Russia is worth it: the Russian Federation is actively seeking international investment.
An interview with Anna Urumyan - the representative of the state of Niedersachsen in Russia explains how she strengthens German-Russian economic relations with her expertise in the Russian market and efficient local network, and how she can support and advise you.
Ms Urumyan, you represent the state of Niedersachsen in the Russian Federation. Could you please tell us a bit more about your work and about you personally?
It’s a huge honour for me to represent such a beautiful German state and to be able to help establish the activities of the trade mission in the Russian Federation from the outset. I’ve headed up the trade mission since 2010 and I must say, this is the part of my work that I enjoy the most.
It’s not false modesty when I say that I’ve grown to love Niedersachsen: the people, some of whom are now my friends, and the nature, sights and lifestyle – in short, the charm of the North.
I’ve been working for the state of Niedersachsen for over 15 years now. And not a single day has been boring. Looking at my CV, I would say that I’m very well equipped for my work as representative of the state of Niedersachsen.
My language degree, which I later supplemented with an MBA specialising in International Cooperation and Foreign trade, fits very nicely with my hobby: travelling. My love of travelling is an important part of my life: on the one hand, it’s educational, and on the other it instils tolerance, respect for other cultures and highlights the diversity of our existence.
Furthermore, I’m also head of the Moscow trade mission of the Deutsche Management-Akademie Niedersachsen (DMAN) based in Celle and Managing Director of OOO BMS, a subsidiary of DMAN in Russia.
How challenging was the period of severe restrictions during the corona pandemic?
I’ve more or less formed a standard response to this question of late: hard, because I’m really an offline person. In my profession, human interaction is particularly important and valuable. Networks are everything, because establishing initial contacts online or by telephone is extremely difficult. As we all know, we usually only get one chance to make a positive first impression.
And the pandemic has forced our backs up against the wall, so to speak, and imposed its own rules of play on us.
My team and I have acquired new soft skills during this time and quickly digitalised everything. Everything was online: meetings, seminars and especially working from home with all of its bureaucracy.
But staff management was also a real challenge. After ten weeks of prescribed self-isolation, virtually without leaving the house, it was an absolute joy to be able to go to the office again.
The corona pandemic has had a negative impact on economic development in all countries. How do you see the economic situation in the months to come?
It’s a thankless task to make a forecast or evaluation in the current situation. All of the top institutions are trying to come up with different scenarios. In Russia we have a combination of two major factors: the oil price trend with its initial turbulence in early 2020, and the corona pandemic with the threat of a second wave.
Many experts believe that Russia has enough money saved in its welfare fund which will help it get through the crisis with perhaps a bit less drama than might otherwise be the case. But also because of the growing trend towards localisation, which has increased as a result sanctions, and the fact that it is not as deeply rooted in the international value chains, Russia may suffer a bit less in economic terms during the corona crisis.
One of the strategies of our government is to develop our country as a supplier country. The Coface Barometer, for example, indicates that Russia may even see lower GDP losses than Germany in 2020. Another relevant forecast based on customs statistics for the first five months of 2020 shows that imports haven’t fallen as sharply as exports. The structure of imports shows a greater focus on capital and intermediate goods, which would in turn suggest an upturn in economic activities.
On the other hand, the World Bank and other experts believe that Russia will lose up to 6% of its economic output in 2020. Furthermore, the prolongation of ambitious national projects by our president until 2030 also leaves room for a certain amount of speculation.
In normal times, what interests you most about your work as representative?
The diversity of the work and the tasks. I learn more with every new project. ‘Lifelong learning’ and ‘learning by doing’ are popular catchphrases at the moment, and this is what typifies everyday life in the trade mission of the state of Niedersachsen.
I’ve built up a large, diverse and efficient network which allows me to tackle every task and access different expertise, be it in business, science, politics, society or culture.
I’m on hand to help and advise our Niedersachsen-based companies here in Moscow, to explain the peculiarities of the Russian market, but I have also gone a step further and offer an office-in-office service. And I offer practical solutions when it comes to deliveries, customs clearance for imports and certification as well as my favourite job – marketing Niedersachsen as a business location.
Do you see any key sectors in the Russian Federation that might be of particular interest to Niedersachsen-based companies?
