Economic strategy in foreign policies

9 November, 2013
As appeared in TheStar.com.my

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Wisma Putra should not only be adept at protecting national interest but also be good in projecting it.

How does Malaysia fare?

THE Harold Nicolson school of diplomacy which informed almost all foreign ministries emphasised style and perceptive political narrative rather more than hard graft and economic intelligence.

All this has changed, of course, in a more demanding world of performance and accountability. A world in which the premium is on the economy, globally and in the national interest.

Political reporting of course remains eminent. But not exclusively so. Missing the economic dimension, and the geoeconomic implication, would make diplomacy less than optimal.

The traditionalist British today have department of trade representation in their embassies abroad. The Australians combined foreign and trade affairs in one ministry as long ago as 1987. Even the purist Americans now see the need for state and private interests to work together for effective outcome. And indeed are more obvious in the economic underlay of their diplomatic initiatives.

But China is perhaps the most pre-eminent in founding foreign policy and diplomatic outcomes on economic determinism. While this may seem to have a Marxist tinge to it, it is rather more the consequence of China’s growing economic weight.

How does Malaysian foreign policy and diplomacy measure up against all this?

From travelling around and meeting senior Malaysian diplomats, there is no doubt there is consciousness among them to serve the economic function. However, there does appear to be a misunderstanding, emanating from the centre, that that function is synonymous with promoting business alone.

Thus, you see ambassadors bending over backwards to make sure Malaysian business masters of the universe are assisted as far as possible when they seek it in various capitals around the world. There will be hell to pay if they didn’t, especially during the Mahathir years.

With their political masters, who now perform also an economic function by seeking to meet the movers-and-shakers of the business world, an ability to arrange a meeting or to effect an introduction would be a feather in the cap.

But all this, important as it is, does not constitute a contribution to the economic strategy of the nation. Indeed the question is whether there is a clear statement and understanding of national economic strategy.

This must come from the centre. It is not clear the diplomats in the outfield are properly guided and informed to further and to defend national economic interests.

Before a strategy can be conceived, the objectives must be defined. After that there must be coordination in government. Then a role and capability in the foreign ministry to play its effective part.

The best way to see how we are doing is to look at a few examples. Take the Trans-Pacific Partnership (TPP). It is not clear there was an appreciation of national economic interests and objectives at stake before the officers were sent out to the field, in this case those from the International and Trade Industry Ministry (Miti). Certainly Wisma Putra appears to have been completely out of the picture.

It was only after the fundamental issues implicit in the TPP got highlighted that there was an attempt to define the guiding parameters of what was within and without the national interest. It was rather like putting the cart before the horse. The poor officers, meanwhile, got mud on their face.

While the point about definition and coordination is evident, it still is not clear who is to take the lead, or even to orchestrate. There are some core national interests involved. Is it not the function of Wisma Putra, one so often hears, to protect and project the national interest? Was it involved?

Would it have been capable, had it been, to dissect strategically the issues and to present the various distances Malaysia should keep in relation to the main proposals of the TPP?

Of course matters of turf will arise. However, even if Miti is the central agency responsible, there is a clear igniting role for Wisma Putra to play because the country may be making international commitments which it may not be able to fulfill against domestic policies unless those were changed.

The capability of Wisma Putra to perform this function must be closely examined. Then, assuming there is that capability at the centre, diplomatic officers in the outfield could be given guidance on how they might want to influence governments involved in the TPP negotiations to come along with various Malaysian positions. This is a matter which should not have been left, at the last call, to actual multilateral TPP negotiation alone.

The need for Wisma Putra to have this capability is becoming more and more urgent as, increasingly, strategic economic issues are hitting the national buffers. The economic relationship with China is one. While it will deepen, it cannot be exclusive or overwhelming. How do we achieve this without some guiding principles? Where and who from?

In the rush for short-term benefits, we must not abandon long-term national interests. This is always an issue in every field. In the particular field of foreign associations and commitments, the country cannot afford to have a Wisma Putra that is caught short.

It is, of course, not just definition and protection of the national interest that Wisma Putra should be adept at. It is also its projection. In so many multilateral meetings these days, of which there are really many (Asean alone has in excess of 1000 a year!), there are issues of strategic import that arise which may not be realised by officials possessed by the minutiae.

For instance, in an Asean meeting with China discussing the code of conduct in the South China Sea, China may, as it has done, separately propose financial cooperation which might not ring a bell with those focused on political matters alone and at hand.

Thus we may miss a potential significant development in financing arrangements that augment insufficient and volatile traditional sources. Officers may come home, therefore, without bringing to the national table the first-mover advantages of following up on something that can drive infrastructural development or finance small and medium enterprises which have difficulty issuing bonds in conventional markets.

Thus again, without the nose to sense strategic economic impact, the country may miss out. The notes brought back must be full, analysed and coordinated at the centre to be washed out again in diplomatic activity in the national interest.

We must get our act together. Wisma Putra needs to put economic strategy in foreign policy and diplomacy at the centre of its capability. It needs to be sufficiently resourced and organised to do so.