Companies operating abroad benefit very much from the presence of embassies and consulates and it is therefore unwise for countries to make cuts to their diplomatic networks, the Financieele Dagblad said on Monday.
The paper was quoting from a thesis on economic diplomacy by Erasmus University researcher Selwyn Moons, who investigated the importance of embassies, consulates, export agencies, trade missions and state visits in 63 countries. Together, they represented 90% of the global economy.
‘Businessmen know how to find an embassy whether it is to obtain a visa, information or to find someone to help them with their problems,’ Moons said.
The presence of an embassy doubles the chance that a company would enter a market, he said. In addition, revenues booked there are scores of percentage points higher when there is an embassy involved.
Moons says there has been increasing pressure on existing bilateral trade agreements recently, citing Brexit and US president Donald Trump’s ‘America First’ policy. In these cases a well-maintained embassy network is all the more necessary, he said.
Moons, who is also acting director of the economic affairs ministry’s sustainable economic development unit, said well-established contacts are necessary to doing business abroad. Trade missions often delivered results but these tended to be short-lived. Embassies, he said, are the best instrument for economic diplomacy.
At the end of May, a government think-tank issued a warning about the Dutch embassy network.
It said an extra €70m to €80m a year needs to be spent to bring Dutch embassies up to scratch. Staff levels have been cut by one-third compared to 20 years ago and interns are being assigned to posts formerly held by diplomats, the AIV claimed.