UAE and Saudi Arabia raise their nation brand value
The US tops Brand Finance’s 2018 ranking due to ‘business-friendly policies’
The UAE and Saudi Arabia, both increased the value of their "nation brands" in 2018, based on the strength of their goods and services, investment potential and quality of life, according to the latest study by consultancy Brand Finance.
The UAE’s nation brand value has grown 19 per cent to $707 billion since last year, placing the country at number 20 in Brand Finance’s annual ranking of the 100 most valuable nation brands. The country rose from 21st place in 2017, according to the latest survey.
“Construction projects across the Emirates are continuing at a fast pace, new world class theme park brands such as Legoland Dubai and Warner Bros World Abu Dhabi have opened their doors to visitors and steady hotel occupancy rates also indicate that the UAE remains a popular tourist destination for visitors from around the world,” Andrew Campbell, Middle East director for Brand Finance, told The National.
Saudi Arabia, the Arab world's largest economy, saw its nation brand value jump 18 per cent to $677bn, ranking 21st, compared with 22nd last year. The findings follow S&P Global Ratings affirming last week its A-/A-2 rating for Saudi Arabia with a stable outlook, on expectations of “moderate economic growth through to 2021, supported by rising government investment”.
Brand Finance values the world’s biggest nation brands using a calculation based on a country’s performance across three key pillars: goods and services, investment and society. These are divided into sub-categories: tourism, market, governance and people and skills.
In addition, the consultancy estimates the hypothetical royalty rate charged by countries, based on rates seen on agreements among companies in key national industries. Total value is also based on five-year forecasts of sales of the biggest corporate brands in each nation. Brand Finance produces a similar annual ranking of the world's most valuable brands. The UAE telecoms operator Etisalat was the Middle East’s most valuable brand this year.
The United States topped the 2018 nation brand list in the latest survey, with its brand value rising 23 per cent over the past year to reach $25.9 trillion.
The US economy has expanded rapidly with growth expected to continue in the months to come, the report said. The country's unemployment rate dropped to 3.7 per cent in September, a 49-year low. Alongside GDP growth, consumer sales, construction orders, car output and other indicators have also witnessed growth.
“As Donald Trump approaches the start of his third year at the White House, in the longer run, negative perceptions of his personal brand have turned out to have little impact on the nation brand as a whole,” said David Haigh, chief executive of Brand Finance. “Rather, the new free-market policies have resonated with business leaders and the economy is growing, driving an improvement in America’s brand strength and brand value alike.”
Mr Haigh’s comments are at odds with some observations of the US economy. A survey of more than 700 ultra-high net worth individuals - those with assets of more than $30m - by JP Morgan bank in April found that 75 per cent of respondents expect a US recession by 2020. The International Monetary Fund forecasts the US economy will expand 2.9 per cent in 2018.
China, the world's second largest economy saw its nation brand value rise 25 per cent compared to 2017, to reach $12.8 trillion. The country ranked as the second most valuable nation brand despite concerns of a trade war between it and Washington.
“China performs well despite the prospects of a protracted trade war with the US, displaying the established robustness of the Chinese economy,” the report noted. “This rise in brand value is also a credit to booming cities like Beijing and Shanghai, for their world-class infrastructure and well-educated workforce, which make them some of the world's best places to do business.”
In recent years, China has shifted its focus from commodity production to building world-class brands, such as smartphone maker Huawei and e-commerce giant Alibaba, whose success reinforces the strength of the nation brand, the report said.
Germany solidified its third position in the ranking, as the fastest growing brand value in the top 50, according to the report. The country’s nation brand value surged 28 per cent to $5.1tn.
Despite Brexit-related uncertainties, the UK’s brand value increased 20 per cent to $3.8tn, ranking the country fourth in the list.
Updated: October 8, 2018 11:43 AM