Marketing Macedonia:
The Public Relations and Promotion of Countries in Transition

By: Dr. Sam Vaknin

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Many Macedonians ask me: why do foreign investors abstain from investing in Macedonia?

This reminds me of one Jewish joke and of three (true) stories.

The stories first:

In the November 1st edition of the prestigious economic magazine, "The Economist", there is an ad published by the Berlin Economic Development Corporation.  It contains the names of all the countries in Eastern and Central Europe including such godforsaken ones as Azerbaijan and Kyrgyzstan.  Only one name is missing: Macedonia.

A second story: all the important internet sites provide their users with lists of countries.  The users use these lists to identify themselves to the webmasters of the site.  The lists are very comprehensive.  The names of tiny quasi-republics are included (anyone knows anything about Tuvalu?).

With the exception of very few websites, the name of Macedonia is not to be found in any of these lists.

And a last story: on my way from Prague to Skopje, I was seriously asked by a reservations clerk of one of the leading airlines whether Skopje was part of Belgrade.

These are not funny incidents.  Still, they remind me of the Jewish joke that I promised to you:

In a small Jewish town there was a Jew who made it a habit to complain to God weekly: he never won the lottery while many of his neighbours became rich through playing the game.  After decades of such complaints, God (completely fed up) said to the Jew: I have been trying to help you for decades - but help me to help you - FOR ONCE BUY A LOTTERY TICKET!

A few conditions must be met before Foreign Direct Investment is made available to a country.  Last year 336 billion USD were invested in emerging markets - but they were not spread equally at all.  Some countries (Russia, for instance) received very little of it, others (China, to name one) - the bulk.

The first condition is that foreign investors must know that the country exists.  Very few people know that the Republic of Macedonia exists, let alone where it is, what is it producing and selling and other basic facts about it.

In an age of advanced communications and transportation, there is a glut of information.  A country which does not differentiate itself from others, does not have its own "brand" - in effect does not exist.

A failure in disseminating information translates into diminishing political power and decreasing foreign investments.  In certain cases it puts the very existence of the country at risk.  Will America send soldiers to protect a country unknown to the American populace?  If the West has no vested interests (money, oil, whatever) in Macedonia - will it really matter if it ceased to exist?

To answer these questions, let us analyse three cases: Israel between 1948-1968, Great Britain during the new "Labour" era (the "branding" period) and Slovenia after 1990.  We can use the lessons derived from these three disparate case studies to draw up a blueprint of public relations for Macedonia.

The small (20,700 sq.  km.) State of Israel was established in 1948.  Its very establishment was a brilliant geopolitical and political coup, a masterly use of public relations.

Israel was openly described as an "ethnically clean" country intended to accommodate the world's Jews.  Citizenship was granted on a racial-genetic basis: he or she whose mother was Jewish was eligible for citizenship immediately.  All others had to go through a tortuous (and often unsuccessful) process to obtain the same.

Despite these politically very incorrect and unappetizing features, the Jewish State enjoyed tremendous popularity throughout its existence.  This popularity was cleverly translated into one of the world's richest economies.  Many attribute this phenomenal success to the (partly imaginary) clout of world Jewry.  This explanation is not sufficient.

The political leadership of the Zionist (=national) movement made good use of other factors:

One third of the Jewish people was cruelly and cold-bloodedly murdered during the Second World War.  Many other nations suffered huge losses in human lives (Russia lost 20,000,000 people!).  Still, there was a big difference: no nation was almost wiped off and no nation was persecuted because of its religion or racial origin.  Jews were murdered because they were Jews and for no other reason.

Understandably, the world felt guilty.  The Jews were able to manipulate this guilt and to extract political and financial benefits out of an otherwise reluctant world.  Many nations (USA) felt that they had to support the creation of a safe haven for Jews somewhere on the planet.  Others felt obliged to compensate them monetarily (Germany).

