Letter to the Editor, by Andrew Hammond
RIO DE JANEIRO, BRAZIL – The Olympics begin on Friday in Rio, the first time that the games have been hosted in South America. In the midst of an economy in its worst recession for decades, a president who is being impeached, not to mention the potential threat of terrorism and the Zika virus, Brazil is badly in need of a brand makeover and the world’s biggest sporting event could help enable this.
As acting-President Michel Temer has highlighted, a key goal is to present a vision to the world of a modern, vibrant democracy and stable emerging market that is a prime destination for future investment and tourism. And with an estimated five billion people watching, former president Luiz Inácio Lula da Silva has also asserted that Brazil now has a first class opportunity to show it “can be a great country” after a troubled time.
Two major questions arise. Firstly, can a country’s reputation be enhanced in the same way as a corporate (or other organization) might do? And, secondly, can this have a significant, sustainable national economic impact?
On the first issue, competition for the attention of stakeholders like investors and tourists is intensifying, and national reputation can therefore be a prized asset or a big liability, with a direct effect on future political, economic, and social fortunes. Boosting country reputation is therefore an ever common ambition in what is an overcrowded global information marketplace, and a number of countries have successfully used the Olympics to positively differentiate themselves to the world, including Spain post-the Barcelona 1992 Olympics and Australia post-Sydney 2000.
Yet, the simple fact is that many nations fail to fully capitalize, reputationally or economically, upon hosting the Olympics and other major sporting events like the soccer World Cup. One only has to recall legacy images of abandoned and underused new-build Athens 2004 sports stadia, whose inflated cost helped contribute to Greece’s unsustainable public sector debt, to appreciate that countries do not always get this right.
Moreover, on the economic front, numerous studies have indicated that ‘legacy-driven’ Olympics growth is often over-hyped. In 2012, for instance, Citibank, found that in 9 of the last 10 Summer games, GDP tended to rise in host nations in the run-up to the event, but then receded in the two quarters afterwards.
To maximize prospects of Brazil benefiting, reputationally, in the midst of the country’s current malaise, it must pursue a concerted reputation and economic strategy that aligns all key national stakeholders (across the public, private and third sectors) around a single, coherent vision for its country brand. This exercise should not just be the preserve of tourism agencies, let alone government, but must involve the private and third sectors too.
A good example here is the ‘New Zealand Way’ Initiative which helped transform global perceptions of that country in the 1980s and 1990s. Like Brazil today, New Zealand was in the midst of a difficult economic climate during much of the 1970s and 1980s, partly caused by the country’s loss of preferred trading status with Britain and the Commonwealth – amongst the nation’s then major export markets.
In this context, the New Zealand Way initiative helped transform perceptions of the country by building a destination brand for outdoor sports and tourism, in part, by leveraging the hosting of events like the 1987 Rugby World Cup and the 1990 Commonwealth Games. Here, the untapped potential of the country’s natural environment was recognized and indeed subsequently showcased in films too like the ‘Lord of the Rings’ blockbuster trilogy.
And it is no coincidence that the New Zealand tourism sector has enjoyed a long boom. For instance, visitor numbers from Britain increased by around sixty percent between 2001 and 2006 alone.
Building upon the growing international appreciation of the country’s unspoiled natural environment, and in the face of the loss of its preferred trading status with Britain and the Commonwealth, New Zealand recognized that a strong country reputation for quality agriculture and produce would be hugely beneficial if it was to better compete in global markets.
The subsequent success of the country’s agriculture sector, which has also become more competitive and efficient, is symbolized by the fact that it now accounts for around one third of global dairy exports — that is twice Saudi Arabia’s share of the world oil exports.
The New Zealand example underlines how even a relatively simple, unified country brand vision can be powerful. To be sure, the country is not unique in having a beautiful, scenic environment but it has managed to capture the world’s imagination with its consistent branding that has put outdoor pursuits and natural values firmly at its core as epitomized, for instance, by the ‘New Zealand 100 percent Pure’ slogan.
This is a lesson that Brazil would do well to learn fast as it seeks to capitalize upon the Olympics. In the midst of the hurly burly of the next few weeks, the long-term opportunities of the event should not be sidelined.
And as with New Zealand, a key part of this must be connecting Rio’s hosting of South America’s first Olympics to a wider story that showcases Brazil’s strengths so as to increase favorability of international perceptions of the country, politically, economically and socially. Major positives here include the fact that the country is a vibrant, diverse, multicultural state that has kicked off its longstanding tag as a “sleeping giant” with the potential to become a regional superpower fueled by its status as the world’s fifth large country by area and population.
Taken overall, the medium and long-term reputational and economic impact of previous Olympics has frequently been overstated for host nations. However, in the midst of its current troubles, Brazil now has a significant opportunity to use the world’s largest sport event for a positive brand makeover that could produce a lasting legacy for the country.
Andrew Hammond is an Associate at LSE IDEAS (the Centre for International Affairs, Diplomacy and Strategy) at the London School of Economics, and is an Adviser at ReputationInc