Focus on economic diplomacy: The priority tasks

Farooq Sobhan

Our missions abroad must be kept fully briefed and the Foreign Ministry must respond promptly to initiatives taken by our Ambassadors and our missions abroad. Our Ambassadors must be performance oriented. Their performance must be closely scrutinized. We must ensure that the right man is chosen for each post. Bangladesh simply cannot afford the luxury of non-performing Ambassadors. Economic diplomacy is vital to our survival and must be one of the key facets of government policy today.

The newly appointed Foreign Minister of Bangladesh, Mr. Morshed Khan, in his first day in office made it clear that he will be giving economic diplomacy the highest priority. In a meeting with the media he stressed that Bangladesh's Ambassadors must become the foremost salesmen of the country. Their performance would be judged on the basis of the foreign investment, exports and employment for Bangladeshis that they can generate. They must either produce results or they will be recalled.

Bangladesh is already in the throes of a serious economic crisis. The fact that this crisis is directly linked to the global economic crisis, will make the task of recovery a formidable challenge. In a shrinking global economy it will be twice as difficult to attract FDI, expand exports and find new jobs. Competition will be intense. In order to survive Bangladesh will have to make a special effort, both at home and abroad. The level of efficiency of the government as a whole, and BOI, BEPZA, EPB, NBR, PDB, in particular, must be improved manifold. Indeed in order to face this national crisis the country should operate on an emergency footing. Similarly our missions abroad should function on an emergency basis.

In Bangladesh today there can no longer be any doubt about the importance of economic diplomacy. The success of our economic diplomacy will require the full support and cooperation of all branches of the government. The Ministry of Foreign Affairs and our missions abroad must be equipped to shoulder this responsibility. Above all there must be a well coordinated collective effort which also includes the private sector.

The essential thrust of our economic diplomacy must be to enhance the image of the country. We need to convince people, even some of our neighbours, that Bangladesh offers excellent investment opportunities and that the overall investment climate is conducive to foreign investment. However, at the end of the day we need to remember that there has to be a great deal of substance and fact supporting what is projected abroad. In other words no matter how much we try, the appalling conditions prevailing in Chittagong port, cannot be ignored. The daily traffic jams, the power cuts and the high level of pollution in Dhaka cannot be wished away. Law and order problems, toll collection, shooting incidents, inside and outside the universities, are not calculated to encourage investment. At the end of the day these pressing problems have to be addressed.

Foreign investors, from the moment they arrive in Dhaka, must be encouraged to feel that in Bangladesh they can look forward to receiving the full support of the government, and that the Board of Investment can take care of all their problems promptly and efficiently. Time is money. In Singapore, on average, it should take no more than fifteen minutes from the time a passenger exits from the aircraft till he exits from the airport. In Dhaka today the average time is well over an hour. In fact the conditions both inside the terminal and outside at the Zia International Airport are calculated to give most first time visitors a very poor impression of the country. In Port Klang (Malaysia) the average time for a container to exit the port from the time a ship docks is seven hours. In Chittagong the average exit time for a container is measured not in hours but in days.

There are many sides to economic diplomacy. It is most commonly understood to mean furthering the country's economic and commercial interests. Thus attracting foreign investment, promoting exports and, in the case of Bangladesh, helping to find employment opportunities for our nationals, would be considered as priority tasks. This is where there is a compelling need for efficient coordination between our missions abroad and the private sector.

If a potential investor is interested in investing in Bangladesh or if one of our embassies suggests the possibility of developing a market in a particular country for one of our export products, how should they proceed? Do they write to the BOI or EPB, the Chambers, the Foreign Ministry or individual companies? At present no satisfactory arrangement exists. This problem could be addressed by establishing a committee, which could meet twice or thrice a week, which would include representatives from the Commerce Ministry, the different chambers, BOI, BEPZA, EPB and the Ministry of Foreign Affairs. This committee could be serviced by the Economic Wing of the Foreign Ministry. All communications could then be promptly handled by this committee, which would decide how best to deal with each case. A separate committee to deal with manpower problems could also be established.