This (totally justified) guilt was further compounded by the hostile and violent Arab reaction to the existence of a Jewish State amidst them.  Israel was cast in the role of David against an Arab Goliath, the small underdog versus the giant (Rocky style), one against many (Arab countries).  Despite objective reality (Israel was always much stronger militarily than all its neighbours combined and much more motivated) - Israel succeeded to maintain this false image for decades.  Moreover, Israel presented itself alternatively as the small brother of such Western powers as Britain, France (1956) and the USA and as a bastion protecting western interests in a deeply unstable, unpredictable and perturbed part of the world.  It really was the only democracy, young, stable, with the dominant members of the population coming from Central and Eastern Europe and from Western Europe.  It did resemble the USA in many ways: hi-tech industries, computer and general literacy, a high level of culture, fair play, a system of genuine popular representation.  It did protect the West's interests and, in the process, came close to being an outpost of neo-imperialism and neo-colonialism.  But it chose right, it chose capitalism and the West.  It was aligned in a period of non-alignment (remember Tito and Nasser).

Even lately it presented itself as solving one of the world's most ominous problems: that of imminent migration from Eastern Europe.  It received 10 billion USD in loan guarantees from the USA intended to help it to absorb 700,000 mainly Russian Jews ("which otherwise" - the Israeli argument went - "would have flooded the West").

Granted: Israel has some real advantages.  It is a perfect transit area between all the important emerging markets (Africa included).  It has an inordinately highly educated, polyglottal workforce and it enjoyed (and still does) big infusions of money from the West and from Jews all over the world.  But in essence it is a living triumph of mind and image over matter.  Israel is the most dangerous place for a Jew to live in - and every Jew regards it as a shelter because of excellent image making.  Israel is of no real strategic significance (it was unable to help during the Gulf war) - and the mighty USA behaves as though it is the most important spot on Earth.  It is no longer the only democracy in the region - but is still wrongly known as such.  This is the power of marketing a country.

Another example is Slovenia.

Slovenia marketed itself aggressively.  It even hired expert lobbyists to work the corridors of power in the UN and in the USA.  It cultivated journalists, media people, public relations personnel in big business.  It published lavishly and shamelessly engaged in propaganda.  as a result, it has an excellent public image - supported by less excellent realistic credentials.  Slovenia is absolutely far from what it pretends to be.  Still, its pretensions are sufficiently based on realistic elements to convince its own people.

After the elections in November 1996 any semblance of political stability disappeared.  Very old wounds were opened when the (former) communists called not to compensate collaborators with the Nazi and Fascist occupation forces for their nationalized property.  There is also a debate between free marketers and more socially oriented parties concerning the future of the welfare state.  But all the parties, regardless of hue, are united behind a Western (EU) and Northern (NATO) orientation, away from the Balkan in general and from former Yugoslav states in particular.  The Slovenes even refuse to connect the port of Rijeka (Croatia) with Corridor 5 (the Barcelona-Kiev thoroughfare) for fear of being again identified with their former compatriots.  They emphasize every difference of opinion with Croatia and these are proliferating lately: shipping prices, borders, banks, nuclear power an a lot more.  The message broadcast to the world is: see how different we are from these semi-civilized remnants of the Yugoslav Federation.

Slovenia poses and positions itself as a bridge between East Europe and its West, between Central Europe and Asia.  It made peace with Prodi's Italy and publicized the good services that it is offering to landlocked Austria and Hungary, current EU members and prospective ones.

The world media was flooded with data regarding every aspect of Slovenia's maritime ascendance: Daewoo a big client of Slovenia's port, Koper (above said port) overtaking Trieste in cargo handled, the docks are improved, there are thoughts to convert the midlands, traffic will double in 10 years.  The Foreign Minister (Kracun) makes it unequivocal: Slovenia is politically and mentally far away from the Balkans.  With 10,000 USD GDP per capita It is richer than a few EU countries (Portugal, Greece) and will become a net contributor to the EU budget thus joining an exclusive club (with Germany as a member).  Inflation is low, Slovenia was not influenced by the collapse of the Yugoslav internal market (70% of its trade is with the EU), its currency is stable, its budget balanced, its public debt close to invisible.  This is a country to do reliable, long term business with.

