Moss. Mitu Mony

Introduction: 

The concept of diplomacy is crucial to understanding international relations. It consists of the techniques and procedures for conducting relations among states. Certainly, diplomacy remains the only normal means for conducting international relations and the opposite is war. 

 

It embraces a multitude of interests, from the simplest matter of details in the relations between two states to vital issues of war and peace. When it breaks down, the danger of war or at least a major crisis is forthcoming.

 

The word “diplomacy” comes from the 18th-century French phrase “diplomat,” which is derived from the ancient Greek term “diploma,” which roughly translates to “an object folded in two.”

 

Definition:

According to the Oxford English Dictionary, diplomacy includes:
1. managing ties between nations by negotiation;
2. adjusting and managing these connections through ambassadors; and envoys;
3. The business or art of the diplomatist;
4. Skill or address in the conduct of international intercourse or negotiations.

 

Sir Ernest Satow defines diplomacy as the application of intelligence and tact to the conduct of official relations between the governments of independent states… the conduct of business between states by peaceful means.

 

According to Henry Kissinger, “Diplomacy is adapting differences through negotiations.”

 

The definition given by George Kennan goes “diplomacy is the process of communication among governments.”

 

According to Harold Nicholson, “Diplomacy is guiding international relations through negotiations, and the manner in which it manages ambassadors and envoys of these relations, and diplomatic working

 

Economic Diplomacy: 

States make their foreign policies primarily based on economic and commercial diplomacy. While military and security diplomacy are also important, if one takes “peace-making” seriously, one should be able to create their own hierarchy of diplomacies.

 

A State would reject economic/commercial diplomacy at its own peril because it is so vital to building relationships with other States and between States. In fact, there is now a close relationship between the formulation of foreign policy and this kind of diplomacy.

 

 
According to Pigman, commercial and economic diplomacy had already existed long before many of the present-day States were ever conceived.

 

Commercial and economic diplomacy includes not only concerned with developing framework legislation aimed at the international community as well as offering bargaining strategies in interstate commerce and investment.

 

The idea of economic diplomacy developed together with the generally known as political diplomacy’s increase in scope. Economic diplomacy has been gaining ground ever since the Bretton Woods era and the Post World War 11 Development Cooperation programmes institutionalised development cooperation.

 

Countries turned to economic aid even during the height of the Cold War, in the context of the then-bipolar world, marking a paradigm change from the traditional political and military alliances. Inter-state interactions had to revolve around topics like ODA, grants, and technical support development necessities for post-colonial emerging nations. 

 

As a result, the shift to economic diplomacy was accelerated more in an environment with rising development concerns on the one hand and insufficient development on the other.

 

The term “economic diplomacy” refers to the employment of diplomatic techniques and tactics to advance a nation’s economic objectives. Economic diplomacy is essential for Bangladesh, a developing nation in South Asia, to promote international trade, draw foreign direct investment (FDI), and strengthen economic relations with other countries.

 

Bangladesh has advanced considerably in recent years, despite the fact that there are still many opportunities and problems in this area. Let’s examine some of Bangladesh’s major economic diplomacy issues and opportunities.

 

 
Much depends on the speed and results of the many stages, negotiations, and Development Dialogue approaches. This is still largely “work in progress.” 

 

The Sustainable Development Goals (SDGs) provided a thorough framework to attain development targets with important indicators and timetables after the Millennium Development Goals (MDGs) were successfully completed. In addition to organised alignment with national development plans, economic collaboration criteria prioritised SDG execution.

 

 

Economic diplomacy has been given the attention it deserves as a crucial component of Bangladesh’s external relations since the country’s independence. Despite the difficulties in addressing relief, recovery, and rehabilitation to rebuild a war-devastated economy from early 1972, Bangabandhu’s administration understood the necessity to pinpoint and concentrate on economic and social development components in the framework of enhancing national development.

 

 
Thus, shortly after Bangladesh’s independence, the foundation of our economic diplomacy was developed and set on a road to further advance Bangladesh’s national interests. 

