---

The concept of Economic Diplomacy grew side by side in response to expansions in dimensions of what is conventionally known as Political diplomacy. Ever since the Bretton Woods days and the Post World War 11 Development Cooperation initiatives in institutionalizing development cooperation, economic diplomacy continued to gather momentum over the years.

Even when the Cold War was at peak, amidst the then bipolar world scenario, countries resorted to economic assistance, thus registering a paradigm shift from the conventional political and military alliances. For post-colonial developing countries, inter-state relations necessarily hovered around issues like ODA, grants and technical assistance to finance development requirements. Therefore the transition to economic diplomacy was propelled more in a setting that witnessed emerging development challenges on one hand, and inadequate development finance on the other.

Flow of resources remained inadequate and below levels, despite consensus through international conventions. However the commitments were reinvigorated through development discourse over the past few decades - that stretched from Pearson Commission to Brandt Commission all the way to Paris Declaration on Aid Harmonization (2005) and later Aid Effectiveness Consultations (2009).Despite some progress on these counts, key challenges remained in the trade-off between bilateral and multilateral economic assistance.

Much depended on the pace and outcomes of stages, negotiations, and modes of Development Dialogue. Most of this remains "work in progress'. However on successful conclusion of Millennium Development Goals, (MDGs), Sustainable Development Goals (SDGs) presented a comprehensive framework to achieve development targets with key indicators and timelines. Parameters of economic collaboration prioritized SDG implementation, in addition to structured alignment with country development strategies.

For Bangladesh, Economic Diplomacy has received due importance and focus as key element of our external relations just after Bangladesh achieved independence. Despite the challenges with regard to relief, recovery and rehabilitation to build up a war-ravaged economy since early 1972, Bangabandhu's government recognized the need to identify and focus on economic and social development components in the context of expanding our foreign relations.

Thus the basis of our economic diplomacy was crafted and set on course just after independence, to achieve further in Bangladesh's national interests. Strategic and policy interventions were warranted in subsequent over the years to support tackling development challenges, mainly for promoting our exports in international markets, as well for facilitating opportunities for overseas remittances.

The pandemic as challenge to development and restructured priorities for economic diplomacy:

The current pandemic has brought in severe challenges to global economic growth and overall social and economic development. The world had never been in such unclear and uncharted development course, as sustained recession, unemployment, declining trade and shrinking economies looms across countries. For most developing countries, conventional growth-supportive strategies are now supplemented by priority emergency assistance to mitigate impact of current recession - reflected through falling revenues, rising poverty levels and unemployment.

In the current context, there is a need to revisit the trends and gains through renewed focus on our economic diplomacy. We may consider reorganizing our strategy and components of economic diplomacy to overcome current challenges and better suit our requirements. This calls for restructuring priorities, and maximizing potentials of expanding bilateral and multilateral development partnership.

Proposed plan of action for economic diplomacy:

It would be useful to have a strategy-driven, program-focused and schedule-based Plan of Action to achieve targeted objectives for Economic Diplomacy. The Proposed Plan of Action (with short, medium and long-term components) should relate to overcoming current challenges and enabling the economy to move ahead with a view to attaining sustained economic growth on one hand, and on the other, derive extended benefits from development partnership.

This relates to concentrating on our current economic strengths, and diversifying the economy. This calls for paradigm shift to include potential sectors in additional to conventional growth drivers, that could add momentum to our growth process. Keeping in view the above, restructured focus on economic diplomacy should prioritize the following core areas:

(a) Combat Covid-19 pandemic and revitalizing the health sector:

The United Nations (through WHO) is expected to have a well-structured and intensively coordinated functional mechanism for efficient access to Covid-19 vaccines (on availability) for developing countries such as Bangladesh. The whole process should be based on following principles - ensuring safe and effective vaccines to people worldwide, easy access at affordable cost, and a sustained mechanism for broad healthcare coverage in the years ahead, Like all other countries Bangladesh is in obvious and critical need of the Covid-19 vaccines on urgent and priority basis. The Government decided to ensure Covid-19 vaccines free of cost for all citizens, and coordinating on priority availability and access.

The Government has allocated Tk.12,000 crore in current year's budget for procuring vaccines and interrelated programs and activities to combat the pandemic. Given that massive resources are required to procure vaccines, the Government has requested US$ 2.00 billion as emergency support from key Development Partners (DPs).While asking for resources from DPs, the Government may consider ensuring the following:

•    Given our current GDP per capita income level and that we are still among the 20 most Covid-19 affected countries, the DPs should be asked to consider including Bangladesh among countries who would be given the vaccine free of cost.

•    The second option would be to give required resources for vaccines to Bangladesh on grant basis or on extremely concessional terms (similar to World's Bank IDA assistance and ADB's concessional window Asian Development Fund (ADF).

•    The DPs must also confirm that assistance given for the Covid-19 vaccine should be on viewed independently of resources allocated within the ambit of respective country assistance program. The DPs should ensure there is no scaling down of resources in the Country Partnership Strategy.

