LOCAL BUSINESSES NONPLUSSED BY G20
While the St. Petersburg International Economic Forum, held at the end of June, focused on bringing together global business leaders to discuss economic issues, the G20 summit is a forum for the world’s largest governments. The event in Russia is the main G20 event of 2013.
The agenda includes topics related to spurring economic growth through jobs and investment, trust and transparency, and effective regulation. Although the event is not expected to stimulate the local economy on as large a scale as the Economic Forum, there are some businesses that are expected to benefit more than others — primarily the hotel and security industries.
“The way in which business and the tourism industry in St. Petersburg are affected all depends on what type of event is being held,” said Yunis Teimurkhanly, general manager of Helvetia Hotel and co-owner of Swiss Center.
Many of the city’s largest and most prestigious hotels are reserving significant numbers of rooms just for summit participants. Tourists planning to visit St. Petersburg in early September are advised to book accommodation as soon as possible, or avoid the city altogether during the summit.
“The number of available rooms is rapidly dwindling for the period of the G20 summit, and we have observed an upswing in bookings for the beginning of September. Large numbers of rooms have been set aside in anticipation of the influx of visitors arriving who are directly involved in the event, in particular international media,” said Teimurkhanly.
Security firms are also expected to benefit from the summit, which will affect everything from personal security all the way up to an overall increase of security in the city.
“Areas where mass gathering are expected will be heavily guarded by police, so in general we actually expect a reduction in the number of alarms being set off,” said Andrey Afanasiev, CEO of the Rosokhrana security company.
“Several weeks before the G20, and during the event itself, each of the event venues will be armed with alarm systems. So we need to finish putting alarms in place before the summit starts,” he said.
In his opening address at the meeting of the G20 Labor and Employment Ministers and social partners, held in Moscow on July 18, and read by Maxim Topilin, Minister of Labor and Social Protection of the Russian Federation, President Vladimir Putin said: “Russia has identified stimulating economic growth and job creation as a primary objective of its G20 presidency. We consider these tasks a priority for the development of a modern society.” While this may refer to future improvements, local recruitment companies haven’t observed any significant changes in the market in the lead up to the event.
“Preparation for the summit has had no effect on our work or the work of our clients. It’s mostly a political event and it is the strategic developments and agreements made as a result of the summit that will affect us and the market in the future,” said Alexey Zelentsov, director of ANCOR, a recruitment agency for Northwest Russia.
The belief among most local businesses is that the G20 summit will only be of benefit to large international companies.
“The event doesn’t directly affect small- and medium-sized businesses. As always, however, local residents will be affected and should expect traffic jams and closed streets,” said Maxim Rot, the managing director of local construction company, Zhelezny.
“For the moment, we only anticipate the inconveniences that usually occur before and during large-scale events: Congested traffic and delays both in the city and at the airport. In general, however, small- and medium-sized businesses have limited expectations on how the G20 will directly affect them,” said Evgeny Bogdanov, the general director of Rumpu, an architectural, design, consulting and project bureau.
Construction projects will continue uninterrupted despite the upcoming summit.
“The G20 summit has not affected our work and we haven’t heard of any real estate projects that have been implemented especially for the event,” said Boris Moshensky, general director of Maris | Part of the CBRE Affiliate Network.
Despite the low expectations for economic growth for local businesses, all businesses have said that they believe the city will benefit overall from the exposure the summit will bring as it is such a prestigious event.
“It’s great that Russia can host such a large event on an international scale. What makes this even more satisfying is that the event is being held in St. Petersburg, not in Moscow,” said Bogdanov.