Country's Reputation

Topics: Foreign direct investment, Investment, South Africa Pages: 5 (1600 words) Published: February 21, 2012
« Every inhabited place on earth has a reputation » Anholt, 2011, p.7

A reputation according to the dictionary is “the estimation in which a person or thing is held, especially by the community or the general public”. A country communicates with the rest of the world and creates its reputation through what Anholt (2011, p.25) calls the six natural channels. He enumerates the different types of public relations as following: tourism promotion, export brands, policy decisions of the country’s government, foreign direct investments in the country and recruitment of foreign talents and students, cultural exchange, activities and exports (music, arts, sports, film, etc.) and people of the country itself (political leaders, sport stars, film stars, etc.). According to Anholt (2011, p.7-9), country’s reputation can affect people’s perceptions more than the reality itself. Trad (Reputation Institute Executive Partner) (webseminar, 2011) also confirms this affirmation with the example of South Africa which, according to the Reputation Institute, “has a great reality but not as good reputation as its reality would permit”. Anholt (2011, p.8) also says that it can strongly modify the way people think about the country and the way they behave towards it. Individuals are very sensitive to the image reflected by the country. The Reputation Institute (2011) found a very strong correlation between a country’s reputation and people’s willingness to visit, buy its exported products and services, invest, study or even live and work there. The Reputation Institute estimates that a 10% change in a country’s reputation leads to 3% change in tourist receipts (Lewis, 2011, p.23). Let us consider the effects of any riot or protest in a country on its inhabitants and consequently on tourism. Trad explains on CNN (2010) that people “want to visit countries with happy people, if these ones are unhappy (which is the case if there is such an event) then people will choose another country when they select their destination for vacations” (CNN International, 2010). Riots or protests against the government are indicative of unhappy people and hence often violence. Thus, in the mind of overseas visitors it means complication with the transport services, unstable political conditions, unsafe living conditions and thus overall an unsafe destination. According to the reputation institute, the top drivers of a country’s reputation, for all individuals are the friendliness of the local inhabitants and the overall safety of the destination. A significant example is the Egyptian revolution during the early part of 2011, powerfully affected the reputation of Egypt as a desired tourist destination and thus the number of tourists visiting Egypt fell by 45.7% during the first trimester of 2011 compared to the same time last year (, 2011). According to Naudé and Kruggel (2007), a country’s reputation in the international market is directly responsible for its foreign direct investments. The political stability of a nation is an indirect indicator of economic stability and thus acts as an attraction for business investors. Let us continue with the Egyptian example: during the Egyptian revolution and the political unrest in the country, Egypt’s foreign direct investments fell by 124% during the first trimester 2011 in comparison with the last quarter of 2010 (AhramOnline, 2011).

According to Pharoah (2004, p.16), countries are beginning to realise that reputation matters, and means money. In fact the Reputation Institute calculated that 10% increase in a country’s reputation leads to a corresponding 11% rise in its tourism receipts and 2% increase in FDI. Thus reputation needs to be managed in order to be positive and can be used to create a value for the country. Pharoah suggests that governments can play the role of coordinator between the multitudes of organisations formal or informal that represent the country. Today, the governments are the brand...
Continue Reading

Please join StudyMode to read the full document

You May Also Find These Documents Helpful

  • Managing Risk to Reputation
  • Reputation Risk Management Research Paper
  • Reputation in Shakespeare's Othello Essay
  • Honest Reputation Essay
  • Reputation Management a Self Article Essay
  • The Role of Reputation in Othello Essay
  • Essay on Reputation in Othello

Become a StudyMode Member

Sign Up - It's Free