“Economic Diplomacy”

sarath wijesingheBy Sarath Wijesinghe

The term diplomacy refers to dealings with other states on Trade, War, Economy, Culture, Environment, Human Rights, Strategic advantages and many other areas.

This is generally led by the leader of the State with the Foreign Minister and the Embassies around the world. In some countries the Foreign Minister is entrusted with the work personally handled by the head of the state. Some countries the head handles it in person.

States deal with the rest of the world via the Foreign Ministries, the Ambassadors and Embassies. Ambassadors have adopted a similar method in running the Embassies and performing duties with other Embassies and host countries including the business communities Chambers of Commerce and Trade Organisations.

Today the Foreign Ministry of a country performs a pivotal role on economic development and therefore will go beyond traditional diplomacy in dealing with the member states. Countries have given highest priority to Economic Trade investment and business resulting in an amalgamation of economic and traditional diplomacy in the interaction between states.

With the advent of modern developments in technology and communication, states have been brought closer than ever where news and information is imparted in seconds breaking all traditional barriers. Trade war has replaced traditional wars as the priority of any modern nation is promotion of trade, commerce and other sectors such as agriculture and hi-tech innovations.

Economic Diplomacy

Economic Diplomacy is a form of diplomacy to utilise the full spectrum of economic facts and realities in a State to achieve success in international goals in foreign policy which is an extension of national policy and interest. This includes all policy issues and economic activities in the private and public sector which in turn concerns economic policy issues. In UAE the heads of business Chambers have been elevated to the positions of Ambassadors and the State is patronising the business community.

Her Highness Sheikha Lubna (Minister of Foreign Trade) personally led the powerful forty member trade delegation to Sri Lanka. The Israeli Chambers made a number of trade missions and a rousing welcome was given to the Sri Lankan Head of State concentrating on trade and commerce in addition to traditional diplomacy. Ambassadors in EU are actively canvassing Sri Lankan Government on business facilities.

Even the Ambassadors in world powers such as USA, UK, France, China Germany and other major powers have given targets to the Ambassadors for mega projects on aviation, Infrastructure and development schemes for projects. All the states in the world family has given top priority to economic progress through economic diplomacy.

Economic policies are formulated and implemented with the guidance and direction of the Ambassadors with the Foreign Ministry/Minister for development and to obtain resources, funds and business which is a competitive factor and a science today. Economic policy is independent on the foreign policy of the country and should generally be consistent irrespective of the change of governments. In India governments will change but not the foreign and economic policy. This is the case in many parts of the world and it is time we follow suit in our own interest.

State Craft in Economic Diplomacy

Behaviour of the State and the leaders with other nations on improvements on Economic Policy and the methods adopted diplomatically and otherwise include State Craft of a Nation. Economy and trade is so interconnected that no country can live in isolation without the help of each other economically. Visits of world leaders and diplomats are increasingly connected to economy more than other political considerations.

Any world leader or an Ambassador visiting a destination will give priority to meeting the Chambers of Commerce and the business community. The state closely works with the Chambers, NGO’s, general business community and the communities in the countries and the residents living worldwide i.e. diaspora. States make use of culture, education, history, exchange and assistance to each other, interactions and exchanges of technical know how and knowledge based interactions with universities and other organizations. Maximum utilization of the Ambassadors and Embassies are maximum priorities in the modern economic diplomacy concepts adopted by the modern world of diplomacy. Visits of all world leaders to any member Nation or an international organisation is connected to economic diplomacy.

World Trade Organization International Monetary Fund World Bank and similar organizations and economic diplomacy

WTO amongst other organisations encourages good governance, helps countries to develop, settle disputes, intervene and encourages peace and stability of state parties as a major contributor and a negotiator assisting all the nations – more specifically developing countries.  In the Sri Lankan situation the Embassies and the Trade Ministry work together utilizing the experienced trade personal on diplomatic appointments. World Bank is a vital source of financial and technical assistance to developing countries by giving low income loans, through trust funds and developments on economy and infrastructure. Foreign Ministry and the ambassadors play a pivotal role in the dealings among states and the non-governmental organizations.

Economic Diplomacy Non-Governmental organizations and the Private sector including Chambers of Commerce

Commercial Diplomacy is a method of diplomacy which concerns and activity conducted by public and private actors with the diplomatic states to supply business promotion between home and host country with the goal of gaining economic stability. It is a governmental service to the business community which aims at the development of society beneficial to business ventures. Chambers of Commerce and Trade Organizations are performing a pivotal role in this area which merits government patronage and assistance.

Economic – Diplomacy Sri Lankan Way

Until recently no specific attention was given to this innovative concept which will enhance and catalyse the business and trade for the development of the Nation. It is time for the Minister and the Ministry to come out with a forceful and innovative programme with targets and training to give focussed attention and priority to Economic Diplomacy. Embassies are to be armed with able staff with different languages and commercial awareness. Closer links should be established with Chambers of Commerce, Universities and trade organizations on this area. The new Deputy Foreign Minister Dr  Harsha de Silva has given a valuable comment on this area promoting economic diplomacy in addition to traditional diplomatic process. This presents an encouraging indication of an opportunity for the Sri Lankan Foreign Ministry and Service to adopt innovative approaches to diplomacy that will greatly assist the country’s economic development and international relations.

(Sarath Wijesinghe is a former Ambassador to the United Arab Emirates and the State of Israel)


  1. you have articulated the write up in a professional manner but being witnessed your tenure in UAE as the Ambassador,i haven’t seen any tangible progress and dividends shared to the Sri Lankan Economy by leading those examples .

  2. I congratulate you for writing an article full of facts.
    Unfortunately the previous govt of mahinda did not run the foreign ministry with intelligent staff .they robbed the country to have tamashas in Newyork.(Sunday times)

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