Economic diplomacy also encompasses economic and technical assistance received by Bangladesh both bilaterally and from a variety of multilateral sources, the debt problem, investment agreements, avoidance of double taxation agreements, trade agreements and joint commissions. In the past competing for economic assistance, the terms and conditions of such assistance, were matters of paramount importance. Globalization and the new global agenda have prompted a significant shift in priorities. 'Trade not aid' is the slogan of the day. Nonetheless for a country such as Bangladesh foreign economic assistance still plays a very important role in our economic development. The thrust of our economic diplomacy has been to ensure the continuation, and if possible, the enhancement, of such assistance; at times this has meant dealing with irate donors and their complaints. The annual aid consortium meeting has for many years been the high point of the government's economic agenda. This meeting has been viewed by some as the critical factor in determining the success or failure of our economic diplomacy.

For developing countries such as Bangladesh, economic diplomacy has also meant playing an active, sometimes leadership role in multilateral agencies and conferences. Bangladesh has been chairman/coordinator of the 49-member group of Least Developed Countries for the past 25 years. Bangladesh has been closely involved in the preparation of the various action plans and programmes in support of the LDCs and the subsequent follow up action. In the WTO, the Second Committee of the General Assembly, ECOSOC, UNCTAD, ESCAP, the Group of 77, the NAM, Bangladesh has traditionally played a very active role in either highlighting the problems of the LDCs or the developing countries as a whole.

One of the major challenges facing our economic diplomacy will be the issue of duty free access to the United States and India for our exports. Dr. Badruddoza Choudhury as Foreign Minister and more recently Mr. Amir Khasru Choudhury, the Commerce Minister, visited Washington in this connection. Both these visits were extremely useful. The US government as well as the US Congress were fully briefed about the crisis conditions prevailing in the garment industry.

What will now be required will be six months of intensive lobbying in the US. The Bangladesh Embassy and the Ambassador will have to work round the clock. The Bangladesh caucus in Congress as well as the Bangladeshi community in the US will have to be fully mobilised. Bangladesh's case for duty free access must be understood and supported by the different power centers in Washington: the State Development, USTR, the National Security Council, Congress, the major buyers and retailers like JC Penny, Gap, Walmart, Nike, etc., the media, NGOs and above all influential think tanks and organizations like the American Enterprise Institute, CSIS, Brookings, the Woodrow Wilson Center, the National Endowment for Democracy, to mention only a few.

At the same time every effort should be made to obtain duty free access to the Indian market, which was promised as far back as Begum Zia's first government. Both the Foreign Minister and the Commerce Minister should visit Delhi at the earliest opportunity. Our relations with India should be developed on a broad range of issues on the basis of mutual benefit.

New markets in Japan, Australia, Eastern Europe and Africa must also be developed. Now that Bangladesh and all LDCs have been given duty free access to the Japanese and Australian markets, we should take full advantage of this. Not enough has been done to take advantage of the European Union's "Everything But Arms" (EBA) initiative in support of the LDCs. This initiative gives Bangladesh the opportunity to diversify its exports, particularly in the agro-processing sector.

Among the most noteworthy achievements of our diplomacy has been the creation of SAARC. Regrettably we have not been able to realise the full economic potential of SAARC. This has been primarily due to friction between India and Pakistan. The South Asia Free Trade Agreement (SAFTA) could be of immense benefit to the region as a whole. However, it will be essential to ensure that the smaller states in SAARC, such as Bangladesh, are adequately compensated by India within the framework of SAFTA. As a first step India should immediately open up its market to all the countries in the region while these countries will do so gradually.

Similarly energy cooperation among the countries of South Asia could transform the entire region, as could cooperation in the development and implementation of joint infrastructure projects. A Trans Asian highway and railway, a South Asian energy grid, the development of a deep sea port in Chittagong to service the sub-region, are only some examples of the enormous opportunities that exist today for cooperation in the region. Bangladesh's economic diplomacy must continue to give the highest priority to promoting infrastructure development at the regional and sub-regional level and to the implementation of projects in different sectors. Here too it is imperative to mobilise the private sector and NGOs in the region.

