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Diplomacy and economic security of Kyrgyzstan

Muratbek Imanaliev, exclusively for IPP

The second half of the twentieth century brought new actors, as subjects of international life, to the world stage. There are many reasons for this phenomenon; among which, one should probably mention the achievements of science and technology, economic development, primary impulses of globalization, and the democratization of international relations. All of which, have triggered the formation of public diplomacy. Global and regional international organizations of various types, transnational corporations, nongovernmental and public organizations joined the classical players in international relations - governments and states. It should be stressed that they are not always dependent on governments; sometimes it may be vice versa. And today "vice versa" happens more often.

In recent years, various international criminal syndicates, some even claiming to be leaders of certain segments of humanity and rulers of thoughts and aspirations of the people, also joined the above-mentioned subjects of international life; but not international law.

All the actors are interrelated and interdependent within the limits of a generally positive system of political, economic and humanitarian interaction. Often, however, this interaction has negative dynamics and meaning, as in the case of cross-border criminal organizations; although the other members of international relations contribute to the consolidation of these negative aspects.

Each of these actors of international communication has its niche. Governments promote their interests, sometimes justifying their actions by certain principles and values; but in most cases offering them as an "international commodity", in which they "pack" their real interests. A good half of the states today can cleverly and cynically protect and promote their real interests, while the other half, still unable to stabilize its internal life and formulate national interests, is a subject of various "great games" and other political combinations.

Non-governmental organizations and transnational corporations are also successful in the demonstration of their own interests. They openly or covertly qualify their interests as national interests.  Sometimes without any ceremony, they call these interests universal.

Promotion and protection of national interests are implemented through many mechanisms, including: power and economic resources, consolidation of the elites in society, and reasonable domestic policies. All of these have been accepted by international society. However, an important element of reserving the political base for the strengthening of a country's political position in the international arena (national interest) is the reputation of the country and its government.  A country's reputation develops or destroys the confidence of the international community. And in this case, a level of trust creates an interest in the country by all actors in the international arena. (Of course, one should not forget about the significance of geographical location, natural and other resources, population of the country, etc.)

The reputation of Kyrgyzstan has gone down since 2000. The beneficial and favorable image of our country as an "island of democracy," which was (one should honestly admit) a tremendous advantage for Kyrgyzstan in its relations with the developed world and its neighbors, was destroyed by the Kyrgyz state authorities of that period. In the early stages of independence, the authority of Kyrgyzstan as a democratic state was actively supported not only by the West, including governments, international intergovernmental and nongovernmental organizations, but also by the East.  It served, in a sense, as a reliable and effective tool in the development of the Kyrgyz state. It was also a kind of protective mechanism in the fight against organized crime at the international level. Nevertheless, there still remains some optimism about the future of the country, which so far has not lost the "transit" capacity for positive change.

The most important resource base for foreign policy and a kind of signal to the international community is the demonstration of cornerstone elements in domestic policy. In this context, constitutional, administrative and economic reforms, reducing corruption, combating organized crime, as well as the removal or neutralization of the existing crisis corridors, could provide Kyrgyzstan with sufficient "capital" to promote its national interests in the international arena.

As many of the most authoritative scholars and experts in the field of economy have predicted, global economic and financial turmoil will not only be deep, but also very long. In this context, given the current state of the Kyrgyz economy, above all, its comprehensive vulnerability to these shocks, the most pressing issue for the country's survival (survival, not development!) is an urgent need to concentrate on the most important areas of economic security and on the political calendar of accurate and daily implementation of necessary measures. It is obvious that economic diplomacy is a very popular tool for addressing the issues of economic development and economic security.

The active and strong incorporation of transnational corporations in the international space, including the political one, as it was mentioned above, is evidence not only of their growing influence, but also of the dominance of the economic factor in international relations in today's rapidly changing world. In this connection, the role of so-called economic diplomacy becomes more important.

