How to sell out a country in 30 seconds


At Davos last week, Russian Prime Minister Dmitry Medvedev made a naked call to the World Economic Forum for investment to flood into Russia. In a message echoing so many of those ringing out around the world, Medvedev declared his country open for business. It provided an interesting insight into what Davos – and the modern global economy – is all about.

Davos is perhaps the natural place for countries to sell themselves; CEOs and fund managers line the corridors, and keynote addresses can be backed up by discussions of economic data in the margins.

But the global contest to pull in the investors spills out far beyond the meetings of the rich and powerful in places like Davos. In fact, wherever you look, countries are bending over backwards to convince the business and investment communities that they are the place to be.

Capital now flows so freely that everyone is a potential investor, and there are few geographical limits as to where that investment could go. What remain are risk assessments and psychological barriers, based on perceptions about a place and the security of an investment therein.

A huge battle for hearts and minds is therefore underway to change these perceptions. Just as the globalised internet age has made everyone a potential investor, it has also made everyone the target audience for rampant destination marketing.

Anyone who tunes into international news channels such as BBC World and CNN – commonplace in cities like Brussels where international TV packages prevail – will have noticed the ample country infomercials in the advertising breaks between newsreels.

Many are purely focused on tourism – these generally feature well-to-do Westerners being wowed by the breath-taking landscapes and wonderful people of the country in question, all capped off by slogans such as Incredible India, Malaysia Truly Asia, or Touching Moments, Experience Macau.

Aside from being sickeningly cheesy (swans and sunsets abound), these adverts have a tendency to patronise the country they are advertising – the locals are portrayed as warm-hearted types engaged in a seemingly endless stream of festivals, dances and other eccentric traditions.

Should it be any surprise that they are simplistic? The idea of branding a country in one minute will always be an exercise in simplifying and stereotyping. Irritating as it is, this is perhaps the unavoidable face of country branding for tourism purposes. And it probably works – a minute full of stereotypes may well suffice to swing a holiday decision.

What is more pernicious is the other face of country branding: the ‘Invest in’ advert. These occur in the same places – on international news channels, before embedded videos on news websites – and are presumably aimed at the same well-to-do, cosmopolitan audience as the tourism ads. Except here the goal is not to convince you that this is a great place to visit, but rather to show that this is a great place to invest, outsource, or set up a new business. Ads like these have become all the rage for countries emerging from the economic shadows and desperate, like Russia, to convey the message that they are ‘open for business’.

The investor figure, as in Grow With Georgia, is typically a debonair Westerner who finds himself pleasantly surprised by the excellent infrastructure, business comforts and general professionalism of the host country. And the hosts are helpful, well-groomed people who look overjoyed to assist in the business venture.

But what is troubling is what is not said. These adverts speak in codes. If an investor is to be convinced to invest in a country in the space of a clean, breezy 30 second montage, there is clearly plenty of detail that will be left aside. So the viewer is invited to read between the lines. Euphemisms such as ‘reform-minded’ and ‘business-friendly’ often crop up in the voiceover. The general message that is meant to transpire from these adverts is pretty much the same regardless of the destination: that salaries are low, the workforce is obedient, regulations are loose, tax arrangements are favourable, and the country is free of anything ugly like social unrest.

The Korean Free Economic Zone is particularly creative in its quest to convince investors of its free-market credentials (as if the name did not suffice) – words like ‘deregulation’ and ‘tax reductions’ appear momentarily in bubble writing on the surface of the ocean. It is as if the creators of the ad, inspired by Inception, want the viewer to emerge thinking that the idea of Korea being a deregulated economy is something he has always known.

The Invest in Macedonia ad is an exception in that it is more brazen about its intentions. ‘In an economic downturn, it’s time to cut costs’, the voiceover announces, before listing average monthly salaries as low as 430 euros as one of the benefits of investing.

The adverts crystallise what is happening, and has been happening for decades, in the global economy. One after another, countries are outbidding each other to be the latest low-cost, low-tax paradise. They are as much as admitting that they will depress domestic wages, forgo tax revenues and do whatever neighbouring countries are doing and more to make life comfortable for investors and companies – providing that business is brought to their shores. This is the ugly side of globalisation. This is the beggar-thy-neighbour economics that tells us that the race to the bottom is well and truly on.

More than 6,000 bilateral investment agreements currently in force between countries. This is testimony to the growing importance of investment as a force in the global economy – a force for good, for bad, for change, or for none of these, depending on the circumstances.

These adverts provide a unique window into this new frontier of the globalized economy. In 30-60 seconds of slick montage the logic of the system is laid wonderfully bare. And the spectacle is troubling, not only because of the stereotyping, but also because of the underhand nature of the messaging.

