Sri Lanka has been ranked 115th in the Brand Finance Global Soft Power Index 2023, a significant decline since its last ranking at 73. Faced with the fallout of an economic crisis, the island nation is committed to leveraging its resources and building its Soft Power score going forward.

Nuwan Gamage, President of the Sri Lanka Institute of Marketing, interviews on the subject below.

To read more about Sri Lankan Soft Power and the challenges it faces, see the insight by Ruchi Gunewardene, Managing Director of Brand Finance Sri Lanka.

Interview with Sri Lanka Institute of Marketing

Sri Lanka’s economic crisis has created unprecedented challenges for the country, impacting global perceptions towards the nation. What are your goals for the next decade in terms of building up Sri Lanka as a nation brand?

As the national body for marketing, it is the sincere belief of the Sri Lanka Institute of Marketing that nation branding is a powerful answer to the current economic crisis. It is true that our reputation as a nation has suffered during that past few decades, but we also vehemently believe that we have the resources to rectify that with a powerful nation branding strategy which goes beyond a marketing campaign. We have seen numerous, extremely diverse tourism campaigns that Sri Lanka has launched. Our approach to nation branding is different to that fundamentally, in it being policy-led versus merely a communications approach. In the next few decades, we hope to leverage our nation’s resources to co-craft and assist whoever is in power to roll out a policy-led strategy that is anchored in sustainability and solving issues relevant to Sri Lanka and also the rest of the world. This should ideally enable the world to see Sri Lanka through a new paradigm.

Culture & Heritage is Sri Lanka’s strongest Soft Power pillar, particularly attributes such as “great place to visit” and “food the world loves”. What role does this play in your national identity, and how do you plan to communicate these strengths to the global audience?

Indeed, it is a pleasure that most countries recognise the goodness of our people, the wealth of our culture, and appreciate the culinary wonders we have to offer. Whilst these will definitely play a key role in further positioning our motherland as one of the world’s favourite travel destinations, our nation branding approach, will look a bit further than doing only that. If we take learnings from countries such as Bhutan who have leveraged “Happiness” as a means of really driving their Soft Power alongside much larger countries than themselves, that is the kind of approach we are looking at. If I were to explain it from a marketing context, merely promoting the “product” that is “Sri Lanka” is not going to yield long term benefits, but if we were to find a unique selling proposition such as “ Happiness” in the Bhutan context and really drive a long-term, sustainability-led brand building effort, that is when we will see real impact.

Looking to the future, what are some other key industries that Sri Lanka should be focusing on to lay the ground for future economic growth?   

The ideal nation branding strategy should drive growth in any and all industries if done right. It is similar to how a company’s employer brand grows or how retention grows when you invest in strengthening brand equity. Having said that, exports will definitely play a key role in any nation branding strategy, closely followed by tourism. But the idea is to go further than that – to shift the nation’s image around the world in order to drive investments towards us, thereby strengthening each and every industry. Most importantly, the right nation branding strategy should reinstate love for the country amongst locals, enabling us to retain crucial talent in the country and recreating the need to live in our own motherland, which was a huge red flag we see in this year’s research where Sri Lankans think less of our country in comparison to what the world thinks about us, in some respects.

Insights on Sri Lanka

Sri Lanka is currently facing its worst economic crisis, brought about by economic mismanagement over many years and unsustainable foreign debt. This crisis is causing significant economic hardships for people in the country, including soaring inflation and rising commodity prices that are reducing their purchasing power. To make matters worse, the global news coverage of Sri Lanka's rapid economic decline is hurting the country's reputation, which is negatively impacting tourism and investment. 

Sri Lanka Institute of Marketing is taking action 

SLIM, the national body of marketing in Sri Lanka, has taken an admirable initiative to repair the country's damaged brand image. To do this, SLIM is adopting a fact-based approach to understand how the world views Sri Lanka and is working with relevant stakeholders to develop a structured plan to address the main issues. 

The primary goal of SLIM, as articulated by its current President Nuwan Gamage, is to make Sri Lanka an attractive destination for travel, investment, and living. This will be achieved by improving the country's reputation among external stakeholders. SLIM aims to regain confidence in the country by attracting tourists, showcasing investment opportunities, and building infrastructure that will lead to an improved quality of life for citizens. 

The challenge 

Sri Lanka's position on the Brand Finance Soft Power Index has dropped sharply, falling 42 places from 73 to 115, making it the country with the steepest decline in this year's index. The Soft Power pillars also show a decline across all categories, and Sri Lanka now ranks among the bottom 10 countries on the index. The lowest perceptions are observed in Governance, where Sri Lanka ranks 118th out of 121 countries measured. 

To rebuild Sri Lanka's reputation, SLIM is partnering with Brand Finance to prepare a comprehensive Perceptions Report on Sri Lanka, which will be included in the Global Soft Power Index 2023 study. This report will be used to gather insights and educate various stakeholders, such as SLIM's executive committee, influential members, private sector institutions, government policy makers, and political parties. The objective is to get their buy-in to a path of rebuilding Sri Lanka's nation brand. 

To achieve this goal, SLIM plans to use the facts to collaboratively build a practical implementation plan. The aim is to align key stakeholders who can influence policy and explore communication and promotional opportunities. The goal is to rebuild Sri Lanka's nation brand by regaining confidence of its stakeholders.  

