Promote commercial diplomacy to spur investments in the COVID-19 era

OPINION|DIPLOMACY|INVESTMENT 

The COVID-19 pandemic and its supply and demand side shocks to the global economy, has underscored the need for agility and responsiveness in meeting the evolving needs of investors. 

The World Economic Forum estimates that Foreign Direct Investments globally could shrink by approximately 40%, hitting developing countries like Uganda, the hardest.  

In the face of this unprecedented challenge, as a Least Developing Country, Uganda needs to find ways of keeping inward investments flowing; the severe disruptions to global production and supply networks, notwithstanding. 

I am convinced that we need to promote commercial diplomacy, in a way that positively influences the policy and regulatory decisions of our trading partners and leads to more investments into Uganda. 

Since the creation of the WTO in 1995, the room for sovereign economic policymaking has become severely constrained. 

Countries that belong to the WTO are subject to all manner of rules and regulations concerning international trade, that make it difficult for them to engage in economic nationalism. 

Instead, they have to effectively use commercial diplomacy to secure new inward investments and export markets. 

This concept of commercial diplomacy is now central to the foreign relations strategies of many countries. 

For example, the United States of America has decided to focus on six elements, of commercial diplomacy, when interacting with other nations. 

These are: prioritizing international trade, leadership from the top, forging a strategic partnership between the trade & diplomatic functions, making it a coordinated government effort, engaging states and cities and involving businesses. 

The US Government has mastered the art of commercial diplomacy to the extent that its envoys are required to use any diplomatic channels, at their disposal, to help resolve any hurdles their businesses may encounter, in foreign markets. Similarly, Australia has chosen to focus on: promoting investments, addressing Non-Tariff Barriers, facilitating business, advocating for a global rules based system and promoting science, technology and innovation.

I am glad that our own Ministry of Foreign Affairs has recognized the potential of commercial diplomacy and pivoted towards supporting trade negotiations, external resource mobilization, as well as, tourism and investment promotion. 

That said, there is a lot that we can learn from the Americans and Australians, in this regard. First, commercial diplomacy should not only seek to attract investors to Uganda. 

It should extend to facilitating their activities, through the One Stop Shop and other mechanisms. Secondly, the idea of promoting commerce and trade is vital. 

Our embassies and foreign missions need to perceive themselves, as the primary representative of not just the country, but our products and services. 

Thirdly, the commercial diplomacy strategy cannot work, without establishing very close collaboration between the Ministries of Trade, Finance and Foreign Affairs. 

This tripartite arrangement is key to the success of any commercial diplomacy strategy.  

It is also important to engage sub-national governments. In our context, these could be cities, municipalities or districts. 

Our diplomats can promote the twinning of our cities or municipalities with others, as a starting point in improving trade and investment exchanges. 

Finally, commercial diplomacy cannot succeed without engaging businesses. At the end of the day, it is these businesses that make the products and services that benefit from the markets created through commercial diplomacy. 

How differently should commercial diplomacy be pursued in the COVID-19 era? Commercial diplomacy in the post COVID-19 era will be tougher in the face of strains to global cooperation in the course of managing the pandemic and discovering a vaccine.  

Countries have to work hard to reclaim their space in global trading systems and supply chains. Finally, for commercial diplomacy to spur investments in the COVID-19 era, it needs to go digital. 

Robert Mukiza

The writer is an international finance and investment expert