Friday Nov 15, 2024
Friday Nov 15, 2024
Tuesday, 28 June 2016 00:02 - - {{hitsCtrl.values.hits}}
When Britain went to vote on the referendum, little did the world realise that in the event it went the other way, there would have been shock waves globally – and that’s exactly what happened.
Just overnight the hit in global equity markets was $ 2.1 trillion, which is almost equal to the GDP of UK, which is Euro2.4 trillion. Brexit will slow down economic activity not only in the UK but also globally and we have no option but to plan for a downturn of Sri Lankan exports to the UK.
Whilst we can move on a bilateral trade agreement on a PTA basis, the fact of the matter is that an exposure of $ 1 billion on Sri Lanka export proceeds or 10% of the total exports will be challenged. Given that the UK is a key market for Sri Lanka tourism too, the fall in currency will have an impact, with a holiday in Sri Lanka costing more. This will further put pressure on overall revenue receipts into Sri Lanka, which is already having a BOP issue.
Destination marketing is one route to building a strong ‘nation brand’
Competency or external
If I go back to the morning of 9 January 2015, when people were struggling to get a few hours’ sleep, many were elated with the results of the elections and the dramatic turnaround of events. Especially those in the Western Province, which accounts for almost half of the GDP of the country, were looking forward to a future of aggressive private sector development based on the principle of equality and outward-driven development agenda.
However, sentiments after one-and-a-half years are a mixed bag. The other day at a pre-budget proposal seminar, the top business drivers were asking if the private sector is the real engine of growth and if policymakers are serious about moving the agenda of economic development that was promised during election time. Some are even questioning if it is a competency issue or an external issue that is leading us to the challenges we see today. I guess time will reveal though the clock sure is ticking.
Tourism hotspot?
The hotspot that George Sores talked about, the ‘tourism’ sector, is also at crossroads with many properties up for sale and industry ROIs not justifying investment while many companies have not been able to develop a long-term strategy as the national strategy is yet in the making.
In this background we see some ‘best practices’ working in reality from tourism in Maldives, in Philippines on the platform ‘fun island’ and with Thailand and Malaysia trailblazing with strong marketing campaigns, setting the agenda for destination marketing strategies globally. While Sri Lanka is still grappling to just get a basic campaign off the ground, the best campaign we see on a typical nation brand building is ‘Brand USA’. Let me shed more light on this front.
Importance of building brand Sri Lanka
In this background and given the downgrade by many rating agencies on Sri Lanka, the echo among many is the need for a global brand building initiative. Experts in this area like Simon Anholt voice that “we cannot build an image around a country brand but we must live and build an image with actions”.
On this front what we saw at G7 meeting towards the Sri Lankan President was very positive. But we must now build on this with a focused nation brand building campaign which is holistic rather than the current CNBC initiative, which is an isolated project.
US – $ 16 trillion brand
Whilst the total EU GDP is at around Euro 17.4 trillion, including the UK GDP of Euro 2.4 trillion, Brand USA is valued at $ 16 trillion and ranked number one globally. Though the USA remained in its position of number one, given the strong 10 billion dollar presidential election that is been unleashed for the 2016 election campaign, we can see the strong share of media that brand USA is receiving digitally and on electronic media.
Some say the US elections tend to have such a residual effect that tourism numbers just shoot up; that includes domestic tourism 
that happens to the primary election trail.
US lesson to the world
Given the strong links that Sri Lanka has with the US, let me share one of the best practices globally on this area of nation brand building relating to the US. The strategy is played on five fronts.
1) Tourism
The USA is the second largest tourist arrivals nation in the world while France was the best in terms of attracting tourists and Spain and China followed in third and fourth positions. Even in the years like 2011 when the country was challenged with 9/11 and the overall global economy slumped, tourism arrivals grew by 3.8 % given the focused marketing campaign by the US Tourism Authority.
This is the power of focused brand marketing practicing the basics of segmentation, targeting and positioning a country – a basic that Sri Lanka is yet grappling to get a hand on even though it has been identified as an economic development hotspot.
2) Exports
The US is known as global competitive supplier of many goods and services required by a global consumer. Though GDP increased in the USA annually, the rate of growth is lower year by year, threatening the downrating of the economy and the brand equity. Exports of USA in 2015 reached $ 3 trillion while service itself reached $ 608 billion.
During the great recession, the subprime mortgage led to all banks being in crisis till 2010. Still the housing is in a deep slump, along with consumption, which represents 70% of the economy. In 2008 exports were $ 800 billion and President Obama’s 2010 January speech to the State of the Union referred to doubling exports over the next five years. However, it only rose to 12% in 2010 and 2011.
To double exports, it needs a 15% increase and the Brand USA campaign took the country to top place in the product segment, rising to first from eighth, which is the power of focused export promotion. This was driven by Brand USA having the highest growth in this segment, reaching 73 out of 100, which is the second front that the US chased after as a strategy.
3) Governance
The USA’s brand equity is largely affected with the continuous war initiated after the 11 September 2001 attack. Expenditure of one trillion dollars has been incurred during the post 9/11 war period for Iraq, Afghanistan and other countries like Libya and now the terror unleashed by ISIS.
However, with President Obama at the helm, brand USA has been strongly guarded on the area of ‘governance’ and as we speak now the US for sure has walked the talk on this hinge that has sure kept the tent right up there.
4) Culture
The nation of America consists of people who came from many different homelands. They are white, black or African, Indian, Alaskan, Hawaiian and Pacific Islanders belonging to six main races. It is indeed a variety of customs, traditions and foods while they do share many of the same values and their citizens care about individual freedom, equal opportunities and fair treatment of people regardless of differences relating to private ownership of property and education.
In the recent elections we see how candidates Trump and Clinton are focusing on the cultural nuances of each of these sub segments given the entrenched competition for votes. I guess this acknowledgement to each sub culture is what has led to the international popularity of American music as the true example of globalisation of culture. We see how Sri Lanka is making many attempts on this front but yet there is rumbling from the north.
5) People
Human development is about the real freedom of ordinary people to decide who to be, what to do, and how to live. The Human Development Index is continuously growing in the USA, which shows the nation’s sensitivity on people’s education, health and living standards. The literacy level of American is 99% in the case of both males and females. Total expenditure of $ 972 billion has been dedicated for education in both the private and Government sector. One of the best education systems in the world is implemented by the USA.
Sri Lanka is also very strong on this front though we have had some negative media on the 6% GDP allocation to this sector in the recent past. However, the development of demonstrations by university students being dispersed through water cannons does not augur well strictly from a nation brand building perspective.
Next steps for SL
Whilst we can see the importance of investing in brand Sri Lanka based on the case study above, one way out is to focus on a destination marketing campaign and then extended to working on the rest of the pillars as explained above when the time is right for Sri Lanka. I guess the time is right for action rather than just meetings and just announcements on media.
(The writer is a multiple award winning marketer and business leader. The thoughts expressed are his personal observations and not the views of any organisation he serves.)
