Prime Minister Sheikh Hasinas recent directive to Bangladeshi diplomats is a significant move, marking a strategic shift that places economic diplomacy at the forefront. This shift is not just a local phenomenon but a global recognition that economics, not politics, now drives decision-making. Economic opportunities have become the cornerstone of political decisions, a trend that Bangladesh has been quick to align within its foreign policy.
Conceptually, diplomacy and foreign policy are interlinked. The latter is what a country does; the former is how it does it. However, in this era of modern diplomacy, economic considerations must remain at the forefront of efforts to achieve foreign policy goals. So, the question remains, "What is economic diplomacy?"
Economic diplomacy: Economic diplomacy focuses on a countrys economic relations with other countries to implement its foreign policy goals. It is the process through which countries tackle the outside world to maximize their national gain in all fields of activity, including trade, investment, and other economically beneficial exchanges, where they enjoy comparative advantage. There is a growing realization that economic relations substantially impact political ties between countries and will not work well until economic diplomacy is adequately pursued.
Economic diplomacy is a multifaceted discipline that demands the finesse and knowledge of traditional diplomacy. It also requires a deep understanding of financial analysis, commercial relations, global trading rules, and the politics of trade and investment. Policy issues, from health and environment to insurance supervision, are also integral. Furthermore, a comprehensive understanding of corporate structures and the operations of major corporations in the host country is crucial. This complexity underscores the importance of economic diplomacy in achieving foreign policy goals.
Economic Diplomacy of Bangladesh: Bangladesh started focusing on economic diplomacy after its independence in 1971. However, in recent years, economic diplomacy has gained distinction, leading to the maximization of the national interests of developing countries like Bangladesh. The government is focusing on economic diplomacy more than ever by engaging in trade and investment with many countries, including the Kingdom of Saudi Arabia, Japan, China, and India. Markets other than the USA and European countries also needed to be explored.
Since Bangladesh will graduate as a developing country in 2026, attention needs to be paid to those countries where Bangladesh could enhance its trade and business and benefit as a developing country. This decision aims to maintain the countrys graduation as a developing nation through increasing trade and exports. Prior to this, Bangladesh emphasized economic diplomacy to connect to more countries and find new avenues for bringing businesses to Bangladesh.
The government of Bangladesh has outlined a few roadmaps to achieve Smart Bangladesh by 2041. To help accomplish those roadmaps, the government has introduced two packages. One is the Economic Diplomacy package, and the other is the Public Diplomacy package. The economic Diplomacy package has five components, and these are:
1) More foreign investment.
2) More trade and export diversity.
3) Gainful employment of human resources both at home and abroad.
4) Transfer of technology.
5) Quality services to Bangladeshi Diaspora and others.
Significance of Economic Diplomacy: Bangladesh needs to focus on economic diplomacy to achieve its financial interests. It is expected to graduate from a least developed country (LDC) to a developing one by 2026. It also needs to adopt proper strategies for smooth and sustainable graduation. Emphasis on economic diplomacy is required to make the countrys economy more capable of handling uncertainties.
Embassies, consulates, and all other diplomatic representations of Bangladesh abroad must play a more proactive role in exploring new markets for new products. Therefore, the present day economic diplomacy is not practiced only by the professional diplomats working in Bangladesh missions abroad but also by the ministers, bureaucrats, businesspeople, politicians, etc., at home. Branding different Bangladeshi products in foreign countries through arranging trade fairs and fashion shows can be helpful. Though these events are taking place, the number of these events needs to be increased.
In economic diplomacy, it is essential to find factors that will yield the most significant payoff today and tomorrow, both in the short and long term. With articulated economic diplomacy, surviving in this free-market economy is easier. Hence, Bangladesh needs to realize the importance of economic diplomacy and pursue its foreign policy decisions accordingly.
For economic diplomacy to succeed, developing countries like Bangladesh must ensure steady trade, technology, and investment flow growth. Bangladesh should improve its communications link, both physical and cultural, with regional organizations by consciously involving itself in building roads, highways, and airlines and promoting travel and tourism.
Economic diplomacy has been a part and parcel of Bangladeshs foreign policy. Bangladeshs position in the world economy is now 35th. Bangladesh is now the fifth fastest-growing country in the world. The once bottomless basket is set to become the worlds 25th largest economy by 2036. This remarkable progress was made possible due to economic diplomacy. With the ongoing political fiasco that has been taking place internationally since the advent of the Russian-Ukraine war, piled with new challenges as the LDC graduation looms large, astute economic diplomacy is needed to ensure that the upward surge in economic growth continues.
The writer has completed his BBA and MBA from the Department of Finance, University of Dhaka
