Monday, June 15, 2009

Mauritius: Diplomacy with a Sense of Realism

The visit this week of the Chinese President, Mr Hu Jintao, to Mauritius as the last leg of his mission in four African countries, is important. It confirms a long-standing good relationship between the two countries. Its conclusions in terms of economic and commercial agreements fully underscore the tenor of the visit. This means the relations will be grounded in the harsh terrain of economic realism. Unlike other African countries which Chinese dignitaries have been visiting for quite some time now, Mauritius does not have a steady source of raw materials to offer, which China needs to pursue its growth and expansion. Mauritius is seen more readily as a reliable transmission channel, neither because of its physical geographic position nor out of sentimental values like the presence of a Chinese Diaspora. To assert global leadership, China needs to become increasingly trusted as a friendly counterparty by the world. It needs to associate itself with countries that have earned the respect of others as role models.

Mauritius has, by dint of hard work over several decades, joined groups of countries that could play important commercial and political roles at the international level. In the African groups, in particular, Mauritius has earned a lot of goodwill for taking constructive domestic initiatives that have served to raise its general profile. Major countries gain by coming closer to such countries. For decades, we have been associated with the COMESA African bloc, a grouping of some 20 north, eastern and south African countries. Unfortunately, this bloc has a very poor record in terms of realisation, but it is here. The SADC is another grouping of eastern and south African countries of which Mauritius is a member. This one is a more realistic bloc than COMESA. It has set itself targets of external trade tariff harmonisation among member countries and, in fact, it has been implementing the reduced tariffs scheme with commitment and realism as a means of encouraging intra-group trade. It has good credibility, with South Africa as a major springboard of the group. If SADC works its way up towards forming an economic union of its membership, there is a potential for China to drive a part of its economic relations with Africa through Mauritian enterprises.

China does not need Mauritius absolutely to pursue its objective to source materials from Africa. It does not need a commercial outpost in Mauritius either to be able to carry on its trading and investment activities over there. It can go directly to any one of the countries. There can however be an add-on for it to bring Mauritius into the equation because we appear to have a compulsive need to build bridges with other countries on the African, Asian and other continents. Mauritius could yield more sophisticated and wider-ranging access to a wider international network. Moreover, it is a fact that we can tie up economically more widely with the world as compared to several countries of the region. It may be recalled that our abiding close ties with Europe and America brought a number of investments from East Asia into the country in the 1980s , at a time when the WTO had not yet started flattening trade tariff discrimination among countries. In global geopolitics, we are perceived as neutral enough not involved. This is a vantage point on which we could have pursued our diplomatic efforts.

The example we see in China’s efforts to bring neglected countries, African countries in particular, into the mainstream is a pointer to the efforts we can make to improve our own diplomacy. Here is a country that is bound to become a dominant force in the global economy. It is also one to be increasingly reckoned with now and when global growth eventually resumes at a higher pace. It is nevertheless stretching out its hand to enable others to join the bandwagon along with it. This kind of gesture will serve it well. It will extend the circle of its friends all around, no matter how unimportant they are at the global level.

In contrast, our diplomacy verged on the brink of collapse only some years back when we thought we could threaten a long-standing friend like Britain with reprisals and breaking away from the Commonwealth. We have hardly successfully used our diplomacy, in areas where we lack the technology or resources, to extend the outreach of our economic activities intelligently. Instead of looking for a common enterprise with potential similarly placed allies, we have been fighting our battle more or less alone. We need SADC or COMESA more than they need us. On occasion, we have even asked for trade regimes in our favour that were being thrown out at the time, such as preferences. No doubt, we should not have allowed those preferences to go without delivering a fight but we should have been working with friends and allies simultaneously for a tangible recuperation of the resulting economic contraction in the short term. The more we have to offer to other countries, the more we will be respected. The more we ask others to come to our help, the less, it will be judged, we know how to put ourselves to discuss from a position of strength.

The ongoing international financial and economic crisis heralds a period of uncertainty ahead of us. The world may well land into some sort of protectionism, at least for some time. It could be at the level of individual countries or at the level of large economic blocs or both. Were this situation to endure, we would have much difficulty to fend for ourselves. In fact, outward-oriented countries like ours may be explicitly targeted. The new American administration has already given hints that it is not seeing kindly offshore financial centres which are perceived to have wrought a good part of the current havoc in the international financial system. International flows of investment have come down sharply and India, which is a market that we have traditionally served, is experiencing a continuing net outflow of capital. All this does not portend well for our economy.

In situations such as this, we ought to have been cracking up making new inroads with friends and foes alike, to open up more scope for our economy. This is where the visit of the President of China tells us that we should not, like ordinary bureaucrats, be following up only on the files that have gone through. We ought to be working hard to identify in which manner we could compensate for the loss of markets and advantages we have long held in the West. These markets and advantages are frittering away against the background of recession. So, we should be bringing new arrangements into play to re-position ourselves. Unless there is a proposal on what next could be undertaken by two friendly governments, there is a risk, as in the case of India, that people will start questioning existing arrangements to our detriment. This is the kind of realism that our new diplomacy demands. If we are not up to it, others will have taken advantage of the tide when it will lift and we could well find our ship grounded.

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