The ‘real’ problem with brand Sri Lanka

The latest data coming out predicts Sri Lanka’s economy to be 59 billion dollars with overall external trade recording a strong 51.6% of GDP as against the 44.4% the year before, which indicates the expansion of the economy. This data is reflective of Sri Lanka’s jump of 17 places to number 52 in the Global Competitiveness of Nations ranking by Work Economic Forum.

However, I was quite taken aback when Sri Lanka’s brand value reported by Brand Finance was just 23 billion dollars, with such strong equity drivers like tourism, Ceylon Tea and high quality apparel that reaches the millions of people around the world. This made me understand this subject better and the findings were staggering.

Sri Lanka $ 23 b

Brand Finance computes the brand value of a nation using the royalty relief mechanism using scores in three areas, namely infrastructure and efficiency, brand equity and economic performance.

On the first criteria, internet connectivity, education levels and skill level of workers are considered whilst on the last the factors considered are GDP growth and value of exports, etc., in which clearly Sri Lanka is way up on the game. Then the question is, where is the biggest issue?

Problem

The key issue reported was that Sri Lanka was weak on its brand equity ratings. How this hinge is defined is the reputation of the country as a society rather than an economy – in simple words, the image abroad. The report states that Sri Lanka’s political and social reputation poses a drag on the brand.

If one digs deeper, we see that even though India had many issues like the Anna Hazare fiasco on the anti corruption front, the brand equity has increased due to the ethos the country communicates to the world of being the largest democracy with free media and freedom to its people.

It’s strange how the world evaluates developments, but that is the reality and benchmark and we have to adjust to it.

Last evening a friend of mine called from Canada and he was very concerned about the status quo in Sri Lanka. When I inquired, the response was that the media and internet news of Sri Lanka on the Tangalle shooting and the Advanced Level results fiasco had dominated the Canadian news.

In his view, it was fuelled by the Diaspora which magnifies the happenings though in reality it is not such a burning issue.

But at the end of day, as the famous psychologist said, perception is reality. This is the challenge that Sri Lanka is now up against.

Other two

One can argue that by focusing on the other two areas of brand value computation, we can still spruce up brand value. But the issue is that when the equity is hurt, it has an impact on the confidence level of an investor which in turn has an impact on the overall attraction to FDIs.

What exact impact it has on the future projection of the two billion dollar target that Sri Lanka has set for 2012 needs to be further researched and evaluated.

Diaspora

The fact of the matter is that there are around two million plus Diaspora that left the country with a negative perspective. Currently, even as we speak, many of them are in influential positions globally and unless we as a nation can engage them and develop a framework for a positive perspective to be inculcated, we cannot actually solve this issue that has broader ramifications from a purely scientific platform of brand building.

On a separate note, when the area of governance can be questioned – be it the Tangalle shooting, IDH shooting or the other issues that the JVP and TNA have been raising in the media in the recent past – it all adds to the attack on the brand equity of Sri Lanka and hence the brand value computation.

Estonia case

I dig further into this very interesting report, which highlights how the BRIC countries have increased their brand value by 1.432 trillion dollars in 2012, which is an indication of the strong economic performance combined with a strong brand equity strength whilst Europe has lost almost 4% of the brand value due top to the economic collapse.

What was also interesting was the performance of Japan, which has lost 25.9% of its brand value, accounting for $ 679 billion.

But the case in point for Sri Lanka to my mind is Croatia. Even though the country has gained $ 5 billion dollars in value in 2012, which is a 21.2% growth, it is a case study for the falling EU that has helped the country position itself as a business friendly European nation and the prospect of getting access to the EU umbrella further strengthened the strong economic agenda of the country.  However, the lingering association with the alleged crimes during the Yugoslav war times and the post war investigations that followed have reportedly hurt the brand equity of the country as per the Brand Finance report 2012.

I believe this needs to be carefully studied so that one can pick up the impact such events can have on a country’s brand.

Way out

We must develop a strong engagement campaign with the Diaspora in the focused countries where there is a presence of hostility.

This includes a detailed reality check so that Sri Lanka clearly understands what can be done and what cannot be done.

Maybe understand how the brand equity of Sri Lanka can be strengthened given the political economy that most South Asian countries are faced with due to the coalition governments at play.  This will include non-formal coalitions that have been developed over time. Develop architecture to drive in a share of voice either with tourism marketing or Ceylon Tea advertising so that Sri Lanka’s brand salience is kept alive. Absence makes the negative aspects hit the headlines, in my view. Sri Lanka must target to be a 50 billion dollar brand within the next three years, given that on the parameters of economic development and infrastructure, Sri Lanka is forging ahead.