Bangladesh’s economic issues globally, how to build economic alliances regionally and bilaterally, how to train Bangladesh’s diplomats and its civil servants on the acumen of commercial and economic diplomacy, and how to engage multi-stakeholders in Bangladesh’s economic diplomacy. All these require identifying which economic diplomacy approach Bangladesh should follow. It would enable Bangladesh to better uphold its overseas business and overall economic interests.
As long as governance of a developing country works in unanimity with a procedure open to consider choices from diverse actors, one may come across the pertinent approach of economic diplomacy. Crucial is to continue better economic policies at home and effective economic diplomacy. Since amalgamating the two produces the capability of a developing country to project its image abroad. The alternative may turn into a vicious circle. However, producing a receptive climate for branding of a developing nation like Bangladesh requires two important things: one, increasing country attractiveness, and two, coordinating initiatives on economic diplomacy.
Basically, economic diplomacy is a continuous course of action. Its outcome may not be evident within a short timeframe; rather it could take a decade or even longer. Hence, economic diplomacy may not at times be successful with a global economic scenario that is changing very fast and sometimes without any prior notice. Indeed, this is a dilemma. Economic diplomacy has to be pursued as part of a long-term policy approach of a developing country. It would facilitate economic interest. Bangladesh’s economic diplomacy should be guided by three basics: increasing exports, FDI inflow and managing regular aid flow. The country should not split economic diplomacy from its political diplomacy.
Some emerging countries, e.g., BRIC, have amalgamated their foreign policy agenda, economic and public diplomacy. ‘Image building’ plus ‘nation branding’, indeed, public diplomacy is a frequent practice to the BRIC’s economic diplomacy. Public diplomacy is highly relevant to Bangladesh. Economic diplomacy of Bangladesh could be benefited from ‘mutual learning and exercising the best practices’. Diplomatic networks of the Ministry of Foreign Affairs (MoFA), Bangladesh, must be attuned with changing global economic diplomacy. This could facilitate to the consolidation of Bangladesh’s foreign affairs and its economic promotion, a key instrument for economic diplomacy management.
The Writer, Mohammad Jasim Uddin, is a Research Fellow of the Bangladesh Institute of International and Strategic Studies (BIISS)