Ensuring availability of the effective vaccines and the credible medical options to eliminate or weaken Covid-19 is the need of the hour. The National Task Force should coordinate with our missions abroad on priority basis - for prompt availability of medical solutions, and enable our pharmaceutical institutions start production of required vaccines and medicines. In addition our economic diplomacy should now incorporate Health diplomacy, seeking best practices of health infrastructure and efficient health services management. Areas of support should include support for initiatives as strengthening and expanding health infrastructure and Public-Private Partnerships (PPP)s for Health sector.

(b) Ensure higher overseas remittances:

Despite the pandemic, Bangladesh's Overseas Remittances continued to rise satisfactorily. However we may find it challenging to sustain the level of remittances should the pandemic persist beyond the current year. Given the prolonged pandemic and probable lingering effects even after the pandemic weakens, we should undertake prior precautions to see that Overseas Remittances continues to remain a key driver of our economic growth.

While there are possibilities of several expat workers to return to their jobs abroad, a few sources of employment, may not yet be open for Bangladeshis. Given these uncertainties, our economic diplomacy  should intensify efforts to ensure employment opportunities of expatriate Bangladeshis are duly retained. We must ensure Bangladeshis can return to their jobs abroad.

Keeping this in view, negotiations with foreign governments and companies should be prioritised at this stage. There may even be cases where Bangladeshi migrants can fill in overseas vacancies caused due to exit of workers from other countries. Side by side, we should relate our remittance increase strategy to the existing and proposed skills development programs of the government, and exploring new markets for overseas employment in the post-Covid scenario.

(c) Increased earnings through exports expansion:

Despite the pandemic, performance of the export sector remains relatively impressive. Ready made Garments (RMG)  accounts for 80% of our total export earnings and about 12.% of GDP. In order to retain continued impact of this sector as stimulus to economic growth, we need to strengthen efforts not only to comply with meeting requirements of current delivery and supplies, but also through accessing markets that we have comparative advantage, as well capacities to bridge supply-demand gaps, due to unfulfilled obligations by our export competitors. Bangladesh’s Economic Diplomacy thrust should envision promoting Bangladesh's Economic Diversification, Agriculture, SMEs and Information Technology in the medium-term to long-term.

(d) Promoting economic diversification through Agriculture, ICT, SEZs and SMEs:

Bangladesh has effective and sustainable gains in agriculture mainly through government policy support and enterprising role and contribution of the farmers. Bangladesh’s agricultural efficiency is well manifested by exemplary success in food production, and efficient supply and distribution. The Government's sustained efforts and efficient farming has significantly contributed to this.

An appropriate instance on effective and credible stakeholder engagement in agriculture is well manifested through Shykh Seraj's Agricultural Promotion Approach that advocates mainstreaming agriculture in national development policy and comprehensive development discourse, This approach also successfully showcases potentials of exporting agricultural skills and initiatives as well as crop diversification and urban farming. This adds value to innovative farming tools in both rural and urban settings, and broadened stakeholder engagement.

Bangladesh is now well-positioned to export agriculture and farming skills, practices and gains to several countries. Our Agricultural Diplomacy could further strengthen our national economic interests, and contribute to strengthening food security. In the global context, Bangladesh should also consider suggesting - International Food Bank, International Commission on Prevention of Hunger and Famine and Global Forum on Efficient Food Security mechanisms. Our Economic Diplomacy could efficiently support these initiatives.

Based on the Digital Bangladesh approach, Bangladesh has demonstrated exemplary performance in Information Technology (IT) and related products and services. The IT promotion and expansion including Industrial Parks and broadband networks should enhance Bangladesh's prospects on being efficiently positioned in global and regional markets.

This would add to our GDP growth and overall resource mobilization, stimulate opportunities for training and employment of IT specialists within the country and abroad. The ICT sector is well-set to be a significant growth stimulant in the medium-term. On implementation, the Special Economic Zones (SEZ)s and further expansion of Small and Medium Enterprises (SMEs) will stimulate manufacturing, and facilitate diversification of the economy.

(e) Post-Graduation requirements:

Bangladesh is expected to graduate from the LDC category in 2024.Our Economic Diplomacy should aim at supporting the structural and functional transformation in the economy - mainly relating to enhanced productivity and economic competitiveness. Improved human capital and labor skills and mobility well matched with skills and programs to diversify the economy, will enable meeting the Post-Graduation transformation. For smooth transfer to higher middle income by 2024 followed by transition to high-income status in 2041,Bangladesh has to overcome challenges in low productivity, high informal unemployment, as well as substantially reduce poverty and inequalities.

(f) Other supportive initiatives:

Bangladesh retains a significant and credible position in global and regional initiatives on Supporting Climate Change Adaptation and Disaster Risk Management Bangladesh's economic diplomacy should be aligned to support activities and programs on these. Further to this our economic diplomacy should support extensive training and fixed-term assignments of government officials in international agencies and institutions.

