study

1. Economic Diplomacy and
National Interest

2. • National Interest is a vague and ambiguous
term that carries a meaning according to the
context in which it is used.
• Statesmen and policy-makers have always
used it in ways suitable to them and to their
objective of justifying the actions of their
states. Hitler justified expansionist policies in
the name of “German national interests.”

3. • The US presidents have always justified their
decisions to go in for the development of more
and more destructive weapons in the interest of
“US national interest.” To build up a strong
nuclear base at Diego Garcia was justified by the
USA in the name of meeting the challenge posed
by erstwhile USSR as well as for protecting the US
interests in the Indian Ocean. During 1979-89,
(erstwhile) USSR justified its intervention in
Afghanistan in the name of “Soviet national
interests”.

4. • National Interest is: “What a nation feels to be
necessary to its security and well being … It
reflects the general and continuing ends for
which a nation acts.” Brookings Institution

5. • “National Interest is what states seek to
protect or achieve in relation to each other. It
means desires on the part of sovereign
states.” Vernon Von Dyke

6. • National Interest means: “The values, desires
and interests which states seek to protect or
achieve in relation to each other” “desires on
the part of sovereign states”. V.V. Dyke

7. • National Interests can also be defined as the
claims, objectives, goals, demands and
interests which a nation always tries to
preserve, protect, defend and secure in
relations with other nations.
• Charles Beard was of the opinion that
territory and commerce are fundamental
aspects of national interest.

8. • National interest may generally be defined as
principles, goals or objectives stipulated in a
country’s foreign policy.
• Through foreign policy a state seeks to achieve
a variety of objectives.. …..

9. • objectives sought to be attained by a state are
of various categories according to country
needs, yet there are certain objectives which
are uniformly pursued by all states i.e. Political
Independence and territorial integrity,
economic wellbeing and prestige of a nation

10. FP formulation
• Foreign policies are generally formulated to
protect a country’s core values and interest,
national security, ideological goals, as well as
economic prosperity.
• It is defined as a combination of ends and
means. The end is the national interest of a
state and the means are the power and
capabilities of nation state

11. FP
• For example some of the principles of the New
Foreign Policy of the United Republic of
Tanzania state as follows:
1) Promotion of deeper economic cooperation
with our development partners;
2) Support for the United Nations in its search
for international economic development,
peace and security.

12. • Objectives of Tanzania’s Foreign Policy are:
1) To project, promote and protect URT’s
political, economic, social and cultural
interests through active and sustainable
economic diplomacy;
2) To ensure that the United Republic of
Tanzania’s relations with other nations and
international entities are also driven inline
with economic interests;

13. • To build a self-sustaining economy, preservation
of national peace and security as well as
supporting regional and international endeavour
for the creation of a better and peaceful World;
• To accelerate the political and social economic
integration for the region;
• To create the necessary conditions which shall
enable the United Republic of Tanzania to
participate effectively in the regional and global
economies and international negotiations.

14. • National interests commonly include:
1. Self preservation (primary duty of any
government)
2. Independence (Sovereignty)
3. Economic well-being
4. Military security

15. National interest and economic
policies
• Economic interest (Economic well being of a
country and its citizens) are considered to be
important interests of any country in the
world.
• Economic interests can be divided into the
export/import trade, the attraction of
international financing, overseas investment,
import/export of technology, etc

16. NI and Econ policy….
• Economic interests are the most secure
national interests.
• When a country’s survival is reasonably
secured, its foreign policy pursues economic
interest as the most important interest.
• Therefore, economic interests may also be
called a fundamental interest or ultimate
interest.

17. NI and Econ policy….
• Economic interests of a country are fostered
through economic diplomacy.
• Economic diplomacy not only promotes the
state’s prosperity but also, as occasion
demands and opportunity permits,
manipulates its foreign commercial and
financial relations in support of its foreign
policy – as in the case of US sanctions against
Iran.

18. NI and Econ policy….
• At home, economic ministries, trade and
investment promotion bodies, chambers of
commerce, and of course foreign ministries, are
all participants in economic work.
• Current trends include increasing collaboration
between state and non-official agencies, and
increased importance given to WTO issues, the
negotiation of free trade and preferential trade
agreements, and accords covering investments

19. NI and Econ policy….
• Note:
The main focus is on promotion, to attract
foreign business, investments, technology
and tourists. Economic diplomacy connects
closely with political, public and other
segments of diplomatic work.

