Both instances are a commentary on the sorry state of the country’s economic diplomacy. In fact, in the last two decades, Nepal’s foreign policy and diplomacy have in general been rendered dysfunctional by rampant politicization of ambassadorial nomination where meritocracy is thrown to the winds and sycophancy and proximity and affiliation to political parties and power centres are taken as a yardstick for the awarding of the well-paying postings. Making matters worse on the economic diplomacy front is the lack of effective integration of economic affairs into the formulation and execution of the state’s foreign policy. Not that there is any dearth of occasional outbursts of emphasis on the potent tool of economic diplomacy from ministers and policy makers. But making it part and parcel of foreign policy remains a challenge.
At a time when ‘economic revolution’ is being bandied about as a key national objective and imperative, the importance of effective economic diplomacy stands out further still. The launch of Nepal’s small economy on a high, broad-based and sustainable growth trajectory would be next to impossible without a paradigm shift in the direction, quality and composition of its foreign trade in goods and services. Yes, the key to making Nepal a Malaysia or South Korea, if not Singapore, lies in foreign trade done smartly—expanding and diversifying exports of goods and cashing in on our natural comparative advantage in tourism to the hilt. Nepal’s geographical contiguity to the booming economies of China and India only reemphasizes the potential of foreign trade to rescue one of the world’s poorest countries from economic stagnation. Remember, historically the chief source of wealth of the Nepali state was transit trade between China and present-day India before the trans-Himalayan trade route shifted elsewhere. Economic diplomacy is not alien to Nepali foreign policy, at least historically: for a transit economy, diplomacy of the economic variety must have been critical. Only that over time, it has been blunted to the point of being non-existent.
Once it is agreed that foreign trade as well as foreign direct investment and foreign aid (given the huge resource gap, and even the Maoists cannot say it is not needed) are critical components of Nepal’s attempt at rapid economic growth, it logically follows that the growth goal will remain elusive in the absence of a departure from the routine, perfunctory and ritualistic variety of diplomacy presently practiced.
PM urges honorary consul generals to pursue economic diplomacy...
Diplomacy was vital to Germany’s and Japan’s export promotion drive as they industrially rose from the ashes of World War II. Developed countries still pursue economic diplomacy, as do emerging economies. So why has Nepali diplomacy so abjectly failed to advance the country’s economic and commercial interests? An ambassadorial candidate’s political affiliation takes precedence over his/her professional expertise and experience. This is hardly surprising in a society where, with the right political connections, writing a handful of hackneyed newspaper articles on foreign policy enables one to pip more qualified candidates to ambassadorships. It is high time merit-based selection of envoys be institutionalized, as well as knowledge of and experience in trade and economics be given due weight. Unfortunately, the parliamentary hearing and vetting exercise that ambassadorial nominees are subject to under the interim constitution has failed to introduce meritocracy in the selection process, as such nominations are ultimately still decided by the exigency of division of spoils of power.
An illustration of old ways still holding sway in the New Nepal is the spectacle of envoys nominated by a previous government digging their heels deep at their posting even after being recalled by a government elected by the constituent assembly. Only if merit and, as far as possible, consensus are taken as the twin principles of selection in practice can one consider fixing ambassadorial tenure—say five years with the possibility of extension—as in the case of some other political appointments, like Nepal Rastra Bank governorship.
Confined to formalities, Nepal’s diplomatic missions have been reduced to ‘post-offices’ and venues for ritual receptions. This despite the fact that they are run at no insignificant cost to our cash-strapped exchequer. They are potentially a powerful means of advancing our national interests, including economic interests. They are supposed to gather information and intelligence on the economic trends and developments in the country concerned and various global forums, analyze the same in terms of relevance to Nepal, be ever on the lookout for opportunities and prospects for exports of Nepali goods and services as well as inward investment, facilitate business exchanges, promote Nepali goods and services, lobby for aid in tune with national interests, and relay the information collected back home for feedback and directions. As things stand now, these vital tasks are largely unattended to.
There is a need to restructure the Foreign Ministry so that national economic interests move to the forefront in the execution of foreign policy, and economic diplomacy becomes intrinsic to diplomacy from being a mere sub-component of it. As recommended by a study commissioned several years ago, economic sections must be set up under each territorial/regional division of the ministry and all of them linked to the current multilateral economic affairs division. This will prevent compartmentalization of ‘economic’ and ‘non-economic’ issues, ensure that economic matters get due priority in all the divisions, and help in the integration of economic diplomacy into foreign policy. Likewise, a body headquartered in the Foreign Ministry to coordinate with other relevant ministries—finance, industry, commerce and supplies, tourism, and labor—is a must for conducting effective economic diplomacy. Such an overhaul in the Foreign Ministry calls for a change in its recruitment policy so that it has a strong pool of human resources equipped with good knowledge of domestic and foreign economic issues. A complementary policy would be to encourage deserving employees to specialize in economic and trade issues through training and higher education opportunities.
Effective economic diplomacy may not be a magic wand for Nepal’s economic prosperity. But it is clear that without it our growth dream will remain just that, a dream.
