Increasing impact of economic diplomacyEconomic diplomacy has emerged as an important element on the global stage at the present time. Due to the impact of globalization, the importance of economic elements in place of political elements in foreign policy has increased immensely.
There used to be exchange of goods, capital and individuals between the nations even before, but under globalization both the intensity and frequency of this exchange has increased. While privatization is accompanied by increasing scope and participation of the private sector in economic processes, under liberalization, the state control in the economic sector is relaxed or eliminated.
This does not mean that economic diplomacy did not exist before it But earlier economic diplomacy followed political diplomacy, now economic diplomacy has gained prominence. This fact can be proved by the content of bilateral and multilateral relations between nations
The second important means of economic diplomacy is investment. Although capital investment has been a means of economic diplomacy in the past, but in the era of globalization, capital investment has been liberalized by nations. Therefore, both government and private capital investment is increasing rapidly. The third important tool is development assistance.
Technological transfers are also a major means of economic diplomacy.
(This is my entry for the TOW topic : Diplomacy )