Changing perceptions about Russia
Olga Podoinitsyna, Member of the Board at VTB Capital, explains the role that a trade forum has played in improving Russia's reputation in the investment community
The current outlook for international businesses is tough. They are faced with global economic uncertainty at a time when trust in international financial institutions has been rocked. Emerging markets have for some time acted as a balancing force to downward pressures in the developed world. But even the BRIC countries have shown signs of slowing down, with China reporting far more modest growth than before the financial crisis. While Russia's economic growth remains robust, there are still challenges to overcome - many of which are based in some degree on perception and reputation.
Communications is a soft power tool. If this tool is well-maintained and used with a certain skill, it can achieve serious results. It can help to influence the attractiveness of both business and country to the target audience and to overcome the challenges of perception. Media is important for shaping reputation and, consequently, the attitude of investors. Economic factors are equally important, the key ones among them being return on investment, the consumer marker and availability of natural resources.
As Russia becomes an increasingly integral part of the global economy, there is now an expectation that business practices and communications will evolve in line with closer integration.
Moscow's vision is to become an international financial centre, on a par with London and New York. Aside from economic, legislation, infrastructure and other key factors, achieving this will depend on reputational development.
At the international level, recent developments such as Russia's accession to the World Trade Organisation and hosting the prominent APEC forum for this first time this year are just two markers of the country's continued integration into the global economy. Russia, with its huge natural resources, a highly educated workforce and a developed manufacturing foundation continues to be a key player in the BRICs.
So what more must happen? Leading financial institutions, such as VTB Capital, must continue to forge a new vision for Russian business that meets international best practice and sets an example to the wider economy.
At a time when growth in emerging markets is weakening the role of banks and corporations from those regions is especially important. Western European banks are turning their backs on Central and Eastern Europe. In this environment, the importance of communications has never been more relevant.
VTB Capital has made it a priority to tackle communications challenges to support business. We have recognised that putting strategic communications at the top table will help the Russian investment banking sector meet significant reputational demands. Our objective is to ensure that the voice of strategic communications will be heard by the target audiences.
One of the most important ways we have started to help shift the dialogue and change perceptions is through the RUSSIA CALLING! Investment Forums. With the first Forum in London in April 2009 - just one year after VTB Capital was set up - we demonstrated our business and strategic positions. With RUSSIA CALLING! Investment Forum in Moscow in October of the same year, we confirmed the events status and set a new standard for Russian investment conferences: more than 1,500 participants from 24 countries - 400 Russian companies meeting international investors. The annual Moscow event now attracts about 2,000 delegates, including 400 investors from across Europe, the United States, Asia, the Middle East, Africa and Russia. For global investors, the Forum has been a vital way of helping them understand Russia's business, economic story, as well as its investment attractiveness.
They recognise the economic situation in Russia is more sustainable in the context of the current European market. Foreign direct investments in 2009-2011 were three per cent of gross domestic product, higher than in Europe, while Ernst & Young has claimed that Russia's strengths, including natural resources and a strong labour force, support its leading role in the global recovery.
But the Forum has never just been about cutting deals and securing investment. Its goal has always been broader - to support the dialogue between the international investor community and Russian companies and to alter perceptions. It acts as the gateway to doing business in Russia. For the fourth consecutive year, The Forum was held in London while the inaugural New York Forum was held in April. Together, these events are core to a global financial community, linking the world's leading financial centres and connecting investors to businesses and policy makers with interests in Russia and the EMEA region.
How have we been able to bring together such influential political and business stakeholders to address the most pressing issues of the day?
It has only possible by engaging in progressive communication strategies - being fully integrated, fully digital and multi-stakeholder focused. An organisation such as VTB is at the forefront of Russia's changing perception in the international business and financial community. Events and communication strategies that take an open and engaged approach, such as RUSSIA CALLING!, have proved to be one of the most effective ways of creating a positive image for Russia's economy, investment landscape and Russian companies.
Traditionally, communications strategies are led by the business and commercial needs of an organisation. But in RUSSIA CALLING! we have demonstrated that the converse is true – communications strategies can lead a business as well. For a prominent Russian financial institution, this is a significant change and one that should be embraced.
If Russia is to enter the top 20 of the World Banks Ease of Doing Business league table by 2018?a commitment made recently, and if Moscow is to become one of the world's financial hubs, more businesses will need to learn this important lesson, especially when growth in emerging markets is under renewed pressure.