The other day, the World Trade Center Moscow (WTC) became winner of two prestigious awards, and in a surprising role, too — as a designer and organizer of wedding festivities. “Wedding Awards,” Russia’s key award for wedding industry professionals, was bestowed on the WTC as the city’s best wedding venue, and “Global Event Awards” — for the “Sky for Two” project, in the “Year’s Best Wedding” nomination; the same project was earlier acknowledged as the competition’s biggest wedding in terms of scale, within the framework of a national award called “2015 Golden Puzzle — The Best Event project.” How the World Trade Center Moscow manages to mix traditional and new lines of business, Vladimir SALAMATOV, General Director of WTC Moscow, told New Izvestia.

— Vladimir Yuriyevich, the WTC Moscow has always been associated with large business events, with expertise in international trade, and all of a sudden it has become a considerable player in the event industry market. A somewhat surprising turn of events...

— Indeed, the WTC has traditionally been regarded as a venue for large business events. Every year, we host a few hundred of events on different levels, and they are not necessarily all business-like; they range from big Russian and international forums to corporate and private parties. In all that, we have always had a unique competitive edge, as those who take part in events can stay right here at a five-star hotel and make use of our catering services, which include restaurants and a banquet arranger. There is, however, a new trend that has manifested itself in the market. Customers are getting increasingly interested in the WTC’s opportunities, as we can provide integrated solutions and make arrangements for both business and entertaining events, all the way up to the content design. Moreover, we have started to get requests for unusual technical solutions, started to see desire to have something exclusive. Therefore, at some moment, our team began to think: why should we only provide a venue for events? What prevents us from adding event planning services into the package, as that way we would be able to offer a completely integrated product? Those reflections, alongside an analysis of our capabilities and the market situation, have led to setting up a new department of development and new types of business. One of its key assignments is event planning provided on a “turnkey basis.”. Within the framework of that line, wedding planning was detached and turned into a separate project called “Wedding to Come,” because wedding planning requires special professional skills, special creative competencies and ingenuity. Certainly, those two awards, and the acknowledgement that the WTC has gained as the city’s best wedding venue have become a pleasant surprise for us. I can say here only that the WTC does indeed have capabilities of organizing any technically and creatively complicated event. At the wedding that garnered the award as the year’s best wedding, the guests were able to visit both a real tropical beach and a skating rink in Russia at the same time. 

— New businesses and areas of development — is this a reaction to a crisis in economy?

— The economic crisis does not play a key role here. Any company, even one like the WTC, which has a 35-year history and an additional “seal of approval” in the form of membership in a few prestigious professional international associations, must develop continuously, look out for new opportunities, improve its work. All the more so as competition in our sector is quite extensive in Moscow. But, of course, crisis phenomena in economy also spur the search for new development areas. By the way, in Chinese, “crisis” is designated by two hieroglyphs: the first means a “threat,” “difficulties,” and the second means “opportunities.” So we follow Chinese wisdom, and engage all our opportunities. We constantly develop our four types of business, including office, congress, restaurant and hotel businesses. In keeping with market requirements and modern trends, we upgrade conference rooms, renovate interiors, implement new services and technologies. We also introduce advanced service tools. For instance, the “one-stop shop” approach facilitates selection and order of everything one might need for planning an event, from hotel rooms to a congress room to meeting rooms to restaurant services to parking to a culture program to domestic services. I would like to emphasize that success of any company depends, among other things, on enhanced quality of corporate governance, optimization of all business processes. We organize our work in a way so that all types of WTC businesses synergistically complement one another and generate additional income.  

— Unlike other multifunctional business centers, the WTC has promotion of international trade as a mission. In view of the implemented novelties, does this task still remain relevant for the WTC?

— By all means, it does. In addition to creating comfortable conditions for the work of Russian and international companies, we operate in multiple other areas. Those are training, analytical work, and involvement in promotion of the interests of our exporters in international markets. For instance, for a few years now we have been arranging workshops to train members of the business community and public officials of different ministers, teaching them to work under WTO rules, how to deal with dispute settlement practices adopted in that organization. This is necessary both to exporters and those who are engaged in regulation of external economic activities. We also handle expert evaluation in the area of international trade, take part in discussing issues and proposals within the framework of assignments given by the president of the Russian Federation and Russia’s government in promotion of Russian non-commodity exports. We have co-organized multiple conferences and round-table discussions covering those issues, in which representatives of ministries and agencies, businesses, chambers of commerce and industry, the Russian Union of Industrialists and Entrepreneurs, and experts took part. Last year, at the St. Petersburg International Economic Forum, we organized and held an international round-table discussion on new trends in global trade. This year, we have started collaboration with the recently established Russian Export Center (REC), which has been assigned to coordinate all efforts in financial and non-financial backing of exports. The president of Russia, in his address to the Federal Assembly, gave to understand that big expectations were associated with that important institute of development of our exports. Just recently, the REC held a conference on issues linked to support and development of non-commodity exports, and the WTC was partner. Speaking about the work related to advancement of our exporters in international markets, the WTC has an efficient instrument, being a member of an international association uniting 332 world trade centers located in 92 countries. The WTC global chain helps effectively establish international business contacts, promote Russian products and services for export, and on a high level, too. For example, in the spring of this year, using capacities available at overseas world trade centers, we organized a business mission to Taiwan, in which the leadership of Moscow’s investment agency took part. This past summer, we hosted at the WTC a meeting of representatives of the Moscow government with industry associations of Mumbai, the capital of one of India’s most active economic provinces.
— Over the past year, the WTC has become a prominent expert venue. Do you see the need for expert evaluation and analysis growing in the midst of the business community?

