Modi celebrates birthday whilst making India strong – Lesson for SL

The Indian Prime Minister celebrated his birthday earlier this week in the backdrop of India growing at a blistering performance of 7.1%. The January-March quarter saw the highest GDP growth in the last seven quarters with India becoming the sixth largest economy with a GDP of 2.2% trillion dollars and third largest on purchasing power. 

India today – 7.1% growth 

Post the demonetisation of the currency and the dust settling down, the country has slashed taxes on 50 items and imposed a tax on textile items which has resulted in stimulating consumption in the market which is a smart move given that it has helped balance the trade mix too. 

It is estimated that in 2018, exports will grow by 12.9% whilst, imports will rise by 15.3% which is technically not a serious issue given the trade tension globally fuelled by the US-China tariff war. It is estimated that India will end up with a trade deficit of $ 188 billion. A point to note is that India has almost 15 FTAs with 72% of the export earnings being generated from these economic partnerships. 

Prime Minister Narendra Modi must be on a high as he celebrated his birthday on 18 September as the relationship between US and India is said to be at an all-time strength, given that the US has elevated India to tier 1 of the trade authorisation which means that trade can take place on unlicensed exports and sensitive items. There are also media reports that there will be a trade agreement on IT between the US and India in the backdrop of the economic corridor opened up between Pakistan and China which is an interesting development that the world will be watching. 

SL – Catch-22 situation 

Whilst India, Bangladesh and Pakistan are driving on a 6-7% GDP growth, Sri Lanka is grappling with a 3% performance given the drought and poor implementation of public sector reforms. The daily revelations on corruption allegations starting from the bond scam to Sri Lanka Cricket and now the infrastructure development project on water has shook the Government. 

The stock market crashing out of the 6000 league whilst the currency hitting a Rs. 166 does not augur well for an economy that is import dependent for rice, sugar, dhal, sprats, chickpeas, flour and canned fish which are the staple diet of a common man. The proposed gas price hike by Rs. 192 will sure hit the wallet of the middle class that will further add pressure to the Government. 

This performance comes in the backdrop of the Q2 2018 Nielsen report that states that overall consumption at the consumer end has contracted by 14.5% which is the sixth quarter and consumption has declined at the household end.

Whatever the rhetoric we give on export growth, private sector credit growth, etc., the ultimate test is what all this has done to the smallest unit in Sri Lanka – a family. On this front from 2017 we saw the contraction in consumption of a3.3% in Q1, -3.1% in Q2, -3.7% in Q3, and in the final quarter by -8.2%. 

The pressure on the purse continued in 2018 with a -11.7% in Q1 2018 and now it has hit all-time low of -14.5% which is how serious the situation is. Given the price hikes in transport that is expected together with the basket of food also taking up the price due to the exchange rate, things are going to be very rough in the balance part of 2018 and the year ahead. 

Election year – 2019

Whilst the pressure on the purse increases, Sri Lanka is getting ready for the year of elections in 2019. Starting from the Provincial Council elections to the general elections and then the Presidential elections it will be interesting to revisit the ‘Modi strategies’ that worked in the last elections in India and lessons for Sri Lanka. Let me capture the essence.

Modi lesson 1: TV main medium

Though digital media is very popular and we see how key websites report information that offers insight into the inner workings of the Indian Government, the fact of the matter is that Narendra Modi remains one of the most powerful brands in the mainstream Indian media. The share of voice that he commands outweighs the negative media that gets emitted through social media. If we analyse the PR mechanism of President Modi and his marketing team, on a weekly basis he emits a main message through the TV medium so that there is a strong emotional connection with those in the living room of a home rather than on an individual mobile or TV screen where people read from websites that disseminate negative information.

Sri Lanka: If we examine the Sri Lankan landscape, out of a total of Rs. 125 billion spent annually on advertising, almost 70% is consumed through TV and only 20% through radio. Digital media, although powerful, does not account for more than 10% of spend but the reality is that it moves consumer behaviour. Currently, the Government is severely challenged with critical reviews of the performance to date which must be used as positive feedback. However, sadly no course correction is taking place.

Modi lesson 2: Credible product

The 2002 Gujarat riots and Modi’s alleged links to this incident dented his brand image. He distanced himself from the media until in 2012 he was given a clean chit from the Supreme Court and he then focused on rebuilding his brand. In 2009, when the economic downturn was in effect, Modi focused on developing Gujarat into an economic powerhouse of India with a GDP growth rate of 10%. The partnership with the private sector in driving the economy became a case study for the world. The best case in point is Tata setting up a nanotech company in Gujarat.

Sri Lanka: We must take a cue from Modi and maybe focus on the growth of the Sri Lanka tourism industry and utilise Modi-like behaviour. The best case in point is the launch of the global communication campaign on tourism that has been dragging since 2015. The latest news is that it is scheduled for launch in 2019 which is unfortunate as there is almost five billion rupees allocated for this task since 2015. What many forget is that the industry that bounces the quickest in any country globally is Tourism. Sri Lanka sadly is not leveraging this strength. 

Modi lesson 3: Right brand values

With the focus on developing Gujarat into a model state in India, what Modi achieved in his final five years helped establish strong brand equity in the minds of people. The brand values that began to be associated with the Modi brand were decisiveness, progression, aggressive but strong governance, a modern outlook by being tech-savvy and humour with good communication.

