Institutions and Competition

Trust Barometer Promotes Mistrust of Russia and BRICs

January 31, 2014
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It’s convenient to discuss social utilities like Facebook, Twitter and You Tube in the context of nations seeking to propagate policy and push back the contending views of other governments.

 

But business elites and NGOs interrupted the diplomatic conversation before former U.S. secretary of state and current 2016 presidential hopeful Hillary Clinton gifted her misspelled reset button to Russian foreign minister Sergey Lavrov in 2012.

 

In this context, one of the things that helped change how business elites and governments perceive and interact with each other is the annual study that buzzes around at World Economic Forum time in Davos known as the Trust Barometer, presented by Edelman, the world’s largest independent public relations firm.

 

The Trust Barometer, which samples 33,000 people world-wide in an attempt to measure public trust in government and businessl, was launched in 2001, the year Osama Bin Laden’s Al Qaeda terrorists attacked the World Trade Center and the Pentagon and the United States started its $3 trillion war in Iraq.

 

A few weeks after 911 a Goldman-Sachs economist (no longer associated with the firm) coined the term BRICs as a public relations ploy to promote investment in developing economies, which had been reduced to a trickle due to the economic crisis. The concept went viral and suddenly top economists, analysts and business writers were touting investment in a new economic alliance that was projected to dominate the world’s leading economies by around 2050.

 

South Africa joined the group in 2010.  But so far the group remains something of an enigma. The BRICS have no headquarters, no brand, no distinctive logo like the Organization for Economic Cooperation and Development (OECD) does, and no visible leader.

 

This year’s study on the BRICs, "BRICs, going nowhere slowly," by Robert Holdheim, Edelman director for Africa, Middle East and South Asian operations, seems to have made a Pentagon-style bracket creep into the theatre of partisan digital diplomacy.

 

In doing so, Edelman joins ranks with The Economist and The New York Times by taking Russia and the other BRICs nations group down a peg or two.

 

It can be argued that the Edelman Trust Barometer crossed the rubicon. But whether the move was triggered by the fact that the economic policies of the emerging nations are no longer in alignment with the United States and other developed economies--  who use public relations as a vehicle wrap to their interest in maintaining global hegemony in a socially inclusive wrapper—is subject to debate.

 

The New York Times recently added Brazil to its list of “struggling economies” that includes India and South Korea, among others. Yet when the media empire was struggling financially it took a $250 million loan from the world’s richest man, Carlos Slim of Mexico, Russian media didn’t call out The New York Times for having financial problems. Nor did Brazilian media like Folha and Globo. Nor did The Economic Times of India. It’s not part of their culture to do so.

 

Now, employing the theme “BRICs, Going Nowhere Slowly” the new Edelman Trust Barometer study by Holdheim amps up Russia’s mistrust for the government of president Vladimir Putin and has the hubris to remove South Africa from the BRICS grouping altogether. Does that sound political to you? Should the BRICS issue a response? Did South Africa leave the group?

 

Grouping Brazil, Russia, India and China together, the study claims that “excluding China, they (the BRICs) exhibit the highest degree of trust in business as institution (Brazil 70 percent, Russia 45 percent and India 79 percent).”

 

China is excluded because the gap in the difference of how much Chinese trust or mistrust government is only one percentage point.

 

Analyzing the numbers for “highest degree of trust” from a different perspective than the one used by truster Holdheim, Russian trust in government wins out over Russian trust in business by the sizable margin of 10 percentage points, 55 percent to 45 percent.

 

Exploiting this ten percent edge among Russians who trust government more than they trust business, a well-funded candidate can build a campaign capable of winning the next presidential election in the Russian Federation. Ten points is a big margin in any political campaign.

 

Looking ahead, the Trust Barometer concludes that the BRICs have a problem in that “other countries don’t seem to trust them.” But this charge needs to be filtered through the perspective of what Holdheim calls “developed western markets,” notably the United States.

 

On closer examination, however, this truster notion belies its own data to wit that outside the “developed western markets” developing economies in general overwhelmingly trust the BRICS to the extent (on the average of a 60 percent approval rating) that they would invest in or buy a company in Brazil, Russia, India or China.

 

Another incongruous area that raises credibility questions is that the Barometer increased Argentina’s trust rating by a whopping 10%, one of this biggest gains posted in the study.  Yet Argentina’s government has been called out twice by the International Monetary Fund (IMF) for presenting misleading financial data, particularly regarding inflation.  In addition, the government expropriated a privatized oil company causing $8 billion in losses to investors and businesses, mostly in the European Community.

 

Maybe it’s time some organization organizes a study about trusting the Trust Barometer. That's all I've got to share with everybody for now.

Note: If you wish, you can read the various components of this the study by visiting these links.

http://www.edelman.com/post/trust-and-the-brics-going-nowhere-slowly/

 

http://www.edelman.com/insights/intellectual-property/2014-edelman-trust-barometer/trust-around-the-world/

http://www.edelman.com/insights/intellectual-property/2014-edelman-trust-barometer/about-trust/

 

 

 

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