Author: Muharem Rusiti
Photo by Evangeline Shaw on Unsplash
Economic diplomacy and statecraft have increasingly assumed importance and gained prominence over the last half of a century in the sphere of international affairs. Economic aspects have gradually become a central factor not only for the well-being, prosperity, and domestic political stability of a nation but also for the strengthening of its position and influence in the global arena.
Broadly speaking, economic diplomacy and statecraft is defined as the use of diplomatic recourses and economic tools to advance a nation’s strategic goals. Economic diplomacy can help a nation to safeguard and promote its interests by influencing international policies and norms, promoting bilateral and multilateral trade agreements and cooperation, opening markets and facilitating business activities of corporations abroad and attracting foreign investments. It also bolsters measures such as financial aid, loans, and sanctions as means of achieving foreign policy objectives and exerting geopolitical influence and conditioning.
Current international developments and the set of new dynamics and challenges affecting the world in recent times will predictably influence conduct in forthcoming years. Rising geopolitical tensions and new rivalries between major established and emerging superpowers and changing global balances and the trend toward a multipolar ecosphere could impose fierce competition between nations for economic gains. A backlash against globalization and mounting sovereignism in a yet globally interconnected planet, fast-paced technological transformations and advancements, and the growing weight of new players alongside institutionalized and state-actors – such as corporations and civil society movements – in shaping world affairs, have made the global governance system and the conduct of international relations for nation-states a more complex realm.
If nations want to promote and safeguard their strategic interests globally and optimally position their countries within the 21st century world and its evolving scenarios, challenges, and opportunities, governments must constantly adapt and proactively engage in international affairs. They must place even greater emphasis on and create well-defined frameworks for economic diplomacy and statecraft, by designing new and regularly updated strategies of global engagement. Frameworks must seek to balance economic and trade cooperation with strategic foreign policy aims and fully exploit the set of tools offered in this domain, both at bilateral and multilateral level.
Moreover, it is also equally important for nations to constitute highly-specialized units of economic diplomacy and statecraft within their Foreign Affairs Offices and train the necessary personnel. Policymakers must thoroughly deal with such issues and act as special advisors to their governments, diplomatic missions, investment promotion agencies, associations of business and industry, chambers of commerce, and their overseas network. They should aim to do so by forecasting possible international developments, supplying them with insightful information, coordinating their work and providing them the necessary technical skills, direction, and guidelines to follow in order to successfully handle such activities and effectively defend and promote their strategic interests.
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