How can Panama restore its image after the data leak?

Rashmee Roshan Lall, thenational.ae

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Panama is no longer the proper noun it was. It no longer means just a tiny country in Central America or a light-coloured hat that’s worn as an accessory to a tropical suit and is accordingly associated with seaside holidays straight out of a Somerset Maugham story. Nor does it stand for the strategic 77-kilometre waterway connecting the Atlantic and Pacific oceans, which is regarded as one of the most technically difficult engineering projects in history.

Instead, “Panama" has become associated with unethical business practices because of the Panama Papers, as the stash of leaked documents has been dubbed. The 11.5 million files from the database of Panama-based Mossack Fonseca, the world’s fourth biggest offshore law firm, reveal details about the dealings of 140 politicians and officials.

Whatever the details, it’s not a Panama-centric problem, says the country’s vice-president Isabel De Saint Malo. She insists that the resulting “bad image" is unfair and the leaked files should not be called the “Panama Papers" as they have “information on many jurisdictions, over 21 jurisdictions where banks are based – and not one bank is based in Panama". So too “the offshores" mentioned in the files. Ms De Saint Malo says 60 per cent are not in Panama.

She makes a good point. But how does a country counteract negative branding? Is it even possible? It’s bad enough if a place has the stigma of having a disease bear its name – Guinea Worm, West Nile Virus, German Measles, Spanish Flu, Ebola Haemorrhagic Fever – what about the black cloud thrown up by current events? It can be a marketing opportunity for relatively obscure countries. This happened a decade ago with Kazakhstan, which was held up to ridicule by the actor Sacha Baron Cohen in the film Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan.

Though shot in Romania, the film made raucous fun of Kazakhstan – its theme song even recommended the country for having the cleanest prostitutes in the region. Kazakhstan was initially livid about the movie, which became a hit in the US and Europe and famous worldwide. It banned Borat and threatened to sue Cohen but by 2012, its foreign minister was expressing gratitude for “helping attract tourists".

This was true. Soon after the furore over the film, the foreign currency company Travelex said it had been forced to increase its reservoir of the Kazakh currency, the tenge, due to the increased demand from British travellers. Americans were reported as newly able to distinguish Kazakhstan from Kreplachistan, the fictional country from the Austin Powers films. And Astana decided to embrace Borat as a unique marketing opportunity, says Professor Robert Saunders, who has written extensively about Kazakhstan’s feud with “a mass-mediated fictional persona" over the content of its national brand.

This stands to reason. Before the film, Kazakhstan was just one of the five “Stans" created by the breakup of the former Soviet Union, with the added possibility of being confused with Afghanistan and Pakistan. Now, it stood separate and unique, able to make its case to the world.

It was an excellent practical lesson in nation branding, a term coined in the late 1990s by Simon Anholt, a former ad man who has advised the leaders of more than 50 countries on ways to improve their national image. This is not about traditional public diplomacy per se but finding a more nuanced way of communicating the essence and, crucially, the reality of a country to the world.

Unsurprisingly, branding seems to work better for newer countries such as Kazakhstan, which are less well known beyond their borders.

When Denmark had to contend with the so-called cartoon crisis of 2005, caused by the publication of 12 drawings of the Prophet Mohammed in a Danish newspaper, its new worldwide messaging barely worked. Within weeks, as Mr Anholt analysed it, Denmark went from being an established country that few people knew much about, to one “with the cartoons" in much of the Muslim world. Denmark was not really able to close the gap between how it wanted to be seen and how it really was, which is to say traditionally closed to immigration but with inherently friendly people.

A similar sort of conundrum arose in the United States after 9/11. Americans started to ask “why do they hate us?" only to get the following answer from the likes of branding guru Wally Olins: because “they don’t understand us", the US has not explained itself properly. It was a beguiling theory, except to critics such as Canadian social activist author Naomi Klein. She argued that no branding campaign could change the world’s perception of America’s reality –unilateralism in international law. “America's problem is not with its brand which could scarcely be stronger – but with its product."

It was a point well made. Be it the US, Denmark, Kazakhstan or Panama, terrorist attacks, cartoons or financial scandals, almost every place on earth gets the image it deserves. If you’re relatively unknown you can fiddle it. But only until reality catches up.