For economic ends
- Nepal needs to pursue economic diplomacy to bring in more foreign direct investment
Mar 30, 2015-
To maintain a sound economy in the competitive global arena, the role of economic diplomacy is crucial. Economic diplomacy encourages international investment and escorts the country along a prosperous path. After the establishment of the World Trade Organisation (WTO), the International Monetary Fund, UN Conference on Trade and Development, the World Bank and other economic forums, a policy shift in international trade appeared. Thus, economic activities were given more priority. After 1990, Nepal’s economy was liberalised upon the realisation that a state-led economy, without the partnership of the private sector, could not contribute to economic growth.
But Nepal is a country where political agenda dominate. Internal ‘politics’ take precedence over even foreign policy. There is always a disconnect between what is said and what is practiced. Our political class continues to believe in nepotism and political appointments over merit and competence. This is true also for diplomatic officials, as a certain number have always been politically appointed. These do not seem to have resulted in the flourishing of the national interest.
The contribution of agriculture to the entire Nepali economy is diminishing. Such a scenario demands the strengthening of economic diplomacy, as without it, the flow of foreign investment slows to a trickle. As a result of inert economic diplomacy, the country’s entire ratio of bilateral/multilateral trade is lopsided. For that, the political class is to blame.
Nepal has aimed to transition to a developing country by 2022. For that, it needs a massive amount of foreign investment in development infrastructure. From 1956 to 2015, 12 periodic plans aiming to ameliorate the socio-economic status of the country have been implemented. If we evaluate the hitherto ‘accomplishment’ of the state, we have attained less than expected. Nepal’s economy still relies on the monsoon and agriculture. The export rate is deplorably low and the trade-deficit is sky-rocketing; it is approximately one-third of the Gross Domestic Product. Nepal, therefore, desperately needs to seek out dimensions of economic diplomacy to enhance the economic interest and expand and tap new markets.
As a post-conflict country with poor economic indicators, Nepal needs a large amount of investment. For that, Nepal’s first priority should be presenting its actual information about internal resources, its capability, and economic status of the country to the international arena in order to attract capital. To bring in Foreign Direct Investment and bilateral and multilateral aid, Nepal should be strategic in easing its economic policies. Besides, there is an urgent necessity to strengthen the Ministry of Foreign Affairs via the allocation of adequate budgets and the staffing of experts so that Nepal can efficiently advocate for its economic agendas in the inter-national arena.
Furthermore, the code of conduct for Nepali envoys and officials should be implemented strictly. The provision of orientation classes and trainings for diplomats should be revised in time. Nepal has not been able to make adequate efforts in spreading its culture. Economic diplomacy, thus, can lead to a transfer in technology and the seeking of new destinations for out-bound Nepali labourers.
Prioritising the economy
To negotiate trade-related agreements, to manage economic aid, to promote national trade internationally, economic diplomacy can play a vital function. But to achieve all these, the ‘traditional’ concept of economic diplomacy should be revised and the institutional competency of the Ministry of Foreign Affairs needs to be strengthened. There should be corresponding relations with line ministries and other government agencies.
As a landlocked country, situated amid the world’s emerging powers, China and India, Nepal’s economic diplomacy possess a relatively high value than other emerging agendas. Nepal needs to be more concerned with economic activities. Tackling the emerging global economic conundrum has been a great challenge. Based on the state’s resources, each country formulates its own economic policies. But, Nepal has not been able to prioritise its economic policy scientifically as per the necessity of contemporary times. Nepal has not given adequate thought to the training of ‘economic diplomats’. The state needs to concentrate on scrubbing all hindrances on the path toward stronger economic diplomacy.
Pranjali is the author of the novel Tuin
Published: 31-03-2015 09:24