Economic and environmental diplomacy: strategic context of development

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State University of Trade and Economics

Department of World Economy

Economic and environmental diplomacy: strategic context of development

Mazaraki A., Dr of Sc. (Ec.), Professor

Bokhan A., Dr of Sc. (Ec.), Ass. Professor

Annotation

Introduction. An important issue is to ensure the intensification of international economic relations in the context of globalization and the strengthening of environmental determinants. The use of mechanisms, models and tools of economic and environmental diplomacy will improve the competitive position and image of countries.

Problem. It is necessary to develop the potential of economic and environmental diplomacy as integrators of politics, economics and ecology, initiators of the functioning of platforms for consolidation of countries in solving global problems.

The aim of the article is to define the features of economic and environmental diplomacy in the context of strategic directions of development in the context of globalization and increasing international competition.

Methods. The methodological basis of the study are general and special methods, comprehensive analysis.

Results. The article considers topical issues of modern development of economic and environmental diplomacy, directions of policy changes in international economic relations, image formation and competitive positions. The development of the country's national economic potential on the world stage depends on new forms of diplomacy, mechanisms to protect the economic and environmental interests of countries, development of international dialogue, trade negotiations, business cooperation and intensification of business initiatives.

Conclusions. The development of economic and environmental diplomacy of Ukraine is a progressive type of activity aimed at representing and protecting the national interests of the country and assisting exporters in world markets.

Keywords: economic and environmental diplomacy, national brand, international competition, «soft power», economic globalization.

Анотація

Економічна та екологічна дипломатія: стратегічний контекст розвитку

Мазаракі А., д.е.н., професор, Бохан А., д.е.н., доцент, професор кафедри світової економіки Державного торговельно-економічного університету

Вступ. Важливим питанням є забезпечення активізації міжнародних економічних відносин в умовах глобалізації та посилення екологічних детермінантів. Використання механізмів, моделей та інструментів економічної та екологічної дипломатії, покращуватиме конкурентні позиції та імідж країн.

Проблема. Необхідно розвивати потенціал економічної та екологічної дипломатії як інтеграторів сфер політики, економіки й еко- логіії, ініціаторів функціонування платформ консолідації країн у вирішенні глобальних проблем.

Метою статті є визначення особливостей економічної та екологічної дипломатії в контексті стратегічних напрямів розвитку за умов глобалізації й посилення міжнародної конкуренції.

Методи. Методологічною базою дослідження є загальнонаукові та спеціальні методи, комплексний аналіз.

Результати. Розглянуто актуальні питання розвитку економічної та екологічної дипломатії, напрями змін політики у міжнародних економічних відносинах, формування іміджу й конкурентних позицій. Розвиток національного економічного потенціалу країни на світовій арені залежить від нових форм дипломатії, механізмів захисту економіко-екологічних інтересів країн, розвитку міжнародного діалогу, торговельних переговорів, ділового співробітництва й активізації ділових ініціатив.

Висновки Розвиток економічної та екологічної дипломатії України є прогресивним видом діяльності, що орієнтовано на представлення і захист національних інтересів країни та сприяння експортерам на світових ринках.

Ключові слова: економічна та екологічна дипломатія, національний бренд, міжнародна конкуренція, «м'яка сила», економічна глобалізація.

Introduction

Global vector of human development accompanied by economic contradictions between the centres and peripheries of the world, the intensification of the resource crisis due to anthropogenic pressure and irrational use of nature. Socio-economic contrasts between countries may diminish with effective international policies and the use of diplomacy. Because the emergence of new problems in this area correlates with various forms of resource and environmental expansionism. The context of the reality of the problems is reflected in the words of the Secretary-General of the United Nations Antonio Guterres: «The global community is at a critical moment in its pursuit of the Sustainable Development Goals (SDGs). The current crisis is threatening decades of development gains, further delaying the urgent transition to greener, more inclusive economies. Yet, with a surge in global solidarity and leadership from the highest political level, countries can still deliver on the 2030 Agenda and the 2015 Paris Agreement on Climate Change» [1, p. 2].

The modern space of international economy is formed on the principles of the globalization system of human activity. This area of public communication is a certain phenomenon of progressive, risky and innovative nature of activity. The peculiarities of the implementation of projects in the field of international business testify to the specific features inherent in it in comparison with other levels of its business (private, national, regional). But competition causes complication of mechanisms for mechanisms for their implementation, the state's initiative in presenting national potential in the international arena. Such popularization of countries is characterized by a wide range: cultural, economic, technological, information, etc. The most important of these is economic and environmental - the impetus to integrate all other areas of activities. This strengthens the position of the countries in the world markets and unites them to solve the global problems of humanity. In the face of globalization challenges, most countries are aware that their business interests must be correlated with social and environmental responsibility, as this is the key to competitive advantage.