One of the path breaking initiatives taken by Bangladesh in recent years was the holding of the Tripartite Business Summit in Dhaka in January, 1998. The presence of the Prime Ministers of India, Pakistan and Bangladesh on the same platform endorsing the need for the joint development of their infrastructure and inviting foreign investors to look upon South Asia as a single market, sent a powerful message to the international business community. Efforts are under way to convene an annual South Asian business summit, which will hopefully be attended by the heads of the SAARC countries, as well as business leaders in the region. Such an initiative will be in tune with Bangladesh's economic diplomacy and should therefore receive the strong support of the government.

The export of manpower to the Middle East is another important achievement of our economic diplomacy. Today there are more than two million Bangladeshis working in the Middle East. Although Bangladeshi doctors, engineers and teachers had been working in Malaysia for some years, in 1985 the Malaysian government gave permission for semi skilled workers and agricultural labour from Bangladesh to work in Malaysia. This permission was given to only two countries, Indonesia and Bangladesh. This was made possible due to intensive lobbying and can be cited as another example of the importance of economic diplomacy. Today there are well over half a million Bangladeshis working in Malaysia. Priority attention should be given to Malaysia to ensure that this important market for Bangladesh's labour is preserved, while at the same time encouraging investment from Malaysia in Bangladesh.

Economic diplomacy for Bangladesh is therefore of paramount importance. We need to prepare our diplomats to shoulder this responsibility. Specialized training is a must. We need to also impart good negotiating skills to our diplomats. BOI, BEPZA and EPB need to be strengthened. Above all the Ministry of Foreign Affairs must be given the clearly defined responsibility for coordination. This coordinated effort is of vital importance. The economic wing of the Foreign Ministry must be strengthened. Above all the private sector must work closely with the government and its various agencies in all matters relating to economic diplomacy.

The key to the success of Bangladesh's economic diplomacy will be team work within the government. The Ministers of Finance, Foreign Affairs, Commerce, Industry and the two State Ministers of Energy must work closely together on policy formulation and ensure that all bottlenecks are removed. The existing systemic problems must be addressed. Speedy implementation is the key. It is pointless having investment seminars, workshops and conferences if there is no effective mechanism for follow up action. BOI's one stop service must receive the full support and co-operation of all the line ministries and agencies of the government in order to make it truly effective. The Privatization Board must speed up the process of privatization. The Privatization Board and BOI can work closely together in converting some existing public sector factories into industrial parks, thus overcoming the problem of finding suitable land for new industrial projects.

Given the gravity of the situation perhaps the Prime Minister herself could chair a high level committee which would periodically review the progress of work and evaluate and assess the results achieved through Bangladesh's economic diplomacy. This high level committee would ensure that prompt action is taken by the concerned ministries and departments of the government, that the grievances and complaints of the foreign investors are dealt with promptly. These unresolved problems can have a multiplier effect and will discourage future investment.

Our missions abroad must be kept fully briefed and the Foreign Ministry must respond promptly to initiatives taken by our Ambassadors and our missions abroad. Our Ambassadors must be performance oriented. Their performance must be closely scrutinized.

We must ensure that the right man is chosen for each post. Bangladesh simply cannot afford the luxury of non-performing Ambassadors. Economic diplomacy is vital to our survival and must be one of the key facets of government policy today.

Fortunately Mr. Morshed Khan is no stranger to economic diplomacy. In fact as the Special Envoy of the Prime Minister, in Begum Zia's first government, he was the point man on economic diplomacy. As Chairman of the Special Committee on Foreign Affairs, popularly known as the Morshed Khan Committee, he produced an excellent report. Indeed many of points mentioned in this article were dealt with in great detail in the report. This report highlighted the importance of economic diplomacy and put forward a set of recommendations which would enable the Foreign Ministry to carry out its responsibilities in this area more effectively.

Farooq Sobhan, former Foreign Secretary, is President, Bangladesh Enterprise Institute.

Source: The Daily Star, Dhaka, November 27, 2001