It raises a set of questions: Is there something fundamentally wrong with the global economy when the things governments tout to a moneyed, international audience – low salaries, unregulated markets, preferential tax arrangements – are the very things they would tell their citizens they are against? And why do countries feel the need to sell themselves so brazenly to investors? Investment is ‘necessary’ to keep an economy growing and create jobs. But should any investment do? Will investments secured against the tacit promise of suppressing salaries and working rights not do more harm than good? Will infrastructural investments funded by foreign capital eventually lead to hikes in the cost of public services, so as to ensure a good return for the investors?

Russian citizens, like so many others, are in the process of finding out.

These are the personal opinions of the author alone

//

  1. #1 by Babeouf on January 30, 2013 - 12:52 am

    Immiserization as a tendency within Capitalism. Well this is new or it was a 150 years ago when Karl Marx discovered it. The most startling feature of modern Capitalism is that ,Keynes not withstanding ,it cannot be saved. The question posed by 20th and twenty first century developments do not concern the end of the Capitalist process. The externalities associated with autonomous units of production have settled that question. The only open question is whether humans will survive its end. Currently that looks unlikely.

  2. #2 by Victor on January 30, 2013 - 10:51 am

    The race for investment is part of contemporary globalization, but it is not the same everywhere.

    Ironically, sovereignty is used to put countries in a race against each other.

    So the juridical sovereignty doesn´t match the real (political/economical) one.

    This is why a big state/market like China has natural advantages.

    Very few companies can say, we won´t invest in China. But most of the other countries are very vulnerable.

    So a country like China can say, we will raise wages. And actually become richer.

    But the small ones can´t raise wages at any moment, because then relocation comes.

    In big countries the relocation is internal, which also means it is usually not absolute. Small countries get left with abandoned factories.

    Big countries develop diverse workforces, small ones niche their education. These workers then are also much more vulnerable.

    And in downcycles, production stops first in the countries that have the lowest political leverage. This is why you would see, for example, German factories first close in Spain, before closing in China or Germany itself.

  3. #3 by Betterworld Now on January 30, 2013 - 12:04 pm

    Davos has been going on for years, the only difference now is that the presidential pimps who attend it find it harder to deny their trade. The voters back home know what the subtext in the adverts is, they live with the consequences daily, they see their children’s opportunities for advancement diminish, their public services decimated, their pensions gambled, their wages cut.

    It is only when the political pimps realise that NOT going to Davos, NOT making the adverts, NOT selling their citizens into slavery that we will realise that the corporate media have lost the ability to control the message for good. At that point re-election will demand non-attendance at the annual reincarnation of the global slave market. For democracy and Davos are incompatible and mutually exclusive.

    Articles like this herald the dawn of a new era of truthful reporting; and truth leads inexorably to consequences in a democracy.

    That is why democracy itself is the ultimate target of the Davos puppet meisters.

  4. #4 by @CubaSupport on January 30, 2013 - 12:45 pm

    There is one country that will not attend Davos: Cuba.

    The political leadership wouldn’t dare attend because the Cuban voters would recall them the next day and put their seats up for re-election. That’s what happens in a real democracy: that is the power of the citizen at work. Some call that the dictatorship of the electorate (others substitute the archaic word “proletariat”).

    Leaving aside the semantics, how does your democracy shape up? Can you recall your pimp and force them to stand for re-election mid term? Cubans can.

  5. #5 by jon livesey on January 31, 2013 - 1:42 am

    Ah the eternal struggle against reality. Countries compete with one another to attract investors and entrepreneurs using tools like preferential tax treatment. In the US, states compete against states.

    They do this because more jobs are better then fewer jobs, and higher tax revenue is better than less.

    Meanwhile some whine about wage “slavery”.

  6. #6 by John Ward on January 31, 2013 - 11:55 am

    Fascinating and well-written piece.
    Remember when free-flowing capital was going to solve everything, and bring about a new growth paradigm?
    Russia is a good choice for the author’s spotlight. Not so much caveat emptor as count your fingers: the ratings agencies haven’t a clue how to warn people about the Wild West-East Side Chicago that is the RF.
    http://hat4uk.wordpress.com/2013/01/30/crash-2-we-are-100-certain-that-it-just-doesnt-matter/

  7. #7 by Marc on February 2, 2013 - 4:22 pm

    Thw western world will find this out in the next 10-15 years. The game is up. The financial-economic system is not sustainable. The jobs are going to increasingly disappear and not just industrial, but low and median level administratieve jobs too. Unemployment in 10-15 years time will be 20% across the western world if not indeed more.