Global Soft Power Index 2023

Explore the findings of the world's most comprehensive research study on perceptions of nation brands, presented in a downloadable report and an interactive dashboard.

The nation performs exceptionally well on Culture & Heritage, ranking 7^th in Asia – ahead of Indonesia, Vietnam, Malaysia, and 8^th on how effectively it managed COVID-19. Sri Lanka ranked in the middle of the pack for other attributes such as Business & Trade and Governance compared to its counterpart Asian countries.

The Index reflects Sri Lanka's core strengths: its friendly people, rich heritage and strong culture aligning with what it is best known for – a tourist destination. These are the very reasons it is consistently ranked high in travel magazines and websites, being among the most sought-after destinations to visit in the world.

One of the many unfathomable mysteries of Sri Lanka is how it can squeeze so much diversity into a small island.

From the palm-fringed beaches that circle the tiny island to the picturesque highlands covered with tea plantations, home to the world-famous "Ceylon Tea". The country boasts over 2,500-year-old historical kingdoms blended with Portuguese, Dutch, and British influence, all of which sit alongside the stylish, modern, contemporary architecture of boutique hotels dotted across the nation.

Sri Lanka has as many as seven world heritage sites, with diverse crops and a wide range of spices, flora, and fauna that host the most extensive land and sea mammals – which can be found within less than a hundred kilometers from each other. All of this makes a rich tapestry and treasure island to explore for foreign travellers.

Situated in the middle of the Indian Ocean, between Africa and the Far East, Sri Lanka has long been a trading sea route from ancient times. While its Soft Power on Business & Trade is relatively low, it records a positive score on the future outlook metric. In this regard, there is a big thrust on developing the ports across the country, and a massive modern infrastructure is emerging – called the Colombo Port City – on over 500 acres of land reclaimed from the sea.

The Soft Power of this strategically located tropical island in the middle of the Indian Ocean lies on the two key pillars of tourism and trade, which are pivotal for the country's future.

Interview with Channa Manoharan

Sri Lanka is known primarily as a tourist destination. How do you expect the innovation and knowledge services industry to get attention in the context of these perceptions?

For the past two decades, the innovation and knowledge services sector has built an enviable track record of attracting MNCs and large IT companies to set up their digital innovation labs and captive delivery centres in Sri Lanka.

Sri Lankan IT product companies have delivered world-class products and platforms to some of the global brands, while companies who provide software and knowledge services have focussed on high value niche areas. We are now at a tipping point where we are actively ready to market our capabilities to the world.

Everyone knows that India is the largest offshore outsourcing market. Being a neighbour, we believe that we can attract more specialised work requiring relatively smaller teams to be delivered from Sri Lanka. The pandemic and weather-related work disruptions – such as the floods in Chennai – are also reasons for MNCs and Indian majors to set up in Sri Lanka for business continuity purposes. We are also strategically positioned as a gateway to the fast-growing South Asian markets, having friendly relations with India, Pakistan and Bangladesh.

Sri Lanka is a desirable place to visit and live, with its cosmopolitan lifestyle, modern infrastructure, diverse culture – influenced by Dutch, Portuguese, and British presence – its clean environment, sandy beaches, lush greenery and biodiversity, as well as its warm and friendly people. Global customers can establish business relationships while combining leisure and travel – at some point in the future…. while sipping our tea!

What are the challenges in establishing Sri Lanka as a viable centre to export its knowledge?

We have all the right ingredients in place. Our primary challenge has been country visibility for innovation and knowledge services. While our industry has created a niche position for its innovation and knowledge services, no significant investments were made to market it to the world. Global analysts such as AT Kearney and customers worldwide call us 'a hidden gem'.

We have an outstanding reputation and track record of delivery with our current base, and we have some major global operators doing business in Sri Lanka. These include well-reputed companies such as the London Stock Exchange – which uses Sri Lanka as its innovation centre and service delivery for its global operations – and HSBC which has a captive delivery centre in Colombo. Pearson, IFS, Sysco Labs, Wiley Publishing, Axiata Digital Labs and Acuity Knowledge Partners are others who have established their captive innovation and delivery centres here. We have recently launched the industry brand 'Island of Ingenuity' which espouses our value propositions. We plan to build awareness for our industry in identified priority markets in the next five years with government support.

What is your future outlook?

The industry has a shared vision with the government to build the industry to USD 5 billion in export, create 200,000 high-value employment, and launch and support 1000 startups. This will include FDIs, venture capital, foreign exchange earnings through exports, resulting in significant socio-economic growth impact.

We have recently launched accelerators in Products & Platforms, Artificial Intelligence (AI), Cyber Security, and Intelligent Process Automation with the aim of positioning Sri Lanka as a Center of Excellence in these areas. We work closely with universities and academia to create a future-ready workforce in emerging technologies.

The innovation and knowledge services industry in Sri Lanka has embraced diversity, regional inclusion, environmental sustainability, and social responsibility. It has demonstrated resilience and adaptability in challenging situations and has emerged stronger. We are confident in achieving our goals with the government's vital support in promoting the industry and enabling conducive policies.

Brand Finance Global Soft Power Index 2021

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