With the appointment of the new Government we see the re-building of brand Sri Lanka has commenced – starting from the launch of the Port City, rejuvenation of the stock exchange and tax cuts to jump start the economy, all commended by the private sector.
A Sri Lankan being crowned as Mrs. Sri Lanka sure added value to the flagging nation brand in the last four years which is at $83 billion as per the latest Nation Brand report.
Exports at +1%
As per the Central Bank report, the export proceeds data as at end October 2019 (on a cumulative basis for the first 10 months) there is a marginal +0.8% growth to $9.6 billion. However the October performance is worrying given that exports are at negative performance at -0.2% to $977 million to be specific.
This comes in the backdrop of the 1.6% GDP growth registered in the second quarter of 2019 that demonstrate the vulnerability of the Sri Lankan economy emerged due to the downturn of the tourism sector.
Re-launch Sri Lanka
Whilst Sri Lanka has been grappling on the ‘Governance’ criteria mainly due to the bond scam and the administrative bungle of the Easter attacks, we see the world is passing us by – not only by Singapore, Malaysia or Bangladesh but now we see lesser known countries like Ukraine and Algeria have beaten us as per the latest data released by Brand Finance.
This performance does not augur well for the country and there is no option but we have to creatively re-launch the country brand with aggressive promotions in the areas like tourism and Ceylon Tea given that there is funding available on both fronts.
SL: $ 100 billion
In today’s competitive world, a country’s image has many ramifications as it’s the most important asset that a country has. The quality of the investments that one can attract, the export markets that it can penetrate and the quality of the tourists that the country can attract will hinge on the image of the country.
A point to highlight is that Sri Lanka that was ahead of Algeria and Ukraine in 2017 has beaten us in 2018 with a performance of $84 b and $89 b whilst Sri Lanka is lagging behind at $83 b. Sri Lanka must correct this situation and be a top 50 country by 2021 with the nation brand hitting $ 100 billion is my view. This can be done, given the focussed work that is happening post 16 November.
Brand value: Six key criteria
Let me share a quick overview on the criteria used to calculate nation brand value. The Anholt-Roper Nation Brands Index looks at a country’s image by examining six dimensions of national competence, all of which are treated equally with no weighting. This gives an overall sense of a country’s reputation as a whole. The six dimensions are:
1. Exports: Examines respondent’s image of products and services from each country and the extent to which consumers proactively seek or avoid products from each country of origin.
2. Governance: Considers public opinion regarding the level of national government competency and fairness and describes individuals’ beliefs about each country’s government, as well as its perceived commitment to global issues such as democracy, justice, poverty and the environment.
3. Culture: Reveals global perceptions of each nation’s heritage and appreciation for its contemporary culture, including film, music, art, sport and literature.
4. People: Explores the population’s reputation for competence, education, openness and friendliness and other qualities, as well as perceived levels of potential hostility and discrimination.
5. Tourism: Captures the level of interest in visiting a country and the draw of natural and man-made tourist attractions.
6. Immigration and Investment: Looks to attract people to live, work or study in each country and reveals how people perceive a country’s economic and social situation.
But a key point to remember is that nation brand building is not about painting a story globally with catchy advertising. It’s more about ‘implementing actions so that the people inside the country’ talk positive of the country and the world feels the vibes.
The good news is that post 16 November the overall sentiment has become positive .This in turn attracts better FDI, higher-spending tourists visiting the country and exports making a deeper penetration into markets.
Sri Lanka awarded the Mrs. World Title 2020
SL – Reality
On the above criteria the performance of Sri Lanka in 2017 was $ 77 billion brand, ranked 59th in the world ahead of Algeria and Ukraine which were at 60 and 61 respectively.
In the 2018 Brand Finance report, we see that Sri Lanka has grown by just 7.7% to $ 83 billion and ranked 61 globally whilst Algeria and Ukraine have grown by 27.1% and 23.5% respectively to be ranked 58 and 60, beating Sri Lanka, which is unfortunate.
In simple words it tells us that the pace at which Sri Lanka is performing is below the global industry average and hence the world is passing by. Let me do a deep dive on this.
Exports – Strategically weak
Whilst Sri Lanka crossed the export performance crossed at $ 11.3 billion in 2018 the percentage to GDP is around 20% which is way below countries like Vietnam at 86%, Thailand at 69% and Malaysia at 74% which is why competitiveness drops.
If one digs deeper, machinery and electrical exports account for only 8% of the export basket whilst competition countries average between 30-45% which is the key issue that makes Sri Lanka exporting products that compose of low GDP.
The Centre for International Development at Harvard University reveals that almost 76% of the products are at the lowest GDP growth range as against Vietnam at 34% and Thailand at just 15% which is why these entities are called industrial-driven countries as per the graph.
If one analyses the export basket in terms on complexity of the products we export, almost 76% of the products fall into the ‘Low Knowhow’ segment which means that we cannot ask a premium price and there are many substitute products in the global market that can be sourced which results in Sri Lanka’s exports not being of high demand.
This is why the National Export Strategy (NES) launched stage that reforms will be key to developing the export industry of Sri Lanka. This must be driven with absolute aggression.
Tourism – thematic campaign?
Let’s accept the fact. Sri Lanka is registering a 19.6% decline in the number tourists visiting the country as at end Nov, 2019. We are at 1.6 million number whilst last year we were at 2.0 million. The current visitor profile are the budget tourists coming into the country due to the prices that have been slashed by the industry.
Sri Lanka now needs to get back to the basics and look at the best practices done by destination marketing countries like Indonesia, Maldives or Madagascar and launch a thematic brand building campaign with an integrated communication drive using PR and digital to lift the profile of the country. This will be the key investment that can have positive ramification across the sectors.
Sri Lanka needs to move to action with speed. If this is not done, the next belt of countries to beat brand Sri Lanka will be Slovenia, Panama, Iraq and Angola, which is very sad.
[The writer is the CEO of the leading South Asian Artificial Intelligence (AI) company on brand perception diagnostics; Clootrack for Sri Lanka, Maldives and Pakistan. The thoughts are strictly his personal views. He is an alumnus of Harvard Kennedy School.]