1. Economic Diplomacy--Basics
Kishan S Rana
Rana/2009

2. 1. Context
Eco Dip is process through which countries advance external economic interest
Key elements: trade, investments, aid, tourism
Issues have multiplied, are intertwined; non-state 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

3. 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?

4. 2. Key Ingredients
Beyond govt ministries, it is business units, financial sector, chambers, thinktanks that must be harnessed. PPP works best.
MFA & eco agencies need harmonization; combined ministries, or joint operations.
Export promotion + FDI mobilization are top tasks; specialized agencies + optimal use of embassies.

5. 2.Contd.
Regulatory framework is responsibility of govt – managing FTAs, regional accords, NTBs, anti-dumping; harmonization among agencies vital.
Tasks at home, and at embassies, are different; MFA network has vital role.
Well resourced, motivated, & trained dip mechanism delivers value

6. 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.

7. 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

10. 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.

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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