Analysis of recent research and publications. Modern issues of diplomacy in scientific research include new thematic areas and combines various issues of international economic relations: the new economic diplomacy in context decision making and negotiation in international economic relations (N. Bayne N., S. Woolcock) [2]; international economic diplomacy: mutations in post-modern times (Saner R., Yiu L.) [3]; economic diplomacy as a subject and research agenda (Killian P.M.E.) [4]; environmental diplomacy in aspects of development: foreign relations and foreign policy, environmental history (Dorsey K.) [5]; global environmental diplomacy: negotiating environmental agreements for the world (Tolba M. K.) [6]; effective forms of environmental diplomacy (Nicolas L., Elie Kallab E. [7].

The aim of the article is to define the features of economic and environmental diplomacy in the context of strategic directions of development in the context of globalization and increasing international competition.

Materials and methods. In accordance with the purpose of the study in the article general and special methods, comprehensive analysis is studied. They intensify the understanding of its progressive directions, the impact on shaping the country's image and development of the potential of international competition. The informative base on this issue is a complex analysis of the renowned national and foreign scientists' investigation.

Results

A special feature of the study of economic and environmental diplomacy is its interdisciplinary content, where different aspects of international positioning of countries are present. Formation of leadership of the countries takes place with the active participation of politicians, diplomats and businessmen. This, in turn, alters the country's image construct by expanding its content, in which the ecological component is not yet sufficiently disclosed in the areas of external strategies, economic policy, and state-building of the consolidating model. International actors and countries should enlist the support of image-based economic and environmental diplomacy and be able to integrate it into the business system (Figure 1).

Figure 1. Aspects of the functioning of environmental diplomacy. Author's elaboration

But in this area of international activity there are obstacles to establishing contact, which makes it appropriate to use a «cluster approach» to identify a set of types of network interactions of international actors that have a dominance in the ways of their expression. The development of clusters of economic and environmental diplomacy affects the tasks of its participants, methods and mechanisms of response to economic processes. Multilateral environmental diplomacy integrates different areas of practice of international, business and public relations. Therefore, these clusters can be studied by characteristics: scale, specificity, sectors, topics, security, socialization, potential.

The challenges of globalization and the dangers of a pandemic are changing the living environment, ways of communicating and human activities. Traditional approaches to the formation of social relations, which are usually considered rational, often acquire irrational characteristics. One of the reasons for the formation of new mechanisms of interaction between the countries is the change of priorities of the development of society both in material and cultural terms. Therefore, the economic priorities of the country's development should be included in environmental diplomacy at different levels:

1) ideological (environmental policy, improving the environment of economic cooperation);

2) strategic (international and global partnership);

3) organizational (includes an international network of diplomatic support for initiatives of countries, international platforms for environmental, economic, business and public communications);

4) integration (participation of integration associations in the peaceful resolution of resource problems, intensification of international business in order to diversify environmental activities, expanding cross-border cooperation in preventing and combating environmental conflicts, etc.).

This created the conditions for the growing interest of countries in the image aspects of economic and environmental economic diplomacy. Some of its elements are stated in such a scientific and practical field as: the international image of the country, the image of companies, the national brand, the «green» brand. These topics are presented in a number of scientific works of researchers: domestic (D. Kislov [8]; T. Tsygankova, T. Zavgorodnya [9]; G. Polishko [10] and foreign (D. Akker [11]; S. Angolt [12];

J. Fan [13] and others. In particular, in their opinion, country branding is a complex process of reconciling market actions, political efforts, business strategies, attracting investments and innovations, establishing international communications in order to form an associative model of positive perception of the country. economic environmental diplomacy international competition

At the present stage, international competition and integration between states causes a change in their positioning in the world markets and the formation of leadership dominations through the renewal of national branding. One of the important aspects in this field is the consideration of greening trends in international economic relations, which have the specific implementation. They adjust countries' positions in international rankings and change the performance of the global economy. Foreign experts are paying attention to the issue of «environmental progress» in various formats of negotiations, international conferences and summits on global issues [14]. For example, the 2020 Environmental Performance Index (EPI) ranks 180 countries on 32 performance indicators in the following 11 issue categories: air quality, sanitation and drinking water, heavy metals, waste management, biodiversity and habitat, ecosystem services, fisheries, climate change, pollution emissions, agriculture, and water resources. These categories track performance and progress on two broad policy objectives, environmental health and ecosystem vitality. Leaders of this ranking: Denmark, Luxemburg, Switzerland, United Kingdom, France, Austria, Finlandia, Sweden, Norway, Germany (table 1).

Table 1

The country's position in the ranking EPI 2020*

These indicators provide a way to spot problems, track trends, understand outcomes, and identify best policy practices. Good data and fact-based analysis can also help government officials refine their policy agendas, facilitate communications with key stakeholders, and maximize the return on environmental investments. Overall EPI rankings indicate which countries are best addressing the array of environmental challenges that every nation faces. This comparative perspective can assist in understanding the determinants of environmental progress and in refining policy choices [15].