20. NI and Econ policy….
• Foreign policy of a country is formulated to
safeguard and promote its national interests
in the conduct of relations with other
countries, bilaterally and multilaterally.
• It is a direct reflection of a country’s
traditional values and overall national policies,
her aspirations and self-perception.

21. NI and Econ policy….
• Thus, Foreign Policies are the strategies,
methods, guidelines, agreements that usually
national governments use to perform their
actions in the international arena.
• In contemporary times, every state establishes
diplomatic, economic, trade, educational, cultural
and political relations with other nations and that
compels to maintain its relation with each other
as well as with international organizations and
non-governmental actors in the international
relations.

22. NI and Econ policy….
• The sovereign states conduct their foreign
relations and interact with each other through
their foreign policies and thus, foreign policies
in international politics are like a charter
containing national interests showing the
areas of agreement and disagreement.

23. NI and Econ policy….
• , Foreign policy involves both decisions and
actions i.e., policies.
• This decisions and actions comprise to some
considerable level relations between one state
and others.
• Foreign policy is basically a matter of saying what
a state is going to do. Through it, every state
decides what course it will pursue in world affairs
within the limits of its strength and the realities
of the external environment.

24. NI and Econ policy….
• Normal Hill viewed that “Foreign Policy is the
substance of nation’s efforts to promote its
interest’s vis-à-vis other nations”. The main
objective of foreign policy is achieving own
interest and upholding national ideology.

25. NI and Econ policy….
• “Foreign Policy is the key element in the
process by which a state translates its broadly
conceived goals and interest into concrete
course of action to attain these objectives and
preserve interests”. In this sense, Foreign
Policy defines the goals of national interest
and seeks to achieve these through various
means.
• What means???

26. Economic policies and Reforms
• The need to formulate a new economic and social
development vision for Tanzania came from the
outcomes of economic reforms - especially those
which were pursued since 1986.
• These social and economic reform measures
were taken in response to the economic crisis
that had persisted in the country and the world
as a whole since the early years of 1980s.

27. Reforms
• Secondly, the government had realized that
those earlier development policies and
strategies were not in
consonance/compactable with the principles
of a market led economy and technological
development occurring in the world.

28. Reforms……
• The government therefore started preparing
reform programmes with strategies, generally,
focusing on only a few economic and social
areas, and the areas of focus changing
frequently
• These structural adjustment programmes,

29. Reforms cont…..
Achievements
• macroeconomic policy during the first half of
the 1990s, the government achieved
macroeconomic stability in the late 1990s.
Inflation was reduced from about 30 percent
in the 1980s and early 1990s to single digits in
late1990s

30. Reforms cont…..achievements
• That is fiscal imbalances were brought under
control through prudent fiscal management;
inflation in 2002 was 4.6 percent.
• Acceleration of structural and institutional
reforms, SAPs
as well as creation of new institutions, led to
improvement in the investment climate,
increased foreign direct investment (FDI)
flows, and job creation.

31. Reforms…Achievements
• The balance of payments improved
significantly, reflecting large donor inflows and
increased export earnings, mainly from
nontraditional exports.

32. Reforms cont…..Achievements
Also:Tanzania’s sustained commitment to
economic reforms triggered its eligibility for
debt relief under the enhanced Heavily
Indebted Poor Countries (HIPC) Initiative in
April 2000, making it one of the first countries
to reach the completion point and to benefit
from irreversible and substantial debt
reduction.

33. Reforms…. achievements
• Need for long term development
• Vision 2025 fill the vaccum

34. Reforms
• The Government started the formulation
exercise of this development Vision in 1995. A
Team of Experts, appointed from various
sectors in the society, was the focal point of
this exercise under the Planning Commission.
Observing the need to build a national
consensus over the Vision's objectives,

35. • One of the three principal objectives of
Vision 2025 is building a strong and flexible
economy that can effectively withstand global
competition which means a competitive
economy capable of producing sustainable
growth and shared benefits.

36. Reforms cont….
• Debt reduction in turn paved the way for
additional donor inflows. The additional
resources, including from the HIPC debt
reduction, allowed the government to
increase budgetary expenditure allocations to
social sectors and other priority sectors, such
as rural roads, the judiciary, and HIV/AIDS-
related activities. This has led to visible
improvements in public service delivery, in
particular education and health.

