Case Study: Effectiveness of Commercial Diplomacy for Export Promotion

Abstract

A trade mission abroad works with the business objective of promoting bilateral trade and investments. Within this broad agenda, enhancing exports to the host country is the foremost priority. In the context of Pakistan, a trade mission, with rare exceptions, comprises of a Civil Servant selected by the Ministry of Commerce (MOC) supported by a Trade Development Officer (hired locally) and a Commercial Assistant (a government official). The general tendency is to locate such missions within Pakistan embassies at national capitals not only for austerity reasons but also to capitalize on synergies with political or other diplomatic initiatives. In addition to their routine budgets trade mission can tap resources from an “Export Management and Development Fund (EMDF)” for new business promotion and market outreach activities with prior approval. Despite these institutional arrangements catering for financial and HR needs, a Commercial Diplomat finds himself in unchartered territory. Prior to his arrival in the host country, his knowledge of the host country and its business dynamics is rudimentary. Post-arrival, he is cognizant of the requirement to familiarize himself with the language and culture of the host country and be up to speed in identifying and seizing upon business opportunities. The expectation is that he will develop an effective network and swiftly develop “social capital” in the host country to attain the twin objectives of export and investment promotion. The Commerce Ministry, wanting to extract value for money from the expensive arrangement of maintaining trade missions abroad, assigns export targets and subject trade missions to periodic performance monitoring.