December 7th, 2013

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The Foreign Ministry is struggling to find a way to cut its expenses by almost 200 million kroner over the next five years. The most likely scenario is that they will close embassies and consulates in a number of countries worldwide.

As a director in an organisation that represents businesses, I am no stranger to the constant need to become more efficient and to improve the way an organisation is run. This is something that modern, competitive businesses have to deal with each and every day. But, that said, we feel it is important to point out that in the eyes of businesses, there are no unnecessary embassies.

No matter which embassy or other official diplomatic mission you choose to close, it will have consequences for exports and companies’ development potential in that particular market.

For the past three months, the Confederation of Danish Industry (DI) together with other business interest groups and experts have taken part in discussions aimed at coming up with recommendations for how the Foreign Ministry can save money.

These discussions have followed a set of guidelines that assume that the savings are to be found by closing embassies and consulates. The question we have been asked to address is which ones should be closed down.

Due to this situation I feel a strong need to state clearly that closing embassies will have consequences. Denmark is a small, open economy, and about 750,000 jobs are tied to exports. If we want to maintain our standard of living, we need to give our companies the opportunity to become more international in the short and long term. This is one area in which embassies serve as an important partner providing a number of vital services.

More than just a business partner
Embassies issue visas to new clients seeking to come to Denmark to learn more about the businesses they hope to work with. Embassies provide consultancy to small and medium-sized businesses seeking to establish themselves in a market, and embassies can advise firms about which rules and regulations they need to abide by.

Practical help like this can spell the difference between profit and loss for a firm entering a new market. But, embassies are also important in other ways: firstly they have symbolic value, and secondly they have an established network that firms can tap into.

Last, but not least, embassies provide services for more than just businesses. Individual Danes rely on them, and they play a key role in establishing diplomatic ties and goodwill between Denmark and their host countries.

The government needs to decide whether it wants to cut the Foreign Ministry’s budget by 200 million kroner and accept the consequences it will have on foreign policy, diplomacy and exports. If the government insists on making the cuts, we urge the Foreign Ministry to do whatever it can to cut costs in other areas before turning to embassy closings.

If they still go ahead with the decision to close embassies and consulates, they shouldn’t be surprised by the consequences it will have for Danish exports and presence in the affected countries.

The author is the deputy director general of Dansk Industri (the Confederation of Danish Industry). Originally published in Jyllands-Posten.