Globalization has been changing U.S. foreign policy since the beginning of the American Republic. From our first diplomatic post in Tangier, Morocco founded in 1777, to the more than 285 diplomatic facilities around the world today operated by the U.S. Department of State, the business of diplomacy has evolved over time.
While it is obvious that thriving markets and global security go hand in hand, along with America's central role in both arenas, often our diplomacy and institutions do not reflect this reality. In other words, the channels of influence that America could once rely on -- large, multinational consortia of first-world powers -- are waning in power. If one thing is clear to ambassadors around the world, it's that U.S. diplomacy needs a jumpstart into the 21st century.
The key for American diplomacy is not doubling down on its great-power past, but harnessing the future on the ground. The enthusiasm and entrepreneurial spirit that became infectious in the "Arab Spring" countries will remain the norm. Young people are tapping into the culture of innovation, even amidst the political difficulties and a lack of access to money and resources. In turn, effective, pragmatic partnerships based on shared objectives -- economic growth, stability and more -- will be the engine for increased security and prosperity. This is the future of diplomacy, not just at the U.S. State Department -- but worldwide.
On The Ground
While terms such as "Economic Statecraft," "Global Engagement," and "Strategic Partnerships" have come into fashion in Washington, the tangible impact of these buzzwords is difficult to measure. Ironically, some of the most challenging places for U.S. foreign policy represent some of the greatest opportunities for these new approaches in 21-century statecraft.
The key is to create and empower stable business conditions in unstable places through private-sector leadership.
The intersection of public and private sectors has now blurred the lines in diplomacy. Today, our diplomats are beginning to understand that public-private partnerships can get the most out of available resources, technology, knowledge, and networks. In fact, these partnerships might be the most effective foreign policy tool America has at its disposal today.
Take Israel and Palestine, where U.S. Secretary of State John Kerry is pushing towards a final diplomatic peace between the Israelis and Palestinians. Last year, I visited the Palestinian Territories to support an event called "Celebration of Innovation," a locally organized business development and investor pitch competition. Essentially the State Department's own prototype of Shark Tank, fifteen young Palestinian entrepreneurs were selected from hundreds of applicants to compete for the chance to present their ideas to an international audience. The two winners, Alaa -- a 24-year-old from the Gaza Strip who had never left his home before winning the chance to pitch his business -- and Aya, the first Palestinian woman to own and raise sheep from Nabulus, are representative of a global change. If one thing became clear, it was that the next generation doesn't want charity; they want a chance.
Working with the best and brightest that this troubled region had to offer, their ingenuity -- especially limited money and shaky security--is impressive. While observing the number of Palestinian businessmen and entrepreneurs that had succeeded throughout the Arab world, despite the odds, a Palestinian professor commented to me that, "Diamonds are created under pressure, therefore it is only natural that Palestinians entrepreneurs are like diamonds within this region."
Alaa beamed with pride as he presented his business idea of creating miniature furniture for densely packed living conditions, like those in cramped New York studios, that he invented to deal with the overcrowded apartment in Gaza that his family lived in. Aya, short and covered in a traditional head-scarf, electrified the crowd with her energy as she pitched her idea of raising organic sheep to be locally sourced, given restrictions faced in the West Bank of imports from neighboring countries. In a packed room that was being broadcast live on television, both of these young entrepreneurs won grants to further develop their businesses.The amount of these micro-investments were negligible when balanced against the international aid and development budgets that the U.S. lends to their homeland. But the impact of empowering these young leaders -- and the jobs they create -- will be felt long beyond the legacy of the political leaders that today dictate the terms of the ongoing peace process. Cities like Richmond and Chicago have seen a link between creating jobs and lowering crime; Gaza and Nabulus are no different.
Changing Global Dynamics
The international system, which until the 1990s saw power disproportionally concentrated in North America and Europe, has since witnessed a dramatic change in distribution to other players -- mostly in Asia and South America. To understand why 20th-century diplomacy needs an upgrade, it's worth a look at the recent changes on the global stage.
Brazil, once a poster-child for income inequality, has enjoyed its economic renaissance following a prolonged lull. Indonesia, although still manacled by corruption, has evolved from an insular military dictatorship into a politically stable democracy with a promising economy. India has gone from an aid-dependent regional power to a hotbed of entrepreneurship, with its economy more than doubling in size between 2002 and 2008.
In that same period, Turkey's economy has more than tripled, accompanied by a strong sense of identity and a brash self-confidence. Last, but certainly not least, is the dramatic rise of China, which in 1990 had a gross domestic product per capita less than India's, but is today almost four times as wealthy. Yet with each of these economic successes comes development challenges, as played out recently in the streets of Brazil and Turkey through protest movements, not to mention the ongoing tumult playing out throughout the Arab world.
This so-called "rise of the rest" presents the United States with a decision. On the one hand, it could incorporate these new players into established systems of global governance, more accurately reflecting the distribution of international power and strengthen international cooperative mechanisms. On the other hand, if the West were to continue to resist or deny these new global players a place at the high table, there is a strong likelihood that the entire global system -- which the West created and carefully nurtured over the past half century for its benefit, and that of others -- may be jeopardized.
Diplomacy Goes Private
Interestingly, some of the most innovative work in this field is happening where you may least expect it: the U.S. government. To do more with less, the Obama Administration has pursued creative ideas like challenge prizes and multi-sector partnerships, developing new funding models including pay-for-success and social impact bonds, and using the bully pulpit to spotlight far-sighted investors focused on sustainability and social impact.
Faced with constricting budgets, government executives have found smarter ways to make government capital more catalytic. By taking on a mentality that everyone stands to gain by collaborating, they leveraged resources by blending public grants and guarantees with private investments, effectively making the sum greater than the individual parts.
But diplomacy can no longer be done by government leaders alone. Private-sector leaders must be an integral part of foreign policy. Creating spaces for public- and private-sector leaders to collaborate at international summits like those for the G-20 and UN General Assembly is a first step. This would help orchestrate partnership opportunities for businesses and governments, and in turn stimulate long-term economic growth -- just like we saw in Europe following the Marshall Plan.
Expanding this model, with the help of America's multinational companies, includes seeking advice and collaboration, rather than trying to simply direct the private sector from Washington. The best way to capitalize on the overlapping interests between various sectors is to designate senior-level responsibility for that task, completely tied to core business and intently focused on unlocking new markets in partnership with governments. Efforts such as the UN's Global Education First Initiatives or the State Department's Global Partnership Initiative that coordinates with some of the largest private sector companies are the way of the future.
For the private sector, investing in diplomacy isn't just charity -- it's an opportunity. Take tech giant Hewlett-Packard, which has provided business skills training to young entrepreneurs in 49 countries through its HP LIFE program. And throughout the Middle East and North Africa, Cisco, Google, Intel, and Microsoft -- to name just a few American companies -- are investing in similar ways using a combination of low-tech (like face-to-face training from local experts) and high-tech (like web-based learning) solutions. These are models of public-private training programs that will give our next generation of engineers, designers and business professionals a lift. What's more, these programs aren't only philanthropic -- you can bet that these companies are also looking for talented future employees.
As the young Palestinian entrepreneurs taught me, and as former Secretary of State Hillary Clinton often remarked, talent is universal -- but opportunity is not. The more opportunity we can provide for the private sector globally and for a very talented next generation, the more successful U.S. foreign policy will be. Rather than bemoaning the effects of sequestration and the rise of non-state actors on U.S. foreign policymaking, proactively adjusting U.S. diplomacy to include the private sector in these new realities is our best bet moving forward.
Originally posted in the Diplomat