We have to make a distinction in what we’re talking about here: sales to Russia or local production with the prospect of supplying other countries. I’ve already mentioned the trend towards localisation in Russia. But there’s also the import substitution strategy and a realignment of Russian economic policy with the international market.
The Russian Federation is actively seeking investment: there is a new version of the special investment agreements (also known as ‘SPIK 2’), there are programmes to support exports, and the ‘Made in Russia’ status is being promoted. But at the same time, participation in government tenders is restricted for foreigners who are not rooted in Russia and, of course, we cannot ignore the sanctions.
Hence, there are certain differences in the modus operandi for Niedersachsen-based companies on the Russian market.
I would definitely say pharmaceuticals, chemicals, agriculture, mechanical engineering, hydrogen technologies and waste processing are of particular interest, but this list is by no means exhaustive.
I’m always happy to answer specific queries from Niedersachsen-based companies – Russia is worthwhile in many cases.
What particular economic and cultural aspects does a company from Niedersachsen need to adapt to at the moment?
I don’t like generalisations. Get rid of all stereotypes – that’s possibly the first thing you learn from the international nature of my work. Of course there are particularities and real no-go’s, but in many aspects Germans and Russians really aren’t that different. But I would make the following points: consider very carefully and thoroughly who you are working with, because first impressions can be deceiving.
Our legal system is improving, but it’s still far from ideal. Technical regulations and requirements as well as regulatory compliance are different and are often not 100% logical. They may even be outdated in some areas. German colleagues will usually need a lot of patience and understanding.
Many Russians also have a different attitude towards resources: labour and energy costs, for example, are relatively low, but capital, on the other hand, is expensive. This also goes some way to explain why work efficiency here is sometimes lower. But another national project aims to make improvements and increase labour productivity. There’s even a German-Russian initiative for this, the ‘efficiency partnership’.
Russian companies also have some different customs and practices, other ways of doing things, a different corporate culture. And there’s no clear distinction between work and private life, the two are fluid and impact on each other. Criticism is often taken very personally. But when you understand these things, you can use them to your advantage in your work.
Once you’ve secured a partner, or their trust, they will value the nature, manner and certainty of the cooperation. And when they’ve taken their German colleagues to heart, they will be a partner for a long time, because they will be very loyal.
What are the challenges you see facing companies from Niedersachsen and how can you help them specifically?
Most questions arise from practical issues in relation to foreign trade and, in my opinion and perhaps because of my experience, these are the clearest and most significant ones, and can be answered efficiently. One of the new challenges of exporting to Russia is, for example, marking with ‘Chestny Znak’ – a new, digital track & trace system. I try to keep Niedersachsen-based companies up to date on this. Current forecasts indicate that all industrial sectors will be involved by 2024.
Other common queries concern the search for partners, evaluating the market, assessing business partners, the right approach to market entry and the associated challenges. Every query is processed individually with tailored answers and signposts towards potential solutions.
Russian companies are increasingly interested in becoming active in Niedersachsen, be it by setting up a sales unit or an actual new business. How can you help interested Russian companies?
Yes, many Russian exporters are very interested in the German market – some of them see it as a status symbol. There’s also the active support and funding from the Russian government as part of the ‘International Cooperation and Export’ national programme.
The Niedersachsen trade mission works closely with the federal Russian export centre, as well as with the extensive network of export centres in the regions. Our focus is on marketing Niedersachsen as a business location, providing advice to Russian companies planning to set up there – I can always rely on immense support from the staff at the German Ministry for Economic Affairs and their sound expertise.
When you look back at your work so far, what are your favourite success stories?
I always find that question the most difficult to answer – there have been many successes that keep me personally motivated for the next tasks.
I’ve held several interesting forums on economic relations between Germany and Russia or Niedersachsen and Russia, co-organised several delegation trips from Niedersachsen to Moscow and other Russian regions, also with a focus on the partner provinces of Perm and Tyumen. But I’ve also helped Niedersachsen-based companies set up and expand their sales and export activities to Russia and provided assistance and advice to some companies establishing their own structures or subsidiaries on the Russian market.
I live in the here and now. For me success is always when my knowledge and skills can be useful, when I’ve helped out in a complex situation – and when I can go home happy and look forward to the new and exciting challenges the next day with renewed strength…