Making the Most of Opportunities
Last month the European Leadership Centre (ELC), which operates at the IEDC-Bled School of Management, organised a conference entitled “The EU and Russia: Business opportunities and challenges of leadership.” At the conference, 99 representatives from business, government, non-governmental organisations, the media, academia and other relevant fields discussed the interconnectivity of the EU and Russia, the similarities and differences, and ways to create new leadership approaches in order to strengthen cooperation. It seems the biggest opportunities lie in connecting small and medium-sized enterprises.
President of the Academy of National Economy of the Russian Federation, Professor Dr Vladimir Mau and chairman of the Russian Association for Business Education (RABE) Professor Dr Sergey Myasoedov both stressed out that the EU is already an important economic partner for Russia. Some 53 percent of Russian exports are to the EU, while the share of imports from the EU is around 52 percent. It was also stressed that the Russian perception of individual countries of the EU is much more positive than that of the EU as a whole, which is attributable to differences in the understanding of fundamental values and lack of mutual trust. Alojz Peterle, member of the European Parliament and vice president of the EU delegation to Russia, also argued that Europe should reconsider its own values: “Geography is not important, the history may be more important, but most important is what we want to do together.”
The conference was chaired by Dr Erhard Busek, President of the Institute for the Danube Region and Central Europe. He argued that relations between the EU and Russia “are extremely important for our common future, not only in the energy sector and economy, but also for understanding the political role of Europe and Russia in the process of globalisation.” For that cooperation to occur he believes that “we need to get to know each other and develop mutual empathy; secondly, we must use language that is understood by both sides; and thirdly, we have to have a common will to solve the problems that exist.”
Russian Ambassador to Slovenia Doku Zavgayev said that the conference itself is proof that there are no major obstacles for boosting cooperation between Russia and EU, expressing hope that the EU-Russia summit in June would bring concrete steps for visa facilitation.
An interesting discussion panel on trade, direct investment and joint ventures – moderated by Dr Peter Kraljič, a retired director and partner of consulting firm McKinsey – raised a number of issues. Panellists, who included Branislav Grujić, co-owner and president of the PSP-Farman Holding, Janez Škrabec, chief executive of Riko, Eduard Vaino, vice president of Avtovaz and Johann Strobl, member of the board and director of risk management at Raiffeisen Bank International, spoke on barriers to joint ventures between the EU and Russia. They see the main issues as lack of mutual knowledge, complex administrative procedures, lack of developed infrastructure in Russia and limited movement of people. The key success factors were highlighted as the mutual understanding of cultures, education of managers and courage.
The discussion touched upon corruption in Russia, but Grujić said that although it is a problem it is also “a way to speed up business”. Panellists agreed that Russia’s biggest problem is administrative regulation. Stoble also cited the problem of uncertain property rights in Russia. This is bad for the banking business; makes it difficult to buy real estate in Russia; and the tax system is problematic as well as bureaucracy in general.
The President of the Slovenian-Russian business council Janez Škrabec also noted that there are still many obstacles for EU and Slovenian companies trying to enter the Russian market. In regards to Slovenia, this is reflected in the fact that trading is almost exclusively limited to ten Slovenian companies that have been present in Russia for decades. Russians are aware that Slovenia is strategically important for them as the western-most Slavic country, he argued, pointing to increased political ties between the country with visits like that of Russian Prime Minister Vladimir Putin in March. Škrabec added that absolute data on trade between the countries showed a slight decrease, but when the effects of the economic crisis are considered, cooperation can be said to have improved relatively speaking.
The lack of Russian investment in the EU was also addressed but panellists said that the simple reason for this is that Russians expect big and fast returns – something which tends to be lacking in the EU. The other problem is the restricted movement of people and all agreed that visas for Russians should be removed.
Regardless of the persisting problems, participants agreed that Russia is a land with endless opportunities and that some problems in the country, such as the lack of infrastructure, present an opportunity in itself. But to make the most of opportunities on either side, the mutual mistrust is ever present when it comes to business has to be overcome.
22 Feb 2012 / By Polona Cimerman
22 Feb 2012 / By Polona Cimerman
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