 

In the years that followed, strategic and policy interventions were necessary to help addressing development issues, primarily for boosting our exports in foreign markets and for opening up possibilities for abroad remittances.

 

 

Challenges for Bangladesh in Economic Diplomacy:

 
Limited market accessibility: 

 

Bangladesh has trouble diversifying and expanding its export markets. Its exports may be hampered by trade restrictions, such as tariffs and non-tariff barriers, imposed by different nations. For Bangladesh to increase its export base, it is essential to remove these obstacles and negotiate advantageous trade agreements.

 

 

Infrastructure development: 

Economic diplomacy faces difficulties due to inadequate infrastructure in the areas of transportation, energy, and logistics. To entice foreign investors, promote trade, and build economic links with other nations, an adequate infrastructure is required. 

 

To increase its competitiveness, Bangladesh must make investments in infrastructure development.

 

 

Skill development and human capital:

In order to fulfil the demands of a changing global economy, Bangladesh must concentrate on producing a qualified workforce. The country’s attractiveness for foreign investment and the promotion of economic cooperation can both be improved by strengthening the education and training systems, particularly in industries with strong growth potential.

 

 

Environmental issues and climate change: 

Bangladesh is particularly susceptible to the effects of climate change, which include increased sea levels and harsh weather. For long-term economic growth and resilience, it is essential to address climate change and incorporate environmental sustainability into economic diplomacy initiatives.

 

 

Limited negotiating power: 

Bangladesh confronts difficulties as a result of its small size and weak position in the global economy. As a result, it frequently finds it difficult to negotiate advantageous trade and investment agreements with bigger and more powerful economies.

 

 

Uneven trade: 

Bangladesh is strongly dependent on exports, particularly in the ready-to-wear industry. The nation must overcome obstacles to diversify its export base and lessen its reliance on a select number of industries or markets. The solution to trade imbalances is essential for longterm economic expansion.

 

 

Competition from neighbours in the region: 

Bangladesh faces competition from nations like Vietnam, India, and China, which all provide cheap manufacturing and labour. Bangladesh must increase efficiency, innovation, and value addition in its export industries if it wants to stay competitive.

 

 

Political instability: 

Governmental problems and political unrest can thwart efforts at economic diplomacy. To inspire investor confidence and draw foreign direct investment, it is crucial to maintain stability, practise good governance, and maintain consistency in policy. 

 

Bangladesh has in the past faced political instability and problems with governance, which can have an impact on efforts to engage in economic diplomacy. Building trust and confidence among foreign investors and business partners requires consistency in policies and governance.

 

Non-tariff obstacles: 

Exporters from Bangladesh may encounter difficulties due to non-tariff obstacles imposed by trading partners, such as technical restrictions, sanitary and phytosanitary measures, and intellectual property rights. 

 

To maintain fair treatment in global trade, compliance with these barriers necessitates capacity-building initiatives and effective diplomatic involvement.

 

Technological Advancement: Bangladesh’s economic diplomacy depends on keeping up with swiftly changing technologies. To increase productivity, promote innovation, and update industries, access to contemporary technology and knowledge transfer are essential. 

 

Building trained human resources, developing collaboration with technologically sophisticated nations, and investing in research and development are all necessary to close the technology divide.

 

 

Opportunities for Bangladesh in Economic Diplomacy:

Ready made Garment industry: Bangladesh has a robust ready-made clothing sector, which significantly contributes to the country’s export income. Bangladesh can further solidify its position in the global garment market and draw in foreign investment by taking advantage of its competitive advantage in this industry.

 

Partnerships in trade and investment: Bangladesh has the chance to develop stronger alliances in trade and investment with nations and regions all over the world. Bangladesh may lessen its reliance on a small number of markets and increase economic resilience by diversifying its trading destinations and luring FDI. 

 

Building on current economic ties with countries like China, India, and Japan, Bangladesh can further its cooperation in fields including infrastructure development, energy, and technology transfer. Increasing trade links with these nations can give access to markets, capital, and technological know-how.