"Diplomacy and business have much more in common than many people think, and today's diplomacy is moving towards consolidation of this commonness. Before the nineteenth century, diplomats were primarily engaged in politics. Historians often compare the diplomacy of that period with chess games, where each party sought to outflank its rival. In the nineteenth century, military force was most valued on the world chessboard. In the twentieth century, it was greatly mixed with ideology. Now, in the beginning of the new millennium, diplomacy once again reminds us of the chessboard - but with one important difference - the players mostly protect their economic interests." This is a view of one of the most influential Soviet and Russian diplomats, former UN Under-Secretary-General V.F. Petrovsky (1). A famous Swiss scholar and diplomat, H. Miller, shares his view, "The days of elegant diplomacy are over. In the past, it was symbolized by contracts, hats with feathers and strict protocols. Now it does business. The task of modern diplomats is to help large companies sign profitable contracts, advise businessmen how to do business abroad and attract investment to their countries. Although diplomats still spend much of their time and resources for purely political issues, foreign affairs services throughout the world are undergoing radical reorientation because of the destruction of traditional walls between politics and economics, government and business."(2)

In connection with the above mentioned, I remember a case from my own diplomatic practice. In the process of reconstructing the hotel, "Kyrgyzstan" into the hotel "Hyatt," the Mayor's office of Bishkek had some claims against the "re-constructors," settlement of which could subsequently lead to complications in the functioning of the hotel and unforeseen financial and other expenses for the new owners. The U.S. Ambassador to Kyrgyzstan came to me the next morning after the outbreak of the conflict and asked me to urgently help solve this problem. One of the reasons why the State Department paid so much attention to this problem was that, among other things, including bilateral relations and investment in the economy of Kyrgyzstan, the "Hyatt" was one of the largest American companies.

Undoubtedly, today it is very important for the diplomatic service of Kyrgyzstan to solve several problems. First, there must be a serious analysis of the situation and of possible ways out of the crisis.

Recent studies have suggested that the magnitude of understanding economic security has substantially increased; compared with previous studies in this area. Previously, security was associated only and mostly with the state (considering that it was a zone of government's responsibility) and subsequently with the society.  Today, economic security (as any other kind of security) is associated with the triad - individual-society-state. And the emphasis is made not on the subjects of international relations, but on their vital interests.

In this regard, the following directions of economic security seem to be the most important for Kyrgyzstan: 1) energy; 2) food; 3) finance and investment; 4) demography; 5) environment. Therefore, I believe that security threats should be viewed as threats to the interests of individuals, society and the state within the limits of the above-mentioned vectors of economic security.

Of course, they all have internal and external manifestations. Some experts might think that only the latter is related to economic diplomacy. Security as such, having internal and external manifestations and dimensions, remains an integral entity today. Its internal and external components should in no way be understood as its form and content. That is why, while formulating the basic directions of economic diplomacy, internal aspects of security, internal causes and consequences of some economic situations should be taken fully into account and with all the parameters. In other words, diplomacy is obliged to turn and "face" the internal situation.

In this regard, it is extremely important for "diplomat-economists" to understand the following fundamental problem. Which internal factors provoke the emergence of threats to the interests of the state and how does one eliminate them? From this perspective, it is necessary to understand that the subjects of international relations are not the main factors but their activities and interaction between them are the more important factors. They are, for example, corruption, uncompetitive economy, backwardness, inconsistency of interregional division of labor, destruction of management system, etc. Therefore, the focus should be made not on changing the political system but on bringing it into line with the requirements and interests of the above-mentioned triad. An eloquent example is the U.S. policy in the years of George W. Bush, whose presidency has escalated global anti-Americanism. But lately, it has been more anti-Bushism, not so much anti-Americanism. There are also several ethno-psychological factors in the same category, although in a different context, which should be properly used. From my point of view, diplomats should know and take into account these factors when analyzing and modeling economic projects.

A very crucial aspect of economic development projects of Kyrgyzstan, not only from my point of view, is the modeling of economic space even in the conditions of chaotic formation of the market.

Constitutional and legal space of Kyrgyzstan's sovereignty is limited by national borders, but the economic activities of Kyrgyzstan should go beyond those limits; for example, into the Central Asian region. It is not difficult to understand that the market, limited by borders of Kyrgyzstan, is insufficient for the development of its economy. A good example is the USA, whose economic space (including, perhaps, mainly American companies) embraces the whole world. There is no need to say that in the global economic space, not only American transnational companies have the support of their government, but also the government itself views it as an area of its responsibility. Other examples are the European Union, ASEAN, etc. I am therefore convinced that the integration of Central Asia and the formation of a single (really functioning!) market, at least in this space, should be a priority task for Kyrgyzstan's foreign policy, and therefore Kyrgyz diplomacy should actively promote this idea. At the same time, ensuring other aspects of security is impossible without joint efforts. So, interrelation between politics and economy is obvious in this case. All this means is the need for internationalization of the Kyrgyz economy.