37. Reforms cont…..
• Development partners have been an
important and integral part of the process of
economic reforms.

38. Reforms Cont….
• Financial support from development partners,
both bilateral donors and multilateral institutions
enabled the government to aggressively reverse
the socialist policies after the 1986 reforms and
helped to bring economic recovery and
improvement in public service delivery. Technical
assistance contributed to capacity building,
strengthened institutional framework and helped
to create a conducive environment for a market
driven economy.

39. • Meaning that, Tanzania should have created a
strong, diversified, flexible and competitive
economy which can effectively cope with the
challenges of development and which can also
easily and confidently adapt to the changing
market and technological conditions in the
regional and global economy.

40. • Tanzania therefore went through various
Stages of Foreign Policy Decision Making
which are
• ➢ In order to determine the best policy
options, every state needs to understand the
international and domestic political
environment within which foreign policy is
made and implemented.

41. • ➢Another stage in the making of foreign policy
involves goal setting. As a state has variety of
goals it must be determine which goal is affected
by the international and domestic political
environment.
• ➢ Determination of policy options is another
stage of foreign policy decision making. A state
must determine what policy options are available
to meet the goal or goals in the political
environment.

42. • ➢ Another stage is formal decision making
option. Foreign policy decisions are usually made
by the executive branch of government such as
head of the state, head of the government,
cabinet or minister.
• ➢ After determination of best policy option a
formal decision has been made and then the
policy must be implemented .Generally, foreign
policy is implemented by the Ministry of Foreign
Affairs or State department, departments of
trade, defense and aid.

43. Major economic trends
• The phenomenon of economic diplomacy is not
new.
• It can be traced back to the commercial
diplomacy of the European states in the 19th
century. However, the increasing of the role of
economic diplomacy in the international
economical attitudes is promoted by quite a
number of factors. Some of these factors include
Internationalization processes and reinforcement
of interdependence of the world economic
system (i.e. global and regional integration).

44. Major trends cont….
• The other factor includes the
 Expansion of market economy area
Economic Interdependence
Liberalization of national economies and their
interaction via trade and international
investments.
Increasing number of global economy entities,
i.e. transnational corporations, banks, investment
groups, which have a serious influence on world
politics,

45. Major trends cont….
Globalization on Transport and tech
International relations, and existence of
large‐scale and expanding dependence of
economies of new independent countries on
world markets, investments, technologies
forces them to correct its positions on political
and military problems of international life.

46. Attraction of foreign investments is an
essential issue of economic diplomacy.
Facilitated by favorable environment

47. Expanding, the quality of work is improving
and the number is increasing of the trade and
economic missions of the country in the field
of support of overseas trade activities,
lobbying of interests of domestic companies
abroad, trade and political assistance,
mobilization of effective external resources on
development purpose.

48. Note; Because of economic interdependence
every state establishes diplomatic, economic,
trade, educational, cultural and political
relations with other nations and that compels
to maintain its relation with each other as well
as with international organizations and non-
governmental actors in the international
relations.”

49. • Therefore given the economic and socio-
political shift that has occurred in the
domestic and international scene, Tanzania’s
foreign policy had to suit new global changes
and situations placing priority on the securing
the core national interests as a sovereign
state.
•

50. • Tanzania’s new Foreign Policy manifests itself
in active international engagement, which is
basically leveraged upon the pursuit of
economic objectives, while at the same time
preserving the gains of the past and
consolidating the fundamental principles of
Tanzania’s traditional foreign policy interests.

51. • There have been equally significant changes in
the international system.
1) The end of the cold war and the emergence of
a single super-power,
2) The global shift towards market-led economies
and the
3) Processes of regionalisation
4) Globalisation and liberalisation
5) Embrace of democracy,

52. 1) Human rights and good governance,
2) The emergence of new shared challenges
such as international terrorism,
3) Illegal migration,
4) Drug trafficking,
5) The preservation of the environment,
6) The phenomenal advances in science and
technology

53. • In the economic sphere economic policies aims at
pursuing
1) Trade and investment promotion,
2) Securing better terms of international trade
bilaterally, Regional and Multilateral level and within
framework of the World Trade Organization (WTO),
3) Accessing development financing on affordable terms
4) Obtaining sustainable terms of debt management,
promoting industry, harnessing modern science and
technology, protecting the environment and fostering
sustainable people-centred development

54. “Tanzania facing the global economic
trends/possible”?Ways to address them
using economic diplomacy objectives
Discussion theme