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Putting Cambodia’s economic diplomacy in context

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Foreign minister Prak Sokhonn has embarked on his reform mission in five major aspects, with economic diplomacy being a part of it. AFP

Putting Cambodia’s economic diplomacy in context

It was a historical moment for Cambodia’s diplomacy when the Ministry of Foreign Affairs and International Cooperation launched the nascent “Economic Diplomacy Strategy (2021-2023)” on January 18, 2021.

In the wider definition of economic diplomacy, such strategy is not new. For instance, Cambodia’s efforts to integrate its economy with the region and the world through its accession in ASEAN and the World Trade Organisation in 1999 and 2004 respectively can be considered as the early phase of economic diplomacy.

Economic diplomacy has also been conducted all along by technical ministries and institutions, such as the Ministry of Commerce, the Council for the Development of Cambodia and the Ministry of Economy and Finance.

What is new is rather the narrow and literal definition of economic diplomacy in the sense that the foreign ministry is trying to embed economic and trade mission within the diplomatic corps.

The endeavour has various distinctive characteristics.

Firstly, the modernisation of diplomacy. The strategy is one of the major institutional reforms initiated by foreign minister Prak Sokhonn with full blessing from Prime Minister Hun Sen in 2018. The minister has embarked on his reform mission in five major aspects, with economic diplomacy being a part of it. The intention is to put priorities on modern diplomacy focusing on promotion of trade, economy, culture and tourism, on top of the traditional diplomacy.

Secondly, the institutionalisation of human resource development. The early phase of economic diplomacy strategy focuses on capacity building and setting up of information-sharing platform. The strategy provides clear action plan with concrete Key Performance Index (KPI), timeline, Monitoring and Evaluation (M&E), budgeting and provision of supporting means and resources, and training programmes to consolidate the long-term institutionalisation.

The strategy also provides for the establishment of a dedicated economic diplomacy department within the ministry to assist overseas missions and diplomats on information collection. Therefore, diplomats don’t need to gather information randomly or inquire domestic line agencies for piecemeal data when they need it. They can focus more on “promotion” works rather than “preparation”.

In the future, Cambodian diplomats are expected to be able to proactively provide analysis on tailored-made strategy to meet specifications of individual host country in the efforts to diversify Cambodia’s trade and inbound investment.

Thirdly, the launching of economic diplomacy strategy demonstrates the gradual shifting from over-reliance on development assistance. Modernisation of diplomacy is one key aspect but the country’s political economic development also helps push the concretisation of this strategy.

With constant economic growth, Cambodia’s economic status has been elevated and Cambodia is seen as preparing for and adapting to the gradual withdrawal of economic assistance, notably grant aid. With higher status, trade preferential treatment that is normally reserved for the Least Developed Countries (LDCs) will also inevitably become target for review in the near future. Therefore, it is becoming a matter of urgency for Cambodia to strengthen its self-reliance, and promote further the discourse of “trade-not-aid” with foreign partners.

It is also important to underline that such effort by the foreign ministry is not a replacement or integration of trade and investment functions into the ministry. It is rather a complimentary action to maximise the utilisation of the existing Cambodia’s overseas missions, which are undoubtedly the first accessible windows of Cambodia for foreign nations. The ministry is not trying to gain extra portfolio but rather it is playing a coordinating role in terms of basic information provision and early bridge-making with foreign investors, traders and tourists.

Technical aspects such as trade negotiation, investment approval and detailed technical conditions, legal frameworks, etc, remain the core works of technical ministries and institutions.

Comparing to the region, Cambodia is lagging behind in terms of integrating economic and trade strategy within the professionalisation of diplomats. Nevertheless, the ministry is seen as taking the first step towards concrete actions on the long path of institutional reform endeavours.

Sim Vireak is strategic adviser of the Asian Vision Institute (AVI).

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