11 Sep /12

Trading and translating in Russia

russian translation serviceRussia’s entry into the World Trade Organization has been a long time in coming. On 22 August the wait was over. After the longest accession negotiations in its history, Russia finally joined the World Trade Organization. The political and economic implications of Russia’s inclusion into the WTO can hardly be overestimated. For more than a decade, the world’s seventh largest economy was the only member of the G8 group not in the WTO and Russian economists are hoping for an economic boom in the near future sparked by the new opportunities opened up by the nation’s WTO membership. Indeed some optimistic voices among Russia’s political elite are already forecasting an economic miracle for Russia comparable to the unparalleled rise of the Chinese economy following its accession to the WTO. However, objective observers of Russia’s economy are less optimistic about the immediate impact on the Russian economy.

First, the current economic climate is very different to the situation in 2001. Russia lacks the strong manufacturing base and low wage structure that drove the fast growth rate in China and the resulting export surplus. Most experts thus agree that the much more commodity-based Russian economy will struggle to perform a comparable economic miracle. Pascal Lamy, Director General of the WTO, describes Russia’s entry into the WTO as a “tidying up of loose ends” rather than a “big bang accession signaling a pivotal moment in the history of globalization.”(i)

Second, Russia is still considered by many outsiders a tough place to do business. But in joining the WTO Russia is making a commitment to bring its trade laws and practices into compliance with WTO rules and other measures liberalizing the markets. In the process, it could well take a major step towards liberalizing trade, creating a more attractive market for foreign investment.

While the economic effects of becoming a WTO member might not be as immediate and dramatic as some Russian politicians hope for, the introduction of new regulations and the increased interest of foreign investors will undoubtedly benefit many other industries, especially in the service sector. One of these ancillary beneficiaries of Russia’s opening to the West is the language service sector. 20 years ago, the Russian translation industry was dominated by translations of a political and technical nature as the fall of the Soviet Union created a host of new political and legal situations that involved dozens of cultures and their languages. In the last decade, translations for the oil, gas and energy industry, along with chemical translations were in high demand as energy-rich Russia began to expand its supply of the energy-hungry Western European countries and immense pipeline projects traversed half of Europe. These enormous projects needed multi-lingual planning, construction, and financing.

Now, as a result of Russia joining WTO, a significant increase in translation volume can be expected, in particular in areas such as B2B Russian language translations for documents related to mergers and acquisitions, investments, joint ventures, assets, tenders, and marketing analyses. The question is whether the Russian translation business is equipped to handle the imminent challenges to its environment. Of course Russia has a number of reputed and established local translation service providers. However their number is fairly low considering the size of the existing market and its growth potential. Furthermore, the Russian translation service industry is considered underdeveloped and lacking the rigorous quality standards of international competitors. As a result the industry may well suffers rather than benefit from the effects of globalization due to the fact that corporations are more likely to outsource Russian translation and Russian localisation projects to international multilingual suppliers rather than establish direct relations with a Russian translation firm or Russian freelance translators.

If Russia’s translation industry wants to benefit from the new opportunities that will spring from the country’s WTO membership it will have to facilitate investment, employ trained specialists, accelerate the modernization of their software and localization equipment and, most important of all, establish measurable quality standards that can compete with international competitors.