Sri Lanka’s nation brand value rises to $ 73.9 b in Brand Finance’s global survey

The 2016 Nation Brand Report released by Brand Finance in London on Tuesday has established that Sri Lanka has moved up in its position relative to last year, by strengthening all of its measurable indicators. Sri Lanka is now ranked 55 having moved two places up from last year’s 57th position, with a brand value of $ 73.9 billion, an increase of 9%. 

The global report which is available on the Brand Finance website (www.brandfinance.com) provides a comprehensive analysis on the world’s leading nation brands and the impact that a country’s reputation and image has on stakeholders and investors. The analysis combines a wide range of measurable economic, demographic, and political factors, and is based on in-depth research. 

The BrandFinance Nation Brands measures the value and strength of the nation brands of 100 leading countries using a method based on the royalty relief mechanism that Brand Finance uses to value brands. 

Each nation brand has also been accorded a brand rating, which is a benchmarking study of the strength, risk and future value creating potential of the brand, much like a credit rating. Sri Lanka’s brand rating which was at A+ last year has been upgraded to AA- in the current years ranking.

This can be primarily attributed to the reforms and governance changes that were undertaken following the change of Government in January 2015. This saw an increase in the country’s performance across all the measurable indicators such as society (corruption, judicial system, security, quality of life, etc.), investment (governance, taxation, infrastructure, ease of doing business, talent, etc.) and goods and services (trade rules, government policy, tourism, etc.).    

Because of the scale of its economy being so large, brand USA dominated the list at the top of the value table, followed by China, Germany, Japan and UK. However on the brand strength indicator Singapore emerges as the strongest nation brand. 

An understanding of what drives strong nation brands is worth noting for Sri Lanka in the context of the challenges the country faces in attracting more FDIs. 

In the case of Singapore, the intolerance of corruption combined with a highly efficient public service that has comparative wages with the private sector discouraging graft, makes it the ‘cleanest’ country in Asia according to the Corruption Perceptions Index. Heavy taxes on cars control congestion but is compensated by the development of a superb public transportation system. Finally, a high quality education system based in English makes Singapore a very easy place for multinational companies to use it as a base and operate in. 

With such governmental competence, Singapore’s international reputation has spread by word of mouth which is the key driver of a country’s reputation. Sri Lanka should take a leaf out of this approach and focus on its internal workings and efficiencies rather than resort to expensive public relations exercises in order to paper over the deficiencies that needs to be sorely addressed.

Brand Finance CEO David Haigh commented: “A strong brand has become a defining feature of success in the current economic climate. Worldwide hyper competition for business, combined with an increasingly cluttered media environment, means that a clear message carried by a properly managed brand can provide the crucial leverage needed to thrive. Nations can adopt similar techniques to capitalise on the economic growth that comes with proper positioning of a nation brand. Brand Finance estimates that strong nation branding can add between 1% and 3% to GNP. In the current economic environment no sensible government can afford to ignore branding as an instrument of economic policy.”

Brand Finance Lanka’s Managing Director Ruchi Gunewardene commented: “Whilst it is indeed good to note the continuing strong performance of the Sri Lanka brand, it is critical that those stakeholders who are involved in influencing and moulding it understand how they should be actively managing it, to create even more value in the future. Good governance is at the very heart of building the base of a nation’s reputation, and unless our Government can live by this, it is not something that should be embarked upon lightly.”

Brand Finance uses a combination of government statistics, consensus forecasts, and analyst projections to quantify the variables that lead to creating the brand rating and brand value using sources from the World Economic Forum, Bloomberg and the IMD World Competitiveness Report.