Russia’s potential in financial services is a prize the City should unwrap
IT’S ASTONISHING that you can travel by train from the heart of Canada right to the Pacific at Vladivostok, crossing nine time zones and an eighth of the world’s landmass on the way. Sadly, the pace of business doesn’t allow such journeys anymore, so I will be taking my business delegation to Russia and Kazakhstan, this week, by air.
Luckily, anyone visiting Russia – by fast means or slow – has the perfect metaphor for this compression of time and space: the Russian doll or matryoshka.
Russia is resource-heavy, but lighter in services. It’s a giant landmass inside and outside Europe, with a massive concentration in the Moscow region. Its history is long, but its time spent as a market economy has been relatively short. Russia will still surprise you.
This is partly why Russia and the City have so much to offer each other. The financial services sector in Russia is still developing, and I am looking forward to continuing our work with the Russian authorities in building up Moscow’s capacity as an international financial centre. Developing Moscow will increase international trade volumes, and that will mean that there will be more opportunities for both the City and the UK as a whole.
Russia’s potential is much like the matryoshka doll: the outer shell is large, but it is only the surface. In order to get the full scope of the country, each layer must be opened up and understood. At the heart of these layers lies the smallest of the series of dolls, and it is this figure that investors are interested in – the raw potential offered by Russia’s markets.
Although the potential is there – solid and tangible – youth and potentiality tend to go hand-in-hand with a degree of unpredictability. We want to help Russia continue to create the stability, predictability and clarity that will attract international business and international investors.
Let me give you one example from my own experience. When I went with my predecessor as Lord Mayor to Moscow last year, I experienced something of an epiphany while listening to one speech. The speaker talked about the importance of the rule of law to business. Initially, I thought that this was very strong stuff – but the Russian audience loved it, because they recognised that the rule of law was all about creating the stability, predictability and clarity that business needs.
UK firms are well established in Russia, so we will be advocating the provision of a level playing field for overseas firms in the country, in order to attract more international investment. That will be good for Russia, but it will also be good for the City and the UK, because if they do well, we will do well, and if we do well, they will do well.
David Wootton is Lord Mayor of Canada.