Modeling, based on the entire range of interests for Kyrgyzstan, requires determining regional and country directions of economic cooperation with high priority. One of them, the most prioritized, has been already mentioned here. I would only add that it is necessary to work both "in" and "with" the region of Central Asia.

Another important direction in this sense is Russia-Kazakhstan. Why? Taking into account the "Eurasianess" of Russia and Kazakhstan and full range of domestic factors, some of which will be more significant and clearly marked in the foreseeable future, I think that in the near future foreign policy of Russia and Kazakhstan will greatly expand as these two countries  move towards a single economic space (something like the North American economic zone, but within the continent). Not only internal factors, including historical and cultural, will encourage Russia and Kazakhstan, but also external factors, including the worsening security situation. That is why Kyrgyz diplomacy should already think and develop schemes of Kyrgyzstan's possible entrance into this economic space. The only question is how and on what terms. It should be thoroughly thought over and discussed with our Russian and Kazakh friends.

Another important resource for the development of Kyrgyzstan is, of course, the Chinese direction. It is obvious that the 15-year period of national disasters in China is over, and the country is now steadily developing. The day when China will become the leading economic power in the world is approaching. But to build a fair and mutually beneficial partnership with such a giant, we need to know it and know it very well. Therefore, an important task for Kyrgyz diplomacy is to create a serious Sinological school: diplomatic, economic, law, military, cultural, etc. The problem today is that our knowledge of China is very poor, and own perception of this country is still based on the old Soviet propaganda and some pseudo-historic "events", etc. In this regard, our future task is to become competitive with the Chinese in the area of business activity, patience, prudence, diligence, etc. But we should not attempt to reach such competitiveness by "overtaking" the Chinese in the areas where the advantage of China is undeniable.  Instead, we should use our own unique positive properties of the national character, by forming our national economic culture, social and economic organization and advanced political system. Of course, we have to learn a lot. Our diplomacy should help the formation and development of these processes.

In our relations with the West, the prevailing problem is the cooperation with donor organizations. In this context, Kyrgyz diplomacy has an urgent task to study the experience of cooperation of international economic and financial organizations with some Asian and African countries. This is important, although we have some experience in that sense. Nevertheless, we must understand that the cooperation with these organizations will continue for a long time, and our strategic aim in the relations with the West is to move from the format of "donor-client" to the format of "partner-partner." I am reminded of, for example, how South Korea was able to do this. The experience of South Korea is very important for Kyrgyzstan.        

I would also like to make a brief remark on the methodological basis for negotiations, for example, with the IMF. I still do not understand why only the Ministry of Finance and the National Bank of Kyrgyzstan hold negotiations with this organization. "Departmental" vested interests during the negotiations and other contacts is more than obvious, in particular, in their results. I have always believed that negotiations with international financial organizations should be held in a delegation format with the participation of the Ministry of Foreign Affairs, Ministry of Economic Development, the National Security Council, the Ministry of Social Protection, etc. Basic competence allows diplomat-members of the Kyrgyz embassies to lead fruitful conversations with their U.S. and European counterparts.

Developments in functional areas are very important. Among them, the most important is the issue of increased isolation of Kyrgyzstan. The first area to consider is transport and communication isolation of the country. If we look at the map of communication projects - railways, highways, airlines and pipelines - we will notice that they all bypass Kyrgyzstan. The second area is the major financial and investment flows emerging in the Eurasian space.  These also bypass our country. Thirdly, in the same situation, is the international tourist map. Kyrgyzstan has achieved success only in two directions, although no thanks to its own efforts. They are: the movement of Chinese goods through the Kyrgyz bazaars, and international military communication because of Afghanistan and the interests of great powers. To be honest, the latter has brought no real economic and financial dividends to the country. However, it can be turned around to be used positively.

