Consulates Belong to Yesterday’s Diplomacy

BERKELEY â€”  Last week, following appeals from Gov. Pete Wilson and several California companies with interests in South Africa, Pretoria canceled plans to close its consulate in Beverly Hills as part of a worldwide budget-cutting operation. Pulling out of California just when the state is establishing itself as the new economic and cultural center of the United States would have been a mistake. But South Africans and Californians also will be making a mistake if they fail to use this opportunity to rethink how to best develop the strategies and institutions that can stimulate and sustain the new kinds of global connections that both will need to prosper in the 21st century.

Like a growing number of other traditional diplomatic institutions, the Beverly Hills consulate, which briefly gained notoriety during the apartheid era as a haven for money laundering in the movie “Lethal Weapon,� is an expensive anachronism. Over the past three decades, the character and content of international relations have changed dramatically. Globalization has eroded national governments’ ability to regulate domestic economic activity. Nonstate actors, transnational corporations, nongovernmental organizations (NGOs), universities and state and local governments are involved in global affairs. But national governments remain committed to embassies and consulates as the principal channels of relations.

This tradition rests on two flawed assumptions: 1) that the officials who staff these offices represent their country’s “national interest,� which is separate and above the many “particular� interests of nonstate actors; and 2) that these officials are in the best position to facilitate and/or manage relations. But to speak of national interests in U.S.-South African relations, for example, grossly simplifies the complex mix of interests, impulses and values that shape bilateral ties between the two countries. Even at the height of antiapartheid activism here, the number of Americans who believed that U.S. national interests were at stake in South Africa was very small. Today, that number is even smaller.

Nonetheless, as evidenced by the response to the announcement that the consulate would close, a significant number of individuals, companies and institutions in California remain interested in South Africa for business, professional and personal reasons. If South Africa realizes its economic and industrial potential, this number will grow. The interests of South Africans in the United States are as diverse and fragmented.

In both countries, global interests are highly regionalized and sectoral. For example, the interests of U.S. metropolitan regions in South Africa vary according to the racial composition of their populations, the structure of their business communities and the nature of their local nongovernmental sectors. Similarly, the South African province of Gauteng has interests in developing international connections, growing out of its position as the country’s financial capital and industrial heartland, that differ from those of the Western Cape, with its emphasis on wine growing and tourism, or the mainly agricultural Orange Free State. Given these realities, the goal ought to be to create strategies and institutions that would help such regions connect with one another.

By their very nature, however, consulates are not well-suited to foster these connections. They are mostly staffed by career Foreign Service officers who view a consulate posting as a way station on the road to more important national positions. Few have worked in business or civil society, or have expertise in fields like urban planning, the hot topic among metropolitan regions with global ambitions. Finally, as national representatives, they must be careful not to favor, or even appear to favor, particular businesses or regions, lest they create a political imbroglio at home.

The inability of national institutions to serve local and regional needs fully is one reason why many cities and states are developing their own foreign economic policies and creating the institutional structures to carry them out. By the mid-1990s, there were more than 150 state offices in foreign countries. California, which has been one of the leaders in trade promotion, has an Export Finance Office, a State World Trade Commission, an Office of Foreign Investment, an Office of Export Development and foreign offices in London, Frankfurt, Jerusalem, Hong Kong, Tokyo, Taipei, Mexico City and Johannesburg. Many metropolitan areas, including Southern California and the Bay Area, have established their own export-promotion agencies.

Most of this expansion has occurred in a strategic and societal vacuum. Officials, often with little experience in international economic affairs, chant trade-promotion slogans without knowing how trade will serve their broader community-development goals or how to ensure that international activities and agreements translate into lasting, mutually beneficial economic relationships. This is often the central weakness of trade missions.

The costs of poor foreign economic policymaking by state and local agencies can be high. It can lead to a significant waste of time and money and can erode public support for regional efforts to develop broader global economic connections. The best way to remedy these problems is to take a concrete case and attempt to develop an effective model. California’s relationship with South Africa would be a good place to start. Five steps need to be taken:

* State and metropolitan leaders, from both public and private sectors, should use the likely restructuring of the Beverly Hills consulate to begin a series of dialogues with their South African counterparts. These should focus on identifying potential areas of mutual benefit and developing long-term regional connections, rather than merely promoting trade or investment. Trade is no longer a simple matter of selling goods to foreign buyers according to the principle of comparative advantage. Instead, it is one element in a set of economic relationships reflecting changing patterns of production and tastes, inter- and intrafirm relationships, social networks, governmental policy and other factors.

* Californians and South Africans should work together to create institutional supplements to traditional diplomatic institutions. These could take several forms. One possibility would be university-based centers linked to metropolitan-planning programs, professional schools and country specialists. Such centers could serve as think tanks for state and local foreign policymaking. Another possibility would be the creation of “virtual consulates,� strategically designed websites that would provide the kinds of in-depth, up-to-date information and, more important, channels of communication necessary to nurture and sustain long-distance relationships.

* The next governor should broaden the mandate of the California office in Johannesburg beyond trade promotion to include joint economic development broadly defined. He should take steps to ensure that it is much more closely linked to universities, regional economic development groups and other institutions with existing--or prospective--interests in South Africa.

* The South African government should select as its next consul general in California someone who has the experience, ability and desire to facilitate broad-ranging relationships between the various sectors of South African society and California--and give her or him the mandate to do so.

* Finally, these steps ought to be accompanied by a joint initiative addressing the problem of information-age inequality. As two places where the gap between cyber-�haves� and cyber-�have-nots� is most obvious, California and South Africa have a shared interest in meeting this challenge and linking such an initiative to a broader effort to expand bilateral economic connections. This could help reverse the political damage that has been done by mere trade promotion.*