A feature of the XXI century there are obvious exacerbations to the emergence of unknown global environmental and social dangers that are initially veiled and then increase their momentum under «comfortable» conditions for them to manifest. In today's context, there is a certain perception of certain cells, territories, regions and countries of the world, where these threats can become widespread. In this case, the application by countries of the principle of «preventive» in international politics and business means a set of measures for the timely prevention of ecological hazards and conflicts, the promotion of economic modernization and balanced use of nature, the initiative to promote new eco-innovative development strategies, strengthen the social economy and strengthen the social credibility «green» international business, enhancement of ecological safety.

But even in the face of such multilateral diplomacy, precedents of «environmental polyphony» arise when some politicians discuss ways to preserve the environment and others call for the irrational forms of nature management in international business. Such statements, which are deliberately resonant, provocative or unpromising, give rise to a certain environmental image of the country by its representatives. Maintaining a high level of international order in this aspect involves the use of the forces of economic and environmental diplomacy as one of the progressive institutions. It includes an arsenal of tools to strengthen the country's authority / image in the world. International cooperation and aims diplomatic assistance aimed at the development, progress and security, covering three main areas: politics, economics, ecology.

International competition, diversification of interaction of actors, agents and market participants forms a new policy of diplomatic messages through the positioning of countries in the ratings, the development of «soft power», image, brand, cross-culture, economic growth. Prospects for the development of new types of economic and environmental diplomacy in tandem depend on their role in shaping the country's image (table 2).

Important indicators in this process are the achievements of countries in the «Soft Power» - strategies help enormously to create positive, lasting perceptions and thus to ensure a nation's best possible competitive positioning. Global Soft Power Index 2021 provides even more in-depth information and analysis, with an increase in survey numbers to 75,000 people from the general public and over 750 specialists from over 100 nations. As last year, measures of soft power are expressed under three main headings - familiarity, reputation, and influence - and based on the seven Soft Power `Pillars' of: «Business & Trade» (economy, business, brands, taxation, trade, investment, infrastructure, future growth); «Governance» (rule of law, human rights, crime rate, security, constitution, political elite); «International Relations» (diplomatic relations, international organizations, conflict resolution, international aid, climate action); «Culture & Heritage» (tourism, sport, food, fine arts, literature, music, film, gaming, fashion); «Media & Communication» (traditional media, social media, marketing); «Education & Science» (higher education, science, technologies); «People & Values» (values, character trust) [16].

Table 2

Diplomacy in the context of environmental issues and the formation of a positive image of the country. Author's elaboration

However, there are some additional questions and modifications, including a new statement about future growth potential and a survey of public opinion on nations' handling of the COVID-19 pandemic. No nation was free from the pandemic turmoil and all nation brands have been impacted. The concept of soft power is an alternative method of foreign policy for states to win the support of others. Ultimately, soft power is the ability to convert states rather than coerce them, or simply «getting others to want what you want», which is achieved by proving your shared values and norms. Technology, education, economic and ecology growth are becoming more significant in international power [16]. Countries are leaders in the ranking «Soft Power» are represented in the table 3.

For example, Ukraine's performance in the Global Soft Power Index 2021 is stable, with an overall Index score of 31.9 out of 100, up 0.2 points year- on-year. However, due to the expansion of the Index and improved relative performances of the other nations, Ukraine has dropped 15 spots, ranking 61st overall: familiarity (4.8), reputation (5.3), business & trade (2.3), governance (1.8), international relations (2.0), culture & heritage (2.4), media & communication (2.0), education & science (2.0), people & values (2.5), COVID-19 response (26). The general public perceives Ukraine as a nation with friendly and trustworthy people, with a strong educational system, and open to international business and trade. From an economic perspective, Ukraine keeps improving its identity as a nation open to international business and trade. The nation ranks well within the top half for its future growth potential and recent legislative reforms in the areas of land and finance are the key markers of readiness to realise this potential. There is space for improvement, however, with the nation perceived as less easy to do business with than last year. This correlates with the view of security and leadership in the country, given the current political and global environment [16].

Table 3

The positions of some countries in the Global Soft Power Index. Made by the author using [15]

Economic and environmental diplomacy is an integral part of the national brand, expanding the functionality of domestic and foreign diplomacy. The active development of this type of diplomacy should ensure the dynamics of business interactions. Diplomacy contributes to the management of international economic relations. This scientific parallel can also be used to develop the idea of diplomacy in world trade and international security.