Swept under the public relations carpet is the truer picture: crony privatization, foreign investors are less than welcome, companies do not restructure and are not competitive, the salaries are much too high and price many Slovene industries out of existence.  Unemployment is high and rising (currently at 14%), growth is down and industrial production slumping.  Moreover, the Slovenes are highly xenophobic and fiercely independent.  They do not want to belong to another political federation, so they detest the idea of the EMU.

Every now and then, the world media have a new star: it used to be the Czech Republic Albania - now it is Poland and Hungary.  Slovenia was never seen as meteor (rising and falling) - rather as the North Star: always, reliable to navigate by.  This are the results of a very successful marketing, market positioning, lobbying, image making and public relations campaign.

Many countries have drastically altered their image through a concerted, intentional effort : Spain, Chile, Ireland, Australia to mention some.  The last to seize on the idea that a country is a brandname and (like any other product) has to be rebranded from time to time, is Britain.

To summarize a very livid and complex debate, Britishness has acquired either a bad or a staid name, depending on whom you ask.  To be British means to be: past-oriented, xenophobic and imperialist (Thatcher is credited with the revival of these two traits), vaguely negative (older people) to totally indifferent (younger folks).  Foreign investors (inward investment is fairly high) identify Britishness with inflation, strikes and staid products.  British companies (British Telecom and British Airways lately) are doing their best to camouflage their Britishness.  Tourist regard Britain as one, huge museum of slightly comic traditions.  The British Tourist Agency is dropping the Union Jack and Tony Blair is hosting film starts and fashion designers in Downing Street to project an image of a cool, creative, young country.  This as opposed to the sitcom image of white, protestant and imperialist.

Paradoxically, to be British might mean to be less and less British.  Only 48% of Britons see themselves as British.  The Sports Minister called lately not to play the anthem and not to wave the British flag on international sports occasions.  People think that less nationalism means more trade and less war.

A British think-tank (a British novelty in itself), Demos, defined the six new dimensions of future Britishness (courtesy of "The Economist"):

A Global Hub (an exchange of goods, messages and ideas) - a bridge between Europe and America (examples: the City, Heathrow)

A Creative Island - crammed with innovating minds from science to music

A Hybrid Nation - deriving strength from ethnic and cultural diversity

A Silent Revolutionary - espousing non-violent change and a trend-setter (from privatization to de-industrialization and to constitutional reform)

A Nation of Buccaneering Entrepreneurs

The Nation of Fair Play and the Rule of Law

The notion of Britishness will be thus newly defined

The belief (really ungrounded in research) is that rebranding will boost the economy.  True, branding has to be somewhat correlated to reality.  Otherwise it might prove embarrassing and distract the authorities from their true functions.

And from Britain to another poorly branded country: Macedonia.

Macedonia has a lot of marketable advantages - and one of the worst marketing strategies amongst the economies in transition:

- it has rich natural endowments (much more than Israel)

- an educated workforce (much more than South Korea, Thailand and China)

- (relatively) cheap labour (paid less than Croatia, Slovenia, the Czech Republic)

- a massive diaspora of Macedonians abroad (much more than any other nation except the Jews)

- political and macroeconomic stability (much more than any other Balkanian country, Greece included)

- natural trading instincts (Macedonians have graduated the 500 years of the Turkish School of Survival and did their post graduation in the Communist University of Getting By)

- the sympathy reserved to a small country surrounded by much bigger enemies (by the those in the West who know that Macedonia is there)

- a unique geopolitical and cultural role (by virtue of its history, its culture and, especially its peaceful role in the last Balkan War - the Yugoslav disintegration)

- an advantageous geographical location (the perfect transit route between Europe and Asia, much better positioned than Slovenia for certain purposes)

None of these advantages is properly brought to the attention of the world.  Macedonia comes to its attention only when ethnic tensions erupt.

To thrive, this crucial handicap must be radically altered.  The experiences described in this articles might show the Macedonian decision makers the way to the creation of a new brandname: Macedonia.