(g)  Regional Cooperation and Integration (RCI) Programs:

Leveraging on benefits and gains from active role and participation in Regional Cooperation and Integration (RCI) programs could be an important focus in our Economic Diplomacy thrusts and dimensions. Bangladesh is actively engaged in Regional Cooperation and Integration (RCI) programs mainly in South Asia. Bangladesh has consistently been active in SAARC, SASEC, BIMSTEC, BCIM etc. However these RCI arrangements have limitations to deliver due to geo-political realities and complexities in inter-country relations.

Bangladesh should gear up efforts to be associated with Association of Southeast Asian Nations (ASEAN) - either as an Observer or inclusion in ASEAN plus mechanism, and subsequently associated with Asia Pacific Economic Forum (APEC).Alignment with ASEAN and APEC will expand Bangladesh's economic gains and support our economic competitiveness.

Strategies and policy perspectives on achieving the above:

The proposed Mid-Term to Long-Term Plan of Action on Economic Diplomacy should be structured to better achieve key economic targets, institutional strengthening, intensify business-driven approach through private sector engagement, stimulate resource mobilization. Simultaneously, effective domestic policies will enable further efficiency in economic diplomacy. For effective gains in economic diplomacy - key strategic requirements should include - enhanced authority and responsibilities for Bangladesh missions abroad, private sector engagement in economic negotiations, focus on performance-based and results-based approach, and governance-related improvements,

(a) Enhanced authority and responsibilities for Bangladesh missions abroad:

To better achieve targeted objectives of economic diplomacy, our representations abroad need to further strengthened with enhanced authority and resources. The Terms of Reference for Ambassador/High Commissioner/Head of Mission should incorporate significant supervisory and managerial authority over the economic branches and divisions in the mission, undertaking economic roles and functions, and representing other relevant ministries of the government. AS the Mission represents the whole government, it would be useful to empower the Ambassador/Head of Mission with adequate authority to assess, monitor and negotiate with counterparts in respective countries of representation, on matters relating to our economic interests.

Ambassadors and representative from Ministry of Foreign Affairs should also be actively involved/engaged in consultations on with international development cooperation with multilateral development financing institutions ( such as World Bank. Asian Development Bank, International Monetary Fund).The Government may also consider a merit-based  Senior Policy Research & Economic Pool (to work in Economic and Commercial wings) under the supervision of the Ambassador/Head of Mission.

(b) Engaging private sector in economic diplomacy:

Engaging private sector representation, especially in bilateral economic and commercial consultations and negotiations would add value to broadening our economic diplomacy policy thrusts and perspectives. The Prime Minister's Office in coordination with Ministry of Foreign Affairs may consider nominating private sector participants for economic negotiations, in close coordination with the Federation of Chambers of Commerce and Industry. This would enable widening stakeholder buy-in and participation, resulting in further benefits from our economic diplomacy.

(c) Performance-based and Results-based approach:

To assess outcomes of our efforts and programs through economic diplomacy, Performance-based and Results-based approaches would be significantly useful. Two approaches should be relevant in this context - either the conventional Input-Output Model that would reflect output outcomes in both quantitative and qualitative terms, based on inputs  (resources or initiatives) through either policy interventions, budgetary support or resource mobilization.

Side by side, there could be an integrated Design, Monitoring and Evaluation Framework that would track performance and monitor results on periodic basis. Several countries emphasize on both performance-based and results-based indicators for annual budget exercise, project implementation and sector assessment. In the case of Economic Diplomacy, the proposed Framework will enable identifying challenges, detecting deficiencies and undertaking required policy interventions

Strengthening bilateral and multilateral development partnership:

There is need to revisit the current trends in our bilateral and multilateral development partnerships. Development assistance currently accounts for less than 4% of our Gross Domestic Product (GDP).Developing countries like Bangladesh need to undertake intensive exercise to identify and address current constraints and challenges that impede development effectiveness. Keeping this in view the Government may consider establishing a National Commission on Review on Effectiveness of Development Partnership.

Policy focus, improved governance and institutional strengthening:

Institutional strengthening, knowledge and information dissemination, applying best practices reinforced by intensive monitoring and evaluation and inter-agency collaboration should be useful for our Economic Diplomacy. Broadened role and enhanced collaboration by Parliamentary Standing Committees for Ministry of Foreign Affairs, Finance, Commerce and Overseas Employment can contribute to this exercise. In addition, Experts Consultative Committees to advise the ministries concerned could also be useful. Improved governance reinforced by efficient, accountable and transparent institutions and programs, and consultations-driven policy thrusts, will be useful.

Dr. Mohammed Parvez Imdad, M.Phil., Ph.D. (Economics) Ph.D. (Public Administration and Governance) is a Senior Economist, Governance Specialist, International Consultant and Columnist.He is also the member of Advisory Board at Centre for Governance Studies (CGS). 

This article was originally published on The Asian Age.  
Views in this article are author’s own and do not necessarily reflect CGS policy.