Lok Bahadur Thapa Director General Passport Department

Lok Bahadur Thapa Director General Passport Department

Presentation s Framework What is diplomacy? What is economic diplomacy? Contributing factors Dimensions of economic diplomacy History and development Economic Diplomacy in Nepal Evolution Objectives Policy Reforms Key Sectors Institutions and mechanisms How we have been conducting economic diplomacy? Achievements Opportunities Gaps Lesson learnt and way forward

Setting the context Let s think about some recent diplomatic events: Barack Obama s visit to India Indo-US nuclear logjam broken Cooperating in the Fight Against Climate Change Incentivizing Trade and Investment: $4 billion in trade and investment with India while supporting thousands of jobs in both countries Narendra Modi s visit to Nepal Highways, Information ways and Transmission Economic cooperation on energy, infrastructures and transportation SAARC s Kathmandu summit Connectivity and deeper integration Tony Abbot s China visit Australian PM Tony Abbott led the largest ever Australian delegation to visit China. China hosting a lunch for 1800 people signalled it could be ready to sign an FTA with Australia before the end of the year (April 2014) David Cameroon s visit to China- British Prime Minister David Cameron arrived in China at the head of a 100-strong trade delegation- (2013 December )

What is diplomacy? Management of relations between states and between states and nonstate actors Peaceful means of maintaining state s sovereignty One of basic and important tasks for a state. It is a major instrument of statecraft. Major tool of foreign policy and international relations Diplomacy plays its role even in war situation It is the first line of defense. More so for a weak power like Nepal Changes occurred in contexts, contents, styles, actors, issues of diplomacy Modern diplomacy= Political diplomacy + Economic diplomacy + Cultural diplomacy Multi-actors, multi-dimensional, multi-layered, multiple issues, complex settings One of the major changes- focus and priority given on economic diplomacy

What is economic diplomacy?

Contributing factors

Dimensions of economic diplomacy Regional Multilateral Bilateral

Economic diplomacy: History and development Under old diplomacy Greek States to Roman Empire Commercial interest was a prime motivating factor in inter state relations Under new diplomacy Focus was on aid, trade in 1950s and 1960s Emphasis on investment in the 1980s and 1990s Under contemporary diplomacy Integrated approach Focus is on aid, trade, investment, technology, tourism, people movement, employment, green economy etc

Economic diplomacy in Nepal Trade relations with Tibet and the British in the 18 th and 19 th century Mobilization of foreign aid became a priority in the aftermath of political changes in 1950. In the post-1990, several taskforces and working groups to make diplomacy more effective. The High Level Task Force Report in 1996 gave emphasis on reviewing diplomacy to focus on economic interests Consequent reforms and structural changes made and foreign policy was reoriented to focus on economic interests

Contd In 2006, another High Level Foreign Policy Task Force which stressed on economic relations as one of the major pillars of foreign policy Thus, diplomacy for development as a new dimension of FP after the restoration of democratic dispensation in 1990 Both national, regional and international factors contributed Of late, economic diplomacy has gradually been developing as an integral part of overall foreign policy Mainstreaming and institutionalization of economic diplomacy for socio-economic development of the country is emphasized upon from different sectors

Contd Periodic plans also emphasized upon the importance of economic diplomacy for the overall development endeavours of the country. Government s due priority to economic diplomacy Role of private sector is duly recognized Three Year Interim Plan 2010/2011-2012/2013 for the first time had the provision of economic diplomacy Current Three Year Plan made a number of provisions for the successful implementation of economic diplomacy In recent years, the Government has been earmarking budgets for economic diplomacy since 2009. MOFA allocates to Embassies based on their proposed programs and actual performances

Objectives of Economic Diplomacy Enhancing economic and overall national security Mobilizing resources for development Promoting trade, exploring markets for national products and supporting businesses overseas Promoting culture and tourism Attracting Foreign Direct Investment in priority sectors Promoting foreign employment Increasing volume of aid and its effectiveness Mobilizing Diaspora resources

Economic Diplomacy of Nepal: Policy Reforms Liberalization of economy. New Policies (Foreign Investment and Technology Transfer Act, Industrial Enterprises Act, Investment Policy, Trade Policy, Tourism Policy, Civil Aviation Policy, Privatization Policy) Interests rates deregulated. Open General Licence system

Economic Diplomacy of Nepal: Key Sectors International Trade Tourism Development Assistance Foreign Direct Investment Hydro-power Development Foreign Employment

Economic Diplomacy of Nepal: Institutions /Mechanisms Institutions: MOFA and Diplomatic Missions National Planning Commission Sectoral Ministries and Departments Boards (Tourism, Foreign Employment, Trade Promotion, Investment) Private Sector and their Apex Bodies Think Tank Bodies

Contd Mechanisms: High Level Committee on Economic Diplomacy under the Foreign Minister comprising sectoral ministries/departments as well as the private sector. This Committee is entrusted with the tasks of formulating policies, implement strategies, monitoring and evaluation of activities and giving overall guidance Economic Diplomacy and NRN Division in MOFA to guide and monitor the activities on economic diplomacy Different Mechanisms between MOFA and Sectoral Ministries Different Ministries have their own international cooperation division/section

How we conduct economic diplomacy? Bilateral Diplomacy Persuade the host Government about the need for promoting cooperation in the field of socio-economic development Facilitate interactions, meetings and conclusion of bilateral treaties and agreements Involving private sector in high level meetings and visits Building partnership with host govt and its private sectors Encourage and facilitate the exchange of business delegation Regional Diplomacy Giving much importance to regional connectivity and integration SAFTA and BIMSTEC-FTA Multilateral and Conference Diplomacy Playing its important roles in different multilateral fora Champion the cause of LDC and LLDCs

Contd Public Diplomacy Promotional functions, information sharing and interactions/discussions, taking part in different festivals, celebrating some important events, familiarization tours, press meet, etc. Diaspora Diplomacy Mobilize the huge social networks of the Diaspora Involve them in dissemination of information about culture, tourism, trade, investment, etc. Promote Diaspora s investment

Economic Diplomacy of Nepal: Achievements Nepal increasingly recognized as tourist destination Arrival of tourists is increasing from different countries Number of industries with JV investment increasing Foreign employment is increasing and so is remittance flow NRN s investment growing Nepal s role in international forums is visible

Economic Diplomacy of Nepal: Opportunities Geographical dividend Peace dividend Democratic dividend Demographic dividend Diplomatic dividend Resource dividend Diasporic dividend

Gaps in economic diplomacy Low diplomatic presence and low profile diplomacy Lack of training and orientation Diplomatic skills and knowledge lacking Organizational Lack of inter-agency cooperation Clear goals & Budgetary constraints long term objectives Communica tion and information People and Knowledge Structural Lack of and failed to use international support measures Political instability and lack of consensus Traditional diplomacy

Lesson learnt and way forward Policy coherence and consensus Whole of government approach Strong partnership Proactive economic diplomacy Enterprising private sector Vigorous and consistent promotion National brand Financial and budgetary support Skill manpower Use of regional and international forums Constructive use of Diaspora resources Take advantage of strategic geography

Take away Modern diplomacy is guided by economic interest as much as political and security interests. Economic diplomacy has become a defining feature of international relations in recent years. Today s diplomat should be like an economist, business person, investor, tour and travel operator etc. He/she is a protector and promoter of country s economic interests at all time. Proactive, pragmatic and constructive economic diplomacy both at bilateral, regional and multilateral levels is essential to scale up national development