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Rebranding
the Philippines
By Michael Alan Hamlin
May 13, 2003
Hong Kong chief executive Tung Chee-hwa
recently pledged close to $130 million to launch "large-scale
publicity and promotions internationally and locally" once
SARS (Severe Acute Respiratory Syndrome) is brought under control.
It has spent about the same amount on the City of Life campaign
since 1998. The commitment to match that multi-year investment in
a much shorter span is indicative of the seriousness with which
a series of misfortunes have damaged Hong Kong's image and its economy.
With hotel occupancy down to 20 percent
in the best hotels and in single digits most everywhere else, the
urgency is acute. Tourism accounts for five percent of Hong Kong's
GDP (gross domestic product), and the tourism industry - rather
than wait around for government - has launched a "We love Hong
Kong" promotion intended to encourage local residents to up
their spending while waiting for the World Health Organization to
lift its travel advisory, which is seen as key to providing any
credibility to government's re-imaging plans.
In fact, however, Hong Kong's problems
go way beyond SARS. There is a widespread perception that government
- and especially its chief executive - is ineffective. The crisis
of confidence began when government botched the handling of a similar
health crisis, the infamous Bird Flu epidemic. It has consistently
allowed itself to be co-opted by Beijing, particularly with respect
to the Rule of Law. And it has struggled to strategically define
the future of the Hong Kong economy, despite becoming increasingly
interventionist. Even its promotions have caused confusion. Up until
recently government ran two simultaneous branding campaigns, the
enduring "City of Life" campaign - now cancelled - and
the newer "Asia's World City" - which apparently will
survive although critics say they don't understand what the phrase
means.
Things have gotten so bad for Hong
Kong that I could almost swear that we were talking about the Philippines.
But not quite.
As President Gloria Macapagal-Arroyo
prepares to depart for her state visit to the United States, the
Philippines' image problems could hardly be worse. There are both
substance and style issues. Let's consider style first, because
it is quickly addressed. That's because there is no style, or not
much anyway. Government has hired a big-name PR outfit to generate
publicity during the visit. But that effort will terminate with
the visit, which means that any positive news will quickly fade
and the country will fail to leverage much in the way of strategic
benefits.
Meanwhile, tourism secretary Richard
Gordon has created what is certainly a world-class campaign in his
"Wow Philippines" drive, but its shoestring budget and
competition for awareness with former missionary and Abu Sayyaf
hostage Gracia Burnham's book promotions, Asia's battle with SARS,
and the Supreme Court's penchant for abrogating contracts with international
investors suggests that it's going to have little impact in the
way of increasing tourist arrivals. Of course, I guess Gordon can
always argue that without the campaign, the drop off in arrivals
would have been even more significant. And he may be right.
But that brings us to the substantive
issues, or the lack of substance, that is a necessary requisite
to overall enhancing the Phlippines' reputation. To give you an
idea of where we are, I spent yesterday morning working in the lobby
lounge of the Makati Shangri-La. I had plugged in my laptop, started
on my first cup of coffee, and arranged my reference materials when
I noticed that the tables nearest me seemed to be filled with representatives
of foreign investors.
And they were complaining. Not about
SARS, but government bumbling, and the complaints were wide ranging.
How, they asked for example, could they be expected to invest in
badly needed infrastructure in the wake of the Supreme Court decision
throwing out not just one, but two contracts for multi-million dollar
infrastructure investments in as many days. First, there was the
matter of the $500 million new international terminal, which bakes
in the sun everyday unused. Then, the court affirmed its decision
to void a contract for reclamation and development of portions of
Manila Bay. Both deals were originally negotiated during the administration
of Fidel V. Ramos.
Whether or not these decisions are
proper, the image they project is of a government that can't make
deals the Supreme Court won't undo years later, and after hundreds
of millions of dollars have been invested. With all the opportunities
for investment that Asia and the world present, there are plenty
of other places for foreign investors - who want to know that the
deal they make is truly made - can go. The political risk associated
with investment in the Philippines where government is involved
is simply unacceptable.
Ms. Arroyo will soon be off to Washington,
hand extended, for government-to-government largesse. But unless
she - or more probably her successor - addresses the matter of whether
private investors can deal confidently with government, whatever
President George W. Bush doles out is going to be of little strategic
value to the cash-strapped Philippines.
(Michael Alan Hamlin is the managing
director of consultancy TeamAsia and the author of three books on
Asian economies and companies. His latest book is Marketing Asian
Places, of which he is a co-author (Wiley, 2001), and he is currently
at work on High Visibility: The Making and Marketing of Asian Professionals
into Celebrities. Write him at mahamlin@teamasia.com.).
Copyright © 2003 Michael Alan
Hamlin. All Rights Reserved.
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