International relations is no longer about political might and economic power, as was the case of the bipolar world during the cold war period when two blocs were developed around the erstwhile Soviet Union and the United States, especially during the second half of the 20th century. Most of the other countries were forced to choose between the two, barring a few exceptions! 

Yes, the time has changed and leaders all over the world are well aware that instead of politics driving economics, economics must drive politics. That is where the relevance of economic diplomacy comes, where many key decisions are taken at bilateral level at the same time expanding it to a multilateral dimension. Peaceful negotiations for the sake of long-term growth take the centre stage here rather than political might, and the world will no longer revolve around one political axis.

The recent statement by Oman’s Undersecretary of the Ministry of Foreign Affairs, Khalifa Al-Harthy, that His Majesty Sultan Haitham bin Tarik wants the country to focus on economic diplomacy, assumes greater significance in this regard.

It is said that economic diplomacy is the art of serving economic security and strategic interests of a country by the use of economic instrument in the conduct of international relations. This way, it can positively influence policy and regulatory decisions of foreign governments and international organizations, further cementing its bilateral relation, especially financial relations.

Since Oman is passing through a phase of transition, and it is devising new strategies to revive the economy and generate more employment opportunities by shifting its focus to new avenues, the decision to focus on economic diplomacy will act as a catalyst for sure.

It is a fact that the global economy is passing through a tough time in the wake of Covid-19 and Oman is no exception. Most of the labour-intensive sectors, tourist industry and also the service sectors have been badly affected thus toppling the economy everywhere. The dip in the oil price has further affected to nations depending on the oil economy. In order to revive, we have to devise a new strategy.

In such a scenario economic diplomacy can play a pivotal role in promoting the state’s prosperity and even influence its foreign relations with respect to commerce and finance to sustain of its foreign policy. We know Oman is a country that always stands for peace and actively take part in the negotiations to ensure harmony in the region. 

This diplomatic approach can be translated into the economic diplomacy as well, thus ensuring overall development in the region.

So, in order to take the overall growth to a higher pedestal, and improve its external relations, economic diplomacy plays a crucial role, because conventional economic approach and block thinking will not bring about the kind of development that we need in a global economy, where negotiations in many areas like free trade are the in-things. 

This is the reason why economic diplomacy has been recognized globally, where economics is more powerful than politics. This is equally applicable to producer countries and consumer countries because there is an economic bridge between the two.

Of course, diplomatic relationship involves the negotiations between the official representatives of the States but private sector has a crucial role to play when it comes to implementation, because it involves promotion of trade and investment too.

Though it is said that economics has more power than politics in economic diplomacy, it is actually a tool to achieve the political goals only. Hence the practitioners of economic diplomacy have to positively influence economic and commercial policies of the host-country, which needs diplomatic skills with economic tools.

Ultimately, economic diplomacy is the product of the multi-polar world where every nation has a key role to play and influence global economy for the benefit of its own economy. In this context Oman’s decision to pursue economic diplomacy assumes great significance in driving its economic growth in a new direction at the same time becoming a player in the global economic growth as well, especially among the GCC countries.

Since the Oman administration has a clear strategy to strengthen its economy and create more job opportunities it can definitely emerge stronger in a new world order in terms of economy.