West meets east
Last month's Russia Calling! forum helped communicate the changes the Russian economy has experienced recently. Brittany Golob attends the event.
In March 2011, an exhibit of contemporary Russian art was launched at the Tate as a partnership between Calvert 22, a London-based arts foundation and VTB Capital, the prominent Russian investment bank. The partnership sought to raise the profile of Russian art in Britain as part of a wider endeavour to promote the talents of contemporary Russia, artistic or otherwise.
This role of intermediary between Russian business and culture and foreign, particularly British investors has been explicitly cultivated by VTB Capital's global head of communications and marketing and member of the board, Olga Podoinitsyna, over the past five years.
She says of the relationship with Calvert, "VTB Capital is a business that develops the reputation of Russia by operating in accordance with all international standards and deep knowledge of international investors' requirements. By supporting the Calvert Foundation, we enhance our social involvement by bringing value for development of the young generation, the creative class as well as its perception by international community."
The pinnacle event of the year for VTB is Russia Calling!, a forum held in Moscow drawing together the global investment community and VTB itself in a dialogue about Russian investment opportunities and a celebration of Russian business culture. The three-day high-profile event was concluded by a speech and question-and-answer session with Russian president Vladimir Putin. The bank, partially owned by the Russian state, is no stranger to high-profile speakers and investors. However, Putin's hour and 15 minute session with the forums delegates was no mere appearance. The Russian leader responded to the audience's queries for about 40 minutes.
Fielding tough questions about the state of Russian business, his role in the G20, shale gas development and the Russian position on Syria, Putin sent a message of transparency and openness. He reaffirmed Russia's adherence to international business regulations and practices, as set out by the World Trade Organisation. "Improving the business climate requires continuous progress," he said through an interpreter. "We should introduce international best practices and work proactively to attract investment." This theme was reiterated throughout the conference.
By promoting Russia's and VTB Capital's respect for and adherence to international law and economic systems, the forum imparted to participants a sense of trustworthiness inherent in Russian investments.
Podoinitsyna says, "In order to remain successful globally, we judge ourselves against our international peers and practice the highest standards."
Recently, Portland Communications released a study into Russian-British business perceptions. Russian companies make up a quarter of all foreign IPOs on the London Stock Exchange and Britain is already one of the biggest investors in Russia. However, the study found that certain preconceived notions on both sides, reinforced by the media or cultural stereotypes, have been inhibiting further interaction between Russia and Britain. Investors on both sides remain unsure of investment. In the UK, 38% of investors intend to do business in Russia, yet only 8% of Russians say the same.
Last February, former MP Denis McShane, in a letter to the UKTI, warned against investing in Russia on grounds of corruption and non-disclosure. The UKTI has official warnings on those matters, but notes that Russia has mass potential as an emerging market due to its natural resources, education and industrial infrastructure. For its part, Russia instituted an entrepreneurs visa category last summer to encourage business leaders into the Russian economy.
"Relations between the United Kingdom and Russia are complex. Business, investment and trade issues are often overshadowed by wider diplomatic and political issues," Trevor Barton, executive director of the Russo-British Chamber of Commerce and Tim Allan, MD at Portland, write.
Podoinitsyna adds, "We understand the real situation of how Russia is accepted in international markets. It is clear that not a lot of changes have happened since the last decade in terms of the perception of Russia in the world and it is true that stereotypes are still alive. We have built our communications strategy around our foundation as a Russian bank but with international ambitions. Our company has a very strong platform, great expertise and a high-level team."
One role of the Russia Calling! forum is to establish relationships between investors and Russian companies. It's a comms strategy that has worked wonders over the past five years. Podoinitsyna says the bank's ability to promote these relationships relies on communications.
Not only does VTB communicate with its stakeholders and clients, as it has done since its inception in 2008, but with the global business community on behalf of Russian commerce. Riccardo Orcel, deputy CEO of VTB Group, reiterated this focus, "It is in the core part of our mission to facilitate international investors to come to our country."
The forum's programme highlighted that mission as Russian business and trade leaders spoke to delegates, as did current investors. Speakers from tech firms, infrastructure organisations and others within the industrial complex presented case studies from each sector. The plenary discussion on technology and education highlighted Russia's skilled and capable workforce. "We have a lot of people who graduate from technical universities which means we are very well suited to the new situation," IBS CEO and controlling shareholder Anatoly Karachinsky pointed out.
The infrastructure session featured regional leaders who spoke about projects highlighting the degree of foreign investment in infrastructure and the relationship between public and private investment. For investors, being confronted with facts and with the transparency of government leaders, VTB is able to communicate that this relationship is a positive one for Russian business. During Putin's address, the problems from which Russia suffers - outdated institutions, lack of capital - were not hidden. They are, however, complemented by straightforward facts about the Russian economy and the progress the state has made both in privatisation and in industrial growth.
The bank's communications strategy aims to cut through stereotypes, promote Russian business and remain transparent. Podoinitsyna points to the difficult questions from investors fielded by Putin as proof of the success of this strategy. "The willingness of the Russian leader to engage in a direct dialogue with investors gives more evidence that Russia is changing at the same pace as the rest of the world. It is just a matter of hearing these changes."
Russia is changing. But, as Podoinitsyna says, that change has to be communicated across borders and across oceans. British investors remain wary of Russia, yet their perceptions can be swayed through communications and the media. VTB Capital's comms strategy, from funding a contemporary art exhibition to fostering investment relationships to hosting the president of Russia attempts to make investors understand those changes.