Political Instrument

According to Joseph Frankle, national policy (NP) is the concept in foreign policy (FP). The objective sought in the FP of nations can be can be categorized as self preservation, security, well being, prestige, ideology and power. The priority in attaining them may defer to the needs, aspirations and capability in achieving them.

In trying to achieve this objective, states uses various instruments to influence others to alter their ideas, actions and behaviour in favour of them. Since not all states are self sufficient, they require access to resources and markets for their domestic economic well being. Resources may be raw materials, technical and finances not available domestically for economic activities, while market maybe for export of commodities or manufactured products.

The dependence of states on foreign resources and markets has resulted in the manipulation of economic relations for purely economic or political purposes. Therefore economic instruments can be used by states to seek to change idea, actions, attitudes and behaviour of target states.

Techniques

No one country is self sufficients. Each nation depends on other nations for resources and market. Developed nation like Japan and Britain too could not produce enough food for their population and rely on import to supplement domestic production. Most industrialisation nations require fuel for their industries which needs to be imported. Most developing nation which rely on commodity exports for their income need to sell their products to other countries. On the otherhand a number of under developed nations require foreign aid to survive.

Base on economic relations, there are various forms of economic techniques used by nations to pursue their objectives, either economic, political or for other purpose. Some of the techniques are:

Tariffs

Are taxes imposed on import products. It’s purpose is to raise revenue and protect local products from foreign competition. These are basically for economic purpose but can also be used for political purpose. A nation which rely on export to a single country is vulnerable to tariff manipulation.

1. Quotas. Are maximum quantities allowed for certain nations to sell their goods to the imposing nation for a period of time. Nations rely heavily on commodity export to a single country may face difficulties if quota for the sale it’s goods are reduced significantly.
2. Boycott. Is organized by a government to prevent import of certain goods. If is organized against a country, the boycott may cover the whole range of goods sold by the target country.
3. Embargo. Is used to prevent flow of goods to target nations. The goods may be on specific categories such as strategic materials or a whole range of goods if total economic embargo is enforced.
4. Loans, Credits, and Currency Manipulations. Nation may grant loans to other countries to assist development. Credit may be extended to other nations for imports from the creditor nation.
5. Blacklist. Is used against countries or firms that are doing business with a target country. Most Arab governments have maintained blacklist against foreign firms doing business with Israel. The country or firm involve may have their goods boycotted and may include both import and export goods.
6. Licensing. It is used to control flow of specific goods. Import or export licensing are granted or denied for specific goods. This done to monitor flow of goods e.g. uranium which is used to develop nuclear weapons.
7. Freezing Assets. It is done to the target nation so that such assets cannot be assessed and used by the target nation. Money for e.g. kept in foreign banks can be frozen indefinitely until target nation submits to certain requirement.
8. Expropriation. Is the nationalization of assets belonging to foreign companies. Instead of freezing the assets, nations may choose to seize them.
9. Granting or Suspending Aid, Including Military Sales or Grants. Technical assistance, grants and commodity import programs development loans and emergency humanitarian assistance is 4 categories of bilateral aid program. Normally granted to help recipient nations to develop domestically.
10. Dues to international Organization. A nation may without dues to international organization to influence the actions and practices. A nation, which contributes substantially, may be able to influence favorable action and practices.
11. Pre-emptive Buying. Is used to deny access of certain goods by a target nation. Aimed at disrupting the target nation use of goods for unfavorable activities such as raw materials for war industry.
12. Trade Agreement. Is either bilateral or multilateral agreement such as APEC. It is used as a platform for exchange of economic advancement for political rewards. Invitation to joint is extended in persuasion for political cooperation. Some states drop political non-alignment to reap economic reward.
13. Offset Program. Develop nation with enough funds, purchase capital equipment to implement programs to acquire technical and foreign investment for economic development. Company signing contracts for supplies of capital equipment are require to either transfer of technology or invest in local projects.

Implementation

1. Influential economic nations may resort to economic pressure to get what they want. This pressure may take various forms depending on the economic relation between the nations and their target nations. Whatever forms it uses, the impact is directed at the people of the target nation. There are two types of economic instrument used. Coercive and persuasive. In most cases these two categories or techniques are used for political purpose rather than economic.
2. Economic Coercive. Is characterized by its threat of economic deprivation or impoverishment to target nations unless it submits to a certain requirement. The method is used to disrupt economic activities of the target states. The use of all the techniques above e.g. tariff, currency control etc is intended to coerce target states to change their behavior and attitudes. In a severe nature, economic embargo and total boycott are aimed at outright deprivation by cutting off flow of goods in and out of target states.

In the ethnic conflict in Bosnia, the UN imposed restriction of arms sale to the country. However, assistance by Serbia to the ethnic Serb had caused an imbalance in the weapon and equipment of the belligerents. To force the Serbian Government to stop assisting the ethnic Serbs, The UN sanctioned trade embargo on Serbia. The difficulties faced by the Serbian population had resulted in the pressure to the government to stop assisting the ethnic Serbs.