1.0 What is Economic Diplomacy? It is not easy to define economic diplomacy. The subject of economic diplomacy is wide and cannot be adequately defined. However, for the purpose of this paper, it can be stated that: “Economic Diplomacy is a phenomenon by which countries project themselves in advancing their economic interests for the security and betterment of the welfare of their state” Tanzania new foreign policy was inaugurated in year 2004. Before 2001 Foreign Policy was operated under Presidential Circular No 2 of 1964. This policy among others emphasizes on economic diplomacy as one of the pillars of foreign policy orientation. This presentation intends to provide an understanding of a phenomenon of economic diplomacy. To understand economic diplomacy, it is important to stage scenarios that would constitute national actions and operating environment that explain the phenomenon. It is important to gain an understanding of how Tanzania interacts with the world in economic and business frontier. It would be equally important to understand why local policies are predicated by the international environment. 1.1 Source of external finance and donor relationship: Tanzania is a least developing country that depends on other countries and international financial institutions to bridge her budget and development programmes. Surely dependency to others is a sign of economic weakness but globally countries extend financial assistance to each other in order to advance their cooperation. International monetary institutions too have been created to finance countries when they are in financial distress. Normally these are give and take situations whereby in return a country borrowing or receiving a grant would eventually pay more. It should be noted that loans are act of buying resources in return a country pay interest to the benefactor as a business transaction. The cost of loan is dependent on the capacity for negotiation on the interest and respective concessions. On the other hand grants are long term good will which will eventually culminate into requests for counter offer at a later stage. Countries providing grants are normally eying for concession on their requests in future as such, grants are a first stage for building goodwill. Looking at the phenomenon of economic diplomacy, a country should strive to reduce dependence and eventually eradicate, be cost effective in borrowing and be able to negotiate better terms for such financial and technical assistance. In implementing economic diplomacy, Tanzania should emphasize on measures that promote growth in “real economy” and exports in order to transform Tanzania into a developed country. In the same vein, Tanzania should also strengthen capacity for negotiations on financial and technical assistance both at the respective missions and home. At local level effective utilization of loans and grants should be advocated in order to realize the “value” in real terms. It is important that loans and grants transmit vivid economic value that can be manifested in the country’s transformation. 1.2 The case of trade and economic diplomacy: If you are a farmer cultivating farm products of any nature you may need to sell your products beyond the boarders and in exchange, you would like to purchase agriculture inputs and technology for effective production.
Just intro~ You need help with it, contact Mr Modest, Mero
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