Reputation Matters, not only for Companies, but for Countries

To attract international business and foreign investment, as well as to make improvements at home, countries should seize opportunities to enhance their global reputations.

Reputation matters, not only for companies, but for countries.

In 2009, when Rio de Janeiro was awarded the 2016 Summer Olympics, Brazil was a fast growing economy, one of the original BRIC countries (Brazil, Russia, India and China, later renamed BRICS, to include South Africa) and loved by the international business media.  Surely, it was believed in 2009, by the summer of 2016, the Olympics would be shining a spotlight on a star of the global economy.

Preparing to host the Olympics, however, would not be without work.  Hosting the Games in proximity to Rio’s favelas, or slums, parts of which were notoriously lawless, meant that the favelas would have to be cleaned up.  But areas controlled by violent gangs cannot be cleaned up overnight.  The work needed to begin immediately.

Meanwhile, beyond the street crime of the favelas, Brazil had also struggled with corruption since before Rio was awarded the Olympics. In 2009, it did not appear that Brazil’s corruption issues would be a factor in 2016, but corruption in Brazil received increasing media attention over the next seven years.  Among other scandals, a major Brazilian energy company was involved in a multibillion dollar corruption matter.  Brazil’s former president was indicted.  The president who succeeded him had been impeached.  In short, things were a bit of a mess.

Brazil’s plan to use the 2016 Summer Olympics to showcase a rising star of the global economy had to be revised.  The 2016 Summer Olympics needed, instead, to be viewed as a unique opportunity to improve the country’s international reputation.  By the eve of the opening ceremony, however, there was a question as to whether that opportunity had been squandered.

Infrastructure projects were being completed at the last minute.  There were news reports that the Olympic Village had been plagued by plumbing and electrical problems, collapsing sinks and a small fire.  There were news reports of raw sewage in waters where some of the events would be held.  And as for the favelas, a Los Angeles Times headline the Sunday before the opening ceremony spoke volumes:  Armed forces ‘pacified’ Rio’s slums, but as Olympics approached, the gangs came back.  Those issues were compounded by concerns about a possible ISIS-directed or ISIS-inspired terrorist attack.

In the end, Brazil hosted a successful Summer Olympics. The question today is whether Brazil will leverage that success in order to move beyond recent corruption scandals and certain economic issues at home, and whether Brazil can perhaps regain the reputation it had in 2009. On an individual level, everyone hopes Brazil will succeed. But, as a whole, Brazil must decide that it wants to succeed.

Successfully hosting an Olympic Games, World Cup or any other international event will not repair a country’s underlying problems.  Positive media coverage is not a substitute for real change.  But a country that is admired internationally will find it easier to attract international business and foreign investment and easier to make improvements at home.