Checkbook diplomacy is a term used to describe the practice of using financial or economic incentives, such as aid or loans, as a tool for achieving foreign policy objectives. It involves the exchange of money or economic assistance in return for political favours, support or influence in international relations.
In essence, checkbook diplomacy involves the use of money as a means to achieve political or strategic goals, such as securing alliances, gaining access to resources or markets, or promoting ideological agendas. The term is often used in a negative sense, suggesting that such practices undermine the principles of transparency and fairness in international relations and can lead to corruption and dependency.
China’s Belt and Road Initiative: China’s massive infrastructure development programme, the Belt and Road Initiative, has been criticised as a form of checkbook diplomacy. The initiative involves large-scale investments in infrastructure projects in developing countries in Asia, Africa, and Europe, with the aim of building China’s influence and strategic partnerships in those regions.
US foreign aid: The USA provides foreign aid to many countries around the world, with the stated goal of promoting democracy, human rights, and economic development. However, some critics argue that the US uses foreign aid as a form of checkbook diplomacy, using it to secure support for its foreign policy objectives.
Saudi Arabia’s aid to Egypt: In 2013, after the ouster of Egyptian President Mohamed Morsi, Saudi Arabia pledged US$5 billion in aid to Egypt. Some analysts saw this as an example of checkbook diplomacy, with Saudi Arabia using its financial resources to gain influence in Egypt and counter the influence of Iran in the region.
Russia’s loan to Hungary: In 2014, Russia extended a US$10 billion loan to Hungary, a move seen by some as an attempt to gain influence in the EU and counter the influence of western countries.
Qatar’s investment in Turkey: In 2018, Qatar announced that it would invest US$15 billion in Turkey’s economy, following a diplomatic dispute between Turkey and the USA. Some analysts saw this as an example of checkbook diplomacy, with Qatar using its financial resources to support Turkey and gain influence in the region.