Economic and commercial diplomacy in micro-states : a case study of the Maldives and Mauritius

Abstract

Most small and microstates are characterized by, inter alia, acute resource constraints; diseconomies of scale; geophysical constraints; vulnerability to natural disasters; susceptibility to external shocks; pressing socioeconomic capacity constraints; narrow economic base and concentration of exports on a narrow range of commodities and markets; dependence on foreign resources; and small domestic markets. As the level of capacity required to gainfully engage in the complex world of international economic diplomacy is burdensome for small countries, a large number of microstates are still adequately equipped to defend and promote their interests m international negotiations. Inadequate institutional and legislative frameworks coupled with acute capacity constraints to meet the depth and breadth of issues discussed at these international fora, prevent several micro and small states from gainfully utilizing the tools of economic and commercial diplomacy at international fora such as WTO. As economic diplomacy is being recognized as a crucial element for the development of small and vulnerable countries, microstates are taking concrete steps to acquire the capacity and the resources to increase their participation and voice their concerns at various international forn. They are attempting to find innovative and cost effective means to address these challenges. Considerably headway has been made already by some countries in adopting practices used by advanced economies. These practices are emerging as the tools for microstates to proactively engage in an international environment, driven increasingly by economics.