Thursday Nov 14, 2024
Thursday Nov 14, 2024
Tuesday, 25 October 2016 00:10 - - {{hitsCtrl.values.hits}}
Latest research reveals that a country’s image has a positive correlation on inward investment, adding value to exports of a country and attracting quality tourists whilst having a positive impact on skilled migrants.
Whilst China remains a super power for economic growth, the reality is that the US attracted the best FDIs in 2016 due to the strong imagery that exists in the marketplace. In fact it is the number one and most powerful brand at 20.5 trillion dollars.
Whilst IMF stipulations are hurtful, if implemented properly it drives up brand value
Believe it or not Pakistan is the trailblazing nation that has grown its brand value from a mere 93 billion in 2015 to 128 billion dollars in 2016, at 38%, which is rooted to the deep cutting-edge reforms at play.
The country is implementing the IMF reforms though it is hurting the people which is a key pick up to Sri Lanka in my view. Sadly the other issues on governance and the workings of a political economy is marring this vision in Sri Lanka.
For Pakistan, the lower oil prices and improving security situation despite the issue with India on Kashmir is working for the country. The banning of Indian films over the week end would have an impact but the fact of the matter is that reforms drive up brand value given that a country becomes marketing oriented.
Whilst Sri Lanka is becoming strongly linked to the world post 8 January 2015, it’s also important to understand the reality of the country from a global image perspective. As per Brand Finance, Sri Lanka as a nation is valued at 74 billion dollars and ranked 55 globally up from the 76 ranking way back in 2011. In South Asia it is at number four as against powerful brands like India at $ 2066 with a rating of A+.
The report states that even though Sri Lanka is registering a position of economic growth, the problem is that it is very weak on the area of brand equity. This can be defined as the rating for the reputation of a country as a society, rather than an economy. In other words it is the political and social reputation of the country globally. Hopefully with the IMF reforms coming into play this will get addressed.
A point to note is that Sri Lanka has grown 221% on brand value since 2011, but if we benchmark against Bangladesh which was considered a lower performance country 10 years back, it has beaten us to register a 261% growth and a commanding 170 billion dollar economy.
This is very sad given that we were the blue-eyed country to the great Lee Kuan Yew way back in 1960. The reforms done by Bangladesh on the export front is a lesson for Sri Lanka that we are yet grappling to take control of. Sri Lanka on the export front is more a supplies issue than demand driven which is very clear from the economic report of Q2 2016 that was released.
Whilst we can focus on the external view of the country given the thrust by the Prime Minister in Brussels on the GSP+ front and the push on the EU not forgetting Japan and New Zealand supporting Sri Lanka now, the key focus issue is the economic war.
Inflation in August 2016 was 4.5% and in September 4.7%. The contribution to the inflation from food groups and non-food groups was 2.1% and 2.7% respectively and the Department released the NCPI for the month of September 2016 that was calculated at 113.5. The increased price of foods such as banana, papaya, lime, onions, rice, coconut, mango, chicken, Mysore lentils, pineapple, peas and dried sprats has mainly affected. The lower production output due to the drought and floods in the past quarter resulted in a low GDP growth of 2.6%. I guess the country must unite to beat the 4% GDP barrier in the next two quartets if not one can term us as a country in recession. I am sure we can achieve the 5% GDP is the vibe in the marketplace provided the PPP model of development is pursued.
One can argue that in a country that is on a development drive globally, especially post a war, there can be a drag on the reputation of the country on the aspect of ‘governance’ especially when the US Secretary General has equated Sri Lanka to countries that have allegedly committed serious war crimes. This was a bit harsh in my view but it is the reality from the chief of the global government – the UN. Hence we will have to address the governance issues addressed in the UN report though not palatable.
Even after two years Sri Lanka has failed to position the country on the tourism front even after a massive 340% growth in arrivals to 2.2 million expected in 2016, which is very sad. The logic being countries like Philippines and Indonesia having corrected the global image are attracting the $250+ tourists from the global market while Sri Lanka is yet at below 160. In fact right now it is 109 for Sri Lanka.
One of the recommendations from Brand Finance is that a country must identify the weaknesses and correct them with focused brand strategies, with which I agree, like the ‘Wonder of Asia’ tourism promotion or the ‘ethically right’ manufacturing destination as claimed by the apparel industry or the ‘1st Ozone Friendly’ proposition by the tea industry. But there is an issue.
The Nation Brand Policy expert and advisor to many governments globally, Simon Anholt advocates from his experience that manipulating the imagery with strong marketing techniques does not help build a strong nation brand. Reputation must be earned over time by the actions that governments implement and people inside the country emanate to the world, which is the exact problem in Sri Lanka.
Even today we see many governance issues that have made it to viral media that is globally accessible – the CBSL bond issue, the resignation of the Bribery Commission DG and the many other arrests that are made of high profile individuals from the earlier regime which affect brand imagery globally even though as a policy we must do these course corrections.
Whilst advocating strong campaigns on tourism and tea, Simon Anholt goes on to say that building brand imagery with diplomacy and marketing campaigns are a waste of taxpayers’ money and must not be done. His logic is that a product sells a promise and hence advertising will help communicate this promise and make the consumer surrender some money to purchase the product (brand).
But, in the case of a country, it is different as with the advertising you are asking someone to ‘change the way they think towards a country’. This cannot be done via sexy advertising. You have to get people to experience the change with actions. On this front the continuous demonstrations we see in Colombo do not augur well for the country. In fact a typical demonstration costs the country Rs. 100 million is the latest research from the think tanks.
Countries like Singapore and Malaysia have shown the world that image can be corrected if it is channelled from the Central Government, not by way of brand marketing but by actions that have earned the respect of the people in the country which has garnered a positive image globally.
Malaysia in particular realised that first impressions count. Many people globally purchase brands by first understanding from where the brand originated. Malaysia also realised that to attract the top end tourist into the country, one must have a strong reputation globally which is conducive. If not, a country cannot garner the best return for the assets they possess.
We must understand that countries are judged by what their citizens say about their governments. It has to be an unbroken stream of dramatic actions that make the reputation of a country. It has to be earned over time and cannot be constructed with marketing strategies or media releases.
Let’s accept it, as a nation that we are responsible for the image we create for the country. Correction of the image of the country has to be earned with actions so that a reputation can be attributed to the country. We will have to manage democracy as the weekly protest demonstration is hitting global media and it hurts the overall nation brand imagery.
Whilst we focus on becoming a $ 100 billion dollar economy, we must also make Brand Sri Lanka strong. As at now it’s worth only $ 74 billion.