— Expert evaluation and analysis are the two functions performed by all international trade centers. Therefore, we actively promote that line of our business, all the more so because it is in demand not only among businesses, but also among public authorities, experts, media. It has been gaining importance especially of late, when improvement of the competitive edge and development of export potential, including that of the non-commodity export, has become a priority in economic policy. For instance, last year, we took part in drafting a report of a working group on competitive performance of the State Council. This year, on the occasion of the St. Petersburg International Economic Forum, Andrei Klepach and I edited a book entitled “Challenges of Competitive Performance in View of Russia’s WTO Membership.” Leading specialists in international trade, including those working for the WTC, took part in it. At the same time, we launched our own interactive portal, “Russia in International Trade,” which allows us to get a full picture of our export landscape, up to the share of various Russian products in the import structure of other countries. The WTC has an Expert Board, which has representatives of the Industry and Trade Ministry, Eurasian Economic Commission, businesses, and think tanks as members.
— Just recently, the WTC evaluated the impact of the new Trans-Pacific Partnership, with its twelve members, on Russia’s trade. What conclusions have been made? How real are the risks for our exports, if preferences take effect within the partnership?

— I would like to clear out one fact: the TPP is more than just a trade partnership, or a free trade area. It’s an agreement on a deeper mutual integration, both in terms of scope and depth of mutual preferences. The combination of all preferences creates what we at the WTC have called “a preference barrier” for other parties involved in international trade, including Russia. We have analyzed how significant that “preference barrier” can be so far as it concerns trade relations. Russia supplies lots of products to TPP countries, and it competes in the same positions with suppliers from the countries involved in the partnership. Lower or zero customs duties might affect the price competitiveness of Russian products in a negative way. To make our analysis, we have selected, for every TPP country, 5 to 6 biggest positions of Russian exports, which account for more than 5% of the total imports of that country (with the exception of oil and oil products), and thus we have been able to identify our competitors among TPP countries. It turns out we’ve got competitors in many product types. Those are aluminum, nickel, fertilizers, copper profiles and even crabs. However, the analysis of tariff protection in TPP member nations that we did afterwards showed that for most products we supply to TPP countries duties are low or have been even cut to zero. As a result, we’ve found out that the risk of seeing bigger competition and/or being ousted from TPP markets after the creation of the partnership is relevant for no more than 10 products out of a few dozen that we have selected. 

— What does the Russian non-commodity export look like? What are the trends there?

— The analysis made by the WTC shows that in the first half of 2015 non-commodity exports grew by 11% year-on-year in physical terms. From July to September, growth slowed down a little, but in any event, over the past two years, non-commodity exports have exceeded commodities not only in growth rates but in scope as well, in dollar terms. In the first eight months of 2015, non-commodity exports amounted to $127 bln, and commodities to $107.5 bln. EU countries account for nearly 50% of non-commodity exports, EAEU nations for 9%, and BRICS for 8%. But the most curious thing is that in 2014 Russian exports of non-commodity products made a bigger contribution to the national GDP than commodities — 13.9% versus 12.8%. An even more curious thing is that Russia’s ratio is better than in many countries with similar export structure. For instance, in Norway, exports of non-commodity products account for 11.7% of the GDP, and exports of commodities for 16.9%. In Australia, exports of commodities account for 9.2% of the GDP, and non-commodity products for 7.3%. We can agree that the processing depth and added value of most of our exported non-commodity products are insufficient, but, in any case, we are seeing an enhancement of our export structure from the standpoint of a better balance between commodities and non-commodity products. By the way, in certain sectors, we have seen a breakthrough in exports of hi-tech products. In the first eight months of 2015, dozens of industrial products can be identified in the non-commodity exports, for which stable growth of supplies has been seen over the past four years. For instance, microprocessors, household washing machines, polyester fibers, artificial joints. To expand those growth points in non-commodity exports, non-financial and financial backing of exports is important. Over the past few years, the government has been providing it successfully; it has adopted and is carrying out a “roadmap,” has set up institutes for development that operate. Now that the REC has been set up, all that work will have required synergy. And the WTC will also be making its best to contribute to development of Russian exports and international trade.