    The cause? Free trade. It benefits the rich, corporations and politicians but not anyone else. Casino parasite corporate capitalism is the enemy of the ordinary people in the west. No I am not a communist because that was equally dumb idea, for different reasons.

    But I do believe excess wealth needs to be taken away from people who have it.

  8. #8 by Marc on February 2, 2013 - 4:29 pm

    Europe: 7% of the population of the world. 25% of the wealth. 50% of the social spending. But industrial jobs are rapidly disappearing. And administrative jobs will follow.

    Please someone, amuse me by telling me the economic model of Europe is sustainable.

    The USA: 5% of the world population, 25% of the wealth, 35-40% of the social spending (surprisingly high, eh?)

    Please amuse me by telling me the wealth of the USA can be maintained.

    For the western world, the game is up. The financial economic system is unsustainable and the next 15-20 years will be the reckoning.

    When will people finally wake up and realize corporations don’t care about you. They care about cheap labor making shoddy products that need tons of maintenance. Politicians care only about these international forums where they can sell out people behind closed doors.

    But no one wanted to listen in the last 10 years or so, so I’m going to be very amused watching events unfold. And I will be telling people that ‘we told you so, if only you’d bothered to listen’.

  9. #9 by Marc on February 2, 2013 - 4:33 pm

    Its always so amusing to see that people really think that perpetual economic growth is even possible, or that you can run a government budget on a perpetual deficit, borrowing the rest thus perpetually increasing the debt.

    I tend to remind people who seem to believe such things their financial economic model requires perpetual population growth and limitless natural resources. And our model requires ‘the rest of the world’ to be poor, and to be exploited by us to maintain our disproportional wealth.

    Cheap resources which is what most ‘wars’ these days are about, no matter how much the French try to play the ‘humanitarian’ card.

    Hundreds of years from now, historians will compare the decline and fall of the ‘West’ to the decline and fall of the Roman Empire. They will be dumbfounded and will argue endlessly about how people just let it happen.

    Just look at Greece. People see the government robbing them, putting them in poverty and all for the benefit and glory to maintain payments to greedy rich bankers.

  10. #10 by André on February 7, 2013 - 1:07 am

    It does not suit the dignity of the state to pander to business. This corrupts a nation. But the real issue is that the anti-colonial movement failed in the “developing world”. Anti-colonial nationalism in particular, in quite a paradox way. German early 19 century nationalism was also born from an anticolonial (=anti-Napoleon) spirit. Or as war mongering poet Körner wrote ““Noch sitzt ihr da oben, ihr feigen Gestalten, vom Feinde bezahlt und dem Volke zum Spott. Doch einst wird wieder Gerechtigkeit walten, dann richtet das Volk und es gnade euch Gott.” So it is time to question the whole idea of sovereignty and move toward shared sovereignty, checks and balances, and governance “for the people”. As long as the state is governed by foreigners, you can blame the misery on them. Once the people are in charge their elites pursue the same trickling down strategies of the money flows, the institutionalised corruption. I think it would be a good idea if nation states peer review each others. So far you only find that in trade policy. People should colonize themselves and give up the idea of sovereignty. That would lead to better governance and ultimately better control over business. I can’t see why the powerful nations would not be well advised to sent canon boats to offshore tax paradise.

  11. #11 by Rick Daudi on February 10, 2013 - 3:01 pm

    Marc: the economic model of Europe is perhaps sustainable, but its wealth is not in a globalized world of free trade.

    If we open our borders to free trade with parts of the world where wages are only 10% of our own minimum wages, in the end our own working class will be the big loser. Our elite will probably survive, even thrive. The real wonder is how the capitalistic European elite has politically sold globalization to the European lower and middle class, while it is so obvious these will suffer during the coming century.

    The big blocks like China, India or the EU are doing better than small individual countries in their periphery. For Europe globalization makes more interregional cooperation necessary, moving power away from democratically chosen national politicians to the unelected technocrats of the EU. China, once another communist failure, is already a technocracy. Russia is developing in the same direction under a semi-dictator. India is also becoming a technocracy because its top-heavy bureaucracy strangles democracy in corruption and nepotism. In an environment where only money counts and rule of law is weak, the corrupt elite always wins. Due to the rise of populism, democracy in the US and Brazil has become meaningless too: there is no longer a democratic choice when issues of real importance disappear from the agenda.

    The end result of globalization will be more inequality and less democracy everywhere in the world.

  12. #12 by artistry skin care|artistry products on February 22, 2013 - 10:01 pm

    This is very fascinating, You’re a very professional blogger. I have joined your feed and sit up for looking for extra of your wonderful post. Additionally, I have shared your website in my social networks