For example, the Munich Security Conference is one of the most important events in world politics. In 2022, the conference was unprecedented in the history of the meeting of diplomats and government officials, where the main topic was Ukraine. Discussions included issues of military escalation in Ukraine and adverse trends for the Western allies. This conference became a platform for Ukraine to present its messages and agendas in the context of opportunities to unite the world around them. But it is possible that in the future Ukraine's image position will be announced as the main topic of the Davos Economic Forum.

Globalisation has transformed the organisation of international economic relationships around the world, affecting the economic, social and political spheres of societies and citizens. It is characterised by a complex set of interconnectivities and interdependencies with an increasing number of actors vying to influence the outcome of these relationships. They lay competing claims to resources, markets and legitimacy and are engaged in activities traditionally defined as belonging to the domain of diplomacy [2, p. 3]. The progressive direction of diplomatic activity includes issues that change the perception of tools, models and forms of action in economic globalization. Image-based economic and environmental diplomacy uses new marketing technologies:

1) determining the specific environmental and economic interests of other countries in the process of international dialogue, negotiations and cooperation;

2) expanding the network of diplomacy to present a national brand in which environmental attributes should enhance its multifaceted dimension and perception using a position in various international ratings;

3) introduction of ecological knowledge, eco-concepts, ecoinnovations, ecoinvestments and eco-technologies into the sphere of business for presentation or promotion at international exhibitions, forums, business negotiations, etc.;

4) formation of diplomatic efforts and motives for strategic partners to develop international ecological and economic cooperation;

5) participation of politicians, diplomats and businessmen in international environmental projects based on the use of Internet resources and social networks, digital-diplomacy, twitterdiplomacy;

6) generating new diplomatic initiatives to stimulate reforms in important areas.

From this review, G7 members are partners of Ukraine, who share a common understanding of freedom, democracy, the rule of law and human rights. At their 2015 Summit in Elmau, G7 leaders have tasked their Ambassadors in Kyiv to encourage and support the Government and citizens of Ukraine on their way towards a more secure, prosperous and resilient country. In 2022, the ambassadors of the G7 countries in Kyiv presented the priorities for this year. They will continue to encourage Ukraine to reform security and defense, taking into account the views of the government, parliament, civil society and business. The G7 ambassadors identified three groups of priorities in which they will work: fair and sustainable institutions, a prosperous economy and a secure country (Figure 2) [17].

Figure 2. Priorities of the support group for Ukraine in moving forward

For example, «Prosperous economy» includes:

1) Economic growth (supporting a strong, independent National Bank of Ukraine; supporting Ukraine's continued fruitful engagement with the international financial institutions; further implementation and monitoring of effective, equitable land reform; transparent privatisation of state-owned enterprises and banks, and improvement of corporate governance of those remaining under state control, in line with OECD guidelines; expansion of non-road based transport infrastructure such as inland shipping and railways and improved interoperability between them);

2) Green transition and energy reforms (implementation of energy sector reforms which promote investment, demonopolization and transparency, while ensuring the independence of energy and nuclear regulators; exploration of new energy sectors such as (green) hydrogen technologies and renewables to strengthen energy independence and generate new sources for energy exports; reforms and actions that support Ukraine's contribution to global action on climate change, including decarbonization, clean energy development, a fair transition away from fossil fuels, and energy efficiency [17].

The realities of today also require a change in the mechanisms of diplomacy's response to force majeure: natural disasters, extremism, terrorism, hostilities. During the Russian-Ukrainian war (2022) there was a strong international, political, economic and civil consolidation in defense of Ukraine. In this situation, the ecological and economic ambassadors of Ukraine acted as a joint «front of action» based on institutional cooperation, expanded the functions of support, mobilization and protection of the country, as well as included new elements in the image of their own country.

Conclusions

Modern economic and environmental diplomacy is necessary for the development of international economic relations, which aims to unite the efforts of countries in their pursuit of progressive shifts. For Ukraine, it should be associated with new opportunities for its own presentation in the global economic space and improving the environmental level of competitiveness in the world. We are convinced that the unlocking of new levels of international business potential can also be realized through constructive decisions and practical actions by countries, conservation of ecosystems and biodiversity, protection of ecological human rights and fulfillment of obligations to improve the level of ecological safety. A positive image of the country can be created by the joint efforts of society.

References

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13. Fan, Y. (2010). Branding the Nation: Towards A Better Understanding», Place Branding and Public Diplomacy, 6(2), 97-103.

14. Klyajn, N. (2016). Zminyuyet'sya vse. Kapitalizm proty klimatu [Everything changes. Climate capitalism]. per. z angl. D. Kozheduba. Kyiv: Nash format [in Ukrainian].

15. Environmental Performance Index 2020. Global metrics for the environment: Ranking country performance on sustainability issues

16. Global Soft Power Index 2021.The world's most comprehensive research

17. G7 Ambassadors' Support Group for Ukraine Priorities for 2022.

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