 

Regional Integration :Bangladesh is strategically positioned in South Asia and has the potential to gain from efforts to integrate the region’s economies. Opportunities for increasing trade and investment flows can be created through enhancing regional collaboration through groups like the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic collaboration (BIMSTEC) and the South Asian Association for Regional Cooperation (SAARC).

 

 

Digital economy and technology: Bangladesh can benefit from new prospects by embracing the digital economy and emerging technologies. The nation may be able to develop into a centre for innovation and technical developments with investments in digital infrastructure, e-commerce, fintech, and information technology services.

 

 

Energy sector development:

Bangladesh has a lot of potential in the energy sector, which includes natural gas, renewable energy, and electricity production. The effectiveness of economic diplomacy initiatives can be increased by creating a strong energy industry and looking into cooperating in the energy sector with other nations.

 

 

Export market diversification: Bangladesh has the chance to look into unexplored markets outside of the usual places like Europe and the US. Increasing trade links with developing nations in Southeast Asia, Africa, and the Middle East can assist to diversify export markets and lessen reliance on a small number of trading partners.

 

 

Bringing in foreign direct investment (FDI): Bangladesh has had success bringing in FDI in industries including textiles, medicine, and information technology. Bangladesh may increase FDI in order to promote economic growth and technical progress by establishing an atmosphere that is friendly to investors, enhancing infrastructure, and providing incentives. 

 

 

To capitalise on this momentum, the government must make the business environment more friendly by streamlining rules, enhancing governance, and removing administrative roadblocks. Providing incentives and advocating for investment-friendly policies might help FDI inflows even more.

 

 

Promote regional connectivity: 

Bangladesh’s strategic location presents chances for the Belt and Road Initiative (BRI) and the Asian Highway Network to be promoted as examples of regional connectivity projects. By enhancing trade, investment, and interpersonal interactions, improved connectivity can support economic diplomacy initiatives.

 

 

Diversification of trade and investments: 

Bangladesh has historically relied on the ready-made garment industry to generate export revenue. Economic diplomacy can benefit from exploring and diversifying into new industries like agribusiness, pharmaceuticals, and IT services. Diversification efforts can also be strengthened by looking for new markets and establishing trade relationships with non-traditional partners.

 

 

Strengthening diplomatic ties:

Developing stronger diplomatic relationships can open up opportunities for commercial collaboration with both established and developing nations. Bangladesh is able to negotiate advantageous trade deals, settle trade disputes, and advance its economic interests internationally through diplomatic channels.

 

 

Expanding regional and bilateral trade agreements: 

To improve market access for its goods, Bangladesh should actively pursue trade agreements on both a regional and bilateral level. Free trade agreement (FTA) and preferential trade agreement (PTA) discussions can assist in removing tariff and non-tariff obstacles, hence expanding trade opportunities.

 

 

Climate Change and Renewable Energy: 

Bangladesh can position itself as a pioneer in renewable energy and climate change adaptation as a nation that is particularly susceptible to the effects of climate change. Bangladesh can entice foreign assistance and financing while tackling environmental issues by promoting clean and sustainable technologies, utilising its plentiful solar and wind resources, and putting in place climate-resilient infrastructure projects.

 

 

Bangladesh should prioritise strategic planning, efficient policy implementation, diplomatic discussions, and ongoing interaction with foreign partners in order to take advantage of the potential and overcome the problems. In order to achieve the goals of Bangladesh’s economic diplomacy, cooperation between government organisations, businesses, and civil society organisations will be essential.

 

Conclusion:

 

As Bangladesh works to achieve sustainable economic growth and development, economic diplomacy brings both opportunities and problems. Bangladesh may take advantage of opportunities through regional integration, industry diversification, attracting FDI, and emerging as a global leader in climate change adaptation by tackling the difficulties of constrained market access, infrastructure shortfalls, technical improvements, and political stability. 

 

Effective economic diplomacy initiatives will aid Bangladesh in building stronger alliances, increasing exports, luring investors, and strengthening its standing in the international economy. 

 

 

 

By Miss Mitu Mony

Honors, International Relations

Jahangirnagar University. 

 

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