The lack of Kyrgyzstan's active involvement in the formation of transport, financial and other communications, from my point of view, is one of the reasons for large-scale outflow of people from Kyrgyzstan: people have been moving and will continue to move to the countries where something is formed and constructed. It is an axiom.

Second, it is a problem of organization of economic diplomacy. "Human resources solve all" is a slogan of all times and peoples. As for the education of modern diplomats, it would be useful to bear in mind that, according to experts, "any career diplomat, in order to work effectively, must also have professional skills in selected areas of international relations (military, humanitarian, environmental, etc.). Moreover, in approximately 80 per cent of cases, such knowledge should be economics."(3) Training and re-training of diplomats must be a continuous process. I think the question of further development of the Diplomatic Academy should be considered at the level of the President. This institution should have a special status in the system of higher specialized education. It is obvious that such a school must have a solid material and financial base, highly professional teaching staff, and probably its curriculum should include a number of courses of a closed or, at least, not open for the public character. This is a common practice in the West and the East. Not only the employees of the Ministry of Foreign Affairs but also the employees of the National Security Council, Ministries of finance, economic development, education, etc., should be trained and re-trained. Diplomas and certificates of the Diplomatic Academy must be highly ranked among specialists and civil servants. It must be confirmed by the state, for example, by a relevant Decree of the President or a Decision of the Government, and it should be taken into account in hiring and promotions. The main thing we should remember is that a diplomat is a very expensive "piecework," and the training of a professional diplomat takes 10-15 years. This is the backbone. Representatives of other Ministries, who can and should work in the Ministry of Foreign Affairs, ought to perform highly specialized work in projects and upon completion of such projects, they must return to their Ministries to continue "sectoral economic diplomacy." Another difficult problem is forming a system of economic diplomacy. It is clear that this problem remains within the framework of general problems, but nevertheless, economic activities should be separated. There is no need to talk in detail about the formulation of interests, their promotion and protection abroad, working with local businessmen, the creation of political, economic and legal conditions for the normal operation of the business environment, availability of serious projects, etc. I would like to raise only one topic, which is, frankly, already written to death. It is the topic of attracting foreign investment. I cannot say why the amount of financial investment into the economy of Kyrgyzstan, attracted by the efforts of diplomats, is considered a criterion of their effective economic work abroad. Simplification of the problem reflects, of course, the existing and emerging trends in the national economy of the country. But there are a few fundamental points. It is clear for me that there are really skilled and active people in the Foreign Ministry and Kyrgyz Embassies who can attract investment. And they do it. But since the system of attracting investment in our country is not a complete cycle, and sometimes it is politicized or criminalized (corruption, etc.), the process often ends with disappointment. And the process does not stop here as it accumulates negative points.  This presents a very serious threat to the country and its future. First, frustrated and often angry foreign businessmen deliver not only to their homeland, but in general, to the international business community and the governments of other countries unpleasant information about Kyrgyzstan.  Thus, thereby creating a negative image of our country. Second, some light-fingered businessmen, seeing the situation in Kyrgyzstan, begin to think that, since Kyrgyzstan has become, say (as they imagine) a half-criminalized offshore zone, they could launder money, smuggle, etc. in our country. Again, this contributes to the negative image of Kyrgyzstan. In this context, an important task of our economic diplomacy is to avoid rolling into this abyss.

The process of attracting foreign investment therefore should have a complete character. In particular, for foreign businessmen, it should be a clear process - from invitation to the country to the dividends they anticipate. Of course, the interests of the state, society and people in the country should be taken into account. This article raises only a few important, issues relating to economic diplomacy in Kyrgyzstan. In general, this is a very serious issue, not only for discussion, but, for concrete and daily action. But the main problem is that economic diplomacy is a set of systems and processes that in no way can be withdrawn from the context of the overall development of the Kyrgyz nation.

 


1. V. Petrovskiy.  Geoeconomics and politics.  Mejdunarodnaya jizn' ¹9, 1997, page.3.

2. H. Miller.  Diplomats take off white gloves, World Link, Geneva 1996

3.  Gui Cupon de la Carriere. Economic diplomacy and the market, M. Rosspen, 2003, p 5

 

Muratbek Imanaliev, President of the Institute for Public Policy (IPP)



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