The brand values that surrounded Brand Modi were exactly what India wanted and thus brought him into power. The logic here was that the architecture slap bang met the challenges that the environment threw to Modi – fighting corruption at every level, women’s safety, protection from terrorism, international diplomacy and the ability to convey the actual picture to the people. I guess the 339 seats won and the 63% of India which voted for Brand Modi at the last election is a testimony to the fact that Brand Modi had the right values that the people wanted.

Sri Lanka: When it comes to marketing a brand, we have had some success internationally by securing GSP+. As the former Chairman of the Sri Lanka Export Development Board, I consider this a big win. But, the impact will not become a reality unless we focus on and developing the supply chain. Let’s accept it, Sri Lanka does not have an issue with demand creation. We are more challenged by supply chain consistency and meeting world standards. A point to note is that the incremental revenue from GSP+ is only $ 0.5 billion. If we are to achieve the 28 billion dollar export target by 2022, the focus must be on the supply chain than the FTAs is my view. 

Modi lesson 4: Divergent team

When Modi decided to contest the 2014 elections he first put together a team of professionals. This team numbered 200 and included graduates from the best universities in India – IIT and IIM. Some resigned from top jobs at JP Morgan, Deutsche Bank, McKinsey, Boston Consultancy Group, a former UN mission chief for Africa, a member of the Citizens for Accountability Governance (CAG), a statistical whiz kid, a digital marketing strategy expert named Hiren Joshi from the RRS and a top campaign planner for TV, radio and print media from London.

The overall media planning was handled by the marketing communication company Madison, with advertising veteran Piyush Pandi also on the team. Burson Marsteller and Dentsu India, a Japanese publicity company, was also part of the team powering the Modi team. I guess this is what it takes to manage a brand and its campaign when you want to get the plum job in the world’s largest democracy.

Sri Lanka: Let’s accept it, the Government machinery is not working cohesively. This is demonstrated by the conflicting ministerial statements aired on mainstream news shows and the conflicting thinking that is occurring at the technical level. This has to be corrected. The poor implementation of the Budget proposals in 2017 as per the Verite Report, is a clear reflection of where the key issue in Sri Lanka is. The problem is that the political leadership does not augur then correct skills to get the public sector to drive reform and the new business agenda. 

Modi lesson 5: Bold objective

Modi was very clear on his objective at election time. He wanted more than 272 seats. The bottom-up exercise had been done at the grassroots level, from villages to towns and then to the State level and how the numbers stacked up. I guess the clean sweep of zero to 10 seats in Delhi is a classic case in point of the planning that was put in by the team. Modi had travelled 300,000 km, attended 5,187 events, 477 rallies in 25 states and come into contact with 230 million people for the votes of 800 million.

Sri Lanka: It goes without saying that we will have to use this same strategy and solve the key issues Sri Lanka is up against. At this moment of time, it is on the area of corruption and Governance that the erosion has happened in the last three years. Every day the media reports an irregularity. This will have to be weeded out from the village to district level and then at the provincial council level. Thereafter, it has to be done at the ministerial level. If not brand Sri Lanka will not become a $100 billion by 2020. 

Modi lesson 6: Take the high ground

Modi and his team decided that taking the high ground was important if Brand Modi was to touch every Indian. So what they did was feature Narendra Modi in global media, like the Economic Times, TIME, New York Times, Wall Street Journal, etc. so that every Indian was filled with pride. 

He allowed competitors like Rahul Gandhi to play the national media, which was dogged by corruption scandals. Modi’s high ground strategy was very successful as Indians get motivated by inspirational communication that gives leadership to the world. In fact, Gujarat has many communication campaigns on the themes ‘1st in Asia,’ ‘Biggest in India’ and ‘Largest in the World’.

Sri Lanka: It’s important to understand the power of CSR at a global level. It must not be done just to add to brand equity but to give personality to the country brand – Sri Lanka. The abuse of key natural environmental aspects, namely through the extensive use of vehicles in Yala and the intrusion into the natural habitats of whales, elephants and dolphins by visitors must be managed. Sri Lanka can bring in legislation on these two fronts and take the high ground globally to protect the two largest living mammals on earth. With this idea we can be showcased globally. Sadly we are focusing on internal issues and thereby losing out on an opportunity for Sri Lanka to put its best foot forward globally.  

Modi lesson 7: Why digital media? 

Modi and his team drove digital media and were number savvy to reach the young voter. A classic example was when he took a selfie when he met his mother after his victory and posted it online. To date he has 2,263,673 followers on Twitter and 3,598,400 likes on Facebook, which reveals the detailed planning and execution that has been conducted.

Sri Lanka: The pickup for Sri Lanka is, why are we chasing after four million tourist arrivals? The fact of the matter is that Sri Lanka does not have the resources, mainly food and water, to cater to this demand. One of the reasons for the increase in food prices is the extra two million mouths that we have to feed. Some say that one million will be the ideal carrying capacity but the then what happens to the 25,000 hotel rooms coming up targeting a three star traveller in the next three years? Sri Lanka must do some careful number crunching and strategic planning. 

(The author is an award-winning marketer and business personality who can be contacted at [email protected]. He was the Chairman, Sri Lanka Export Development Board and Sri Lanka Tourism.)