Regional Administration - an Effective Way of Communicating for Investors

 Igor Skachkov, Partner Strategy Partners Group
At the moment there are several factors that have an impact on the attractiveness and assimilation of capital investments in Russian regions. First, the social-economic strategy of development in Russia until 2020 was laid out at the end of 2008. The strategy in actual fact, declares the political will of the Russian leadership to convert the Russian economy from a slow responding and energy based one to innovation based one. In order to do this, the government have raised innovation and investment activity all over the country. Although the emergence of the financial crisis has somewhat changed perceptions of middle-term aims and targets, both Russia's president and prime minister continue to note the need for fulfilment of long-term objectives, in parallel with resolving the problem of recovering from the economic crisis. The regions try to balance between the problem of keeping to the budget and the task of working out a long-term scenario of development for their territory.

Second, in 2010 a new town planning code will come into operation all over the Russian Federation, and this will compel the regional governments to become more active in formulating long-term plans and investment attraction plans. The main advantage of the revised version of the legal code lies in the fact that town planning and investment must become interconnected elements in the development of the town. What is not clear is the relative priority of development of the territory if the regions are not able to validate the town development plan.

Yet another factor is the change of leadership that must necessarily occur in a number of regions. New mayors and governors understand that attracting investment to their region is their main function and that the well-being of their territory depends on successful realization of financial aims. In our experience, the regional government also understand that the best way to examine the situation in the new economic area is to create a strategy of development of the region, which is based on a careful analysis of the region's economy.

For the last decade, regional administrations have advanced considerably in strategic planning. Our company has participated in the crafting a development strategy for 20 regional administrations on different levels. A correctly crafted strategy is not just a tool to lead the territory, but a roadmap for investors. The strategy includes a detailed analysis of the advantages and disadvantages of the area, development prospects of various branches of economy, crucial investment priorities, valuation of essential resources and plans on their attractiveness. It is not always that such documents are published, not necessarily because they are super secret, but rather because the regional administration have not paid enough attention to self-promotion and advancement. Although, in one of our most recent projects -- creating a development strategy for Arkhangelsk region -- public relations was considered an additional measure of efficiency of the work.

Investors who are considering the Russian regions may be able to make considerable wins if they examine the region's crafted plans for long-term development as a tool for planning and realization of investment objects in the area. At the same time, strategic consultants may be an effective resource for planned investment and network inside the administration. We advise investors to investigate along these general ideas:

•  Carefully study the strategic documents in the region where you are planning to invest. Ask for them from the administration of the region, if they are public access.

•  Get in touch with the consultants who participated in creating the strategy. In meeting with them personally, you may get further information that was outside the scope of the initial investigation, such as: changes in the situation in the region; possible changes in priorities in the near future; whether the crisis has brought any serious amendments to plans, and so on.

•  Find a way to meet with the person in the region who is directly in charge of attracting investment -- the head of administration or the governor. Use traditional channels to achieve this, embassy representatives, the chamber of commerce, the town council and the business community. Consultants around the region may also prove to be useful, as there will always be an intersection of interests.

•  During the discussions with local administrators refer to already developed long-term plans and to the development concept for the realization, which the administration is responsible for.


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