Navigating economic sovereignty of small nations

The relationship between larger influential nations and their smaller neighbouring counterparts has historically involved a careful balance of power and independence. Both economically and politically, larger countries often wield considerable sway over their smaller neighbours, potentially undermining their ability to make autonomous decisions. In recent times, smaller nations have been devising strategies to mitigate the impact of their larger neighbours and assert their own independence. This article delves into different approaches that smaller neighbouring countries can utilise to diminish the influence of larger and more dominant nations.
Economic sovereignty encompasses a nation's capacity to manage its economic policies, resources, and development paths without being unduly influenced from outside forces. For smaller countries, safeguarding this sovereignty is vital for ensuring that their national interests take precedence and that their economic progress is sustainable and inclusive.
The influence of more powerful neighbours on smaller countries can be multifaceted. This influence spans across various domains, including economic, political, and cultural aspects. Notably, smaller countries often depend on their larger neighbours for trade, investment, and even labour, creating vulnerabilities should their more dominant neighbours choose to use economic leverage. Additionally, larger countries can exert control over the economic policies of smaller nations through various means like controlling energy supplies, trade routes, and financial markets. Furthermore, smaller countries may struggle to compete in the global market due to their size, resources, and market access constraints. Political conflicts or disagreements with larger neighbours can also result in economic sanctions or other punitive actions. In addition, the cultural landscape of smaller countries can be influenced and manipulated by more powerful neighbours.
There are global instances of successful countries that have managed to uphold their economic sovereignty despite having influential neighbours. Singapore serves as a prime example of a small nation that has effectively preserved its economic sovereignty despite being in close proximity to larger neighbours. Through strategic planning, economic diversification, and a focus on innovation and technology, Singapore has emerged as a global economic hub. Similarly, New Zealand has actively endeavoured to broaden its trade partnerships beyond its powerful neighbour, Australia. By engaging in free trade agreements with nations like China and the EU, New Zealand has expanded its market access and reduced its economic dependence. Despite its small size and its location in a geopolitically sensitive region, Qatar has utilised its natural gas reserves, sovereign wealth fund, and strategic investments in international sports and culture to assert its economic sovereignty.
Drawing from general concerns and global experiences, certain strategic measures can be highly effective.
Diversifying trade partners is one of the most impactful strategies for reducing reliance on a larger neighbour. Small nations can expand their economic ties by engaging with a variety of countries and regions, thereby lessening their susceptibility to economic pressures or sanctions from any single nation. This diversification can be achieved through regional trade pacts, bilateral trade agreements, and participation in international economic conferences.
Besides, developing niche markets and industries can also prove effective. By concentrating on niche markets where they have a comparative advantage, small countries can become indispensable in specific global supply chains. For example, countries like Singapore have specialised in high-tech industries and financial services. Additionally, investing in research and development can enable small countries to remain competitive and reduce dependence on larger neighbours. Supporting local industries, such as agriculture, manufacturing, and technology, can also diminish a country's reliance on imports and foreign markets, making them more self-reliant and less susceptible to economic manipulation by larger neighbours. Encouraging entrepreneurship and innovation within the country can also foster economic resilience.
Moreover, forming alliances with other small and medium-sized countries in the region can offer collective strength to counterbalance the influence of a larger neighbour. Regional organisations, like the Association of Southeast Asian Nations (ASEAN), the African Union (AU), and the Caribbean Community (CARICOM) play a vital role in promoting cooperation and unity among member states. These partnerships can serve as platforms for diplomatic dialogue and collective action.
Furthermore, small countries can leverage their membership in international organisations, such as the United Nations, the World Trade Organisation, and the International Monetary Fund to advocate for their interests and gain support from the global community. Active participation in these organisations can help small countries bring attention to their challenges and seek assistance in addressing external pressures.
Apart from other measures, enhancing military and security capabilities is crucial. While small countries may not match the military capabilities of larger neighbours, they can invest in their strategic defence capabilities to deter potential aggression. This investment can involve modernising armed forces, bolstering cyber defence systems, and improving intelligence capabilities. A credible defence posture can act as a deterrent to coercive actions from larger neighbours.
Importantly, small countries can also enhance their security by forming partnerships with other countries that share their concerns. These partnerships can take the form of defence cooperation agreements, joint military exercises, and intelligence-sharing arrangements. Through collaboration, small countries can enhance their collective security and reduce their vulnerability to external threats.
In addition, small countries can work towards mitigating imbalances by promoting cultural and soft power initiatives. Strengthening national identity and cultural heritage can assist small countries in preserving their autonomy and resisting external influences. By instilling pride in their history, language, and traditions, small countries can foster a sense of unity and resilience among their citizens. This cultural fortitude can act as a counterweight to the cultural impact of larger neighbouring nations.
Small countries can utilise soft power to bolster their global influence and counteract the predominance of larger neighbours. This can be achieved through cultural diplomacy, educational exchanges, and international development endeavours. By portraying a positive image on the global platform, small countries can cultivate goodwill and garner support from the international community.
Devising a clear and coherent foreign policy framework can aid small countries in managing their relationships with larger neighbours. This framework should delineate the country's priorities, interests, and boundaries when engaging with external entities. By having a well-defined foreign policy, small countries can interact with larger neighbours on their own terms and avoid being pressured into unfavourable agreements.
Considering Bangladesh's geographical location, the country could consider focusing on specific measures to uphold its economic sovereignty. Establishing a robust regulatory environment is crucial to shield the economy from external pressures. Emphasis should be placed on implementing regulations that prevent unfair trade practices and safeguard local industries from dumping or subsidised imports. It is also imperative to ensure that foreign investments do not jeopardise national security or exert undue influence over key sectors.
Additionally, developing the capacity to withstand external economic upheavals is vital for economic independence. Bangladesh should implement measures to lessen the impact of global economic fluctuations, natural disasters, and other external factors. Diversifying the economy across different sectors can reduce susceptibility to shocks specific to particular sectors.
Bangladesh should also prioritise effective regional cooperation, as it can furnish small countries with collective bargaining power. Engaging actively in regional trade pacts such as the South Asian Free Trade Area (SAFTA) and the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) can unlock new prospects for trade and investment. Additionally, enhancing collaboration with the Association of Southeast Asian Nations (ASEAN) is essential. Participating in regional economic organisations can provide access to larger markets and bolster negotiation leverage. Alongside the partnership, investing in strategic infrastructure projects that improve connectivity, reduce transportation costs, and enhance market access is crucial for Bangladesh's economic sovereignty. Additionally, it is vital to ensure a stable and reliable energy supply through investments in renewable energy sources and energy-efficient technologies to support industrial growth.
Moreover, it is very important to engage in diplomatic dialogue with India and neighbouring countries for maintaining economic sovereignty, and Bangladesh should use diplomatic channels to address trade imbalances, negotiate favourable terms, and resolve disputes amicably. Furthermore, forging alliances with like-minded countries and international organisations can provide support and enhance negotiating power.
Addressing the complex challenge of reducing the influence of large and powerful countries on small neighbouring countries requires adopting a comprehensive strategy. This strategy should encompass economic diversification, political alliances, military preparedness, cultural initiatives, and legal measures to enhance autonomy and assert sovereignty for small countries. These strategies not only empower small countries to navigate geopolitical challenges but also contribute to a more balanced and equitable international order.

Dr. Mohammad Kamrul Hasan is a public administration researcher and practitioner.
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