The UK's EU referendum. Brexit or stay in?

After Greece has failed to claim their independence from the EU currency, another problem has emerged: the United Kingdom wants to leave the EU. The secession of the United Kingdom from the European Union, often shortened to Brexit will have consequences not only for the island nation: the whole world economic growth is in danger now. Only Britain itself will face budget deficit more the 30 bln. euros for next 5 years if vote to leave and GDP growth expectancy will be cut by 1% for the next years. Why it's so important for Britain to leave? Let's look closer

Payoffs

During the last decade Britain is suffocating of migrants. Being a rich country, it's become the most popular destination for the migrants from Baltic region and Eastern Europe (particularly Poland).

A8 coutries - Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Slovakia and Slovenia

The number of non-UK citizens living in UK hits 5 million. Because of the EU laws all of them are eligible to apply for any kind of financial help from GB government. This means that country faces growing pressure on public finance system as a whole. 

But at the same time, there are more than 1,3 mln. UK citizens living in EU countries.

All of them facing uncertainty if the Brexit will come true. We can expect them to appeal for citizenship in the countries they are residing now.

Attempt #2

Is this the first time Britain wants to leave? No. Once the nation decided to join the ECC in 1973, then the referendum of leaving the ECC was held in 1975. That time British people decided to stay within the EEC (more the 67% of votes were in favor of  EEC). 

What is the possible turnout for the 2016 referendum? 
As we see of the left, remain and leave campaing are like a rollercoaster with its slides. No one can now predict the possible outcome. But all the voices in EU are united at if UK will vote to break from EU, there will be no chance for Britain to enter the union again.

Losses and casualties

       It's been 4 days since Joe Cox, British MP was stabbed and shot dead. She was just 41 years and also have 3 children. The incentives for a such harsh crime are still unknown. But she openly supported the remain campaign and this fact has dramatically changed the situation: polls following after this accident shown that remain campaign is slightly ahead.

       Another loss for British economy is the exange rate of their currency. English pound hits in lowest since the 1985 and possible secession can cause further decline of the british pound by 20%. But because of the latest polls, pound risen up to its highest since the referendum was announced.

Cameron and supports "StrongerIn"

       Amid fear of further political integration with EU, Britain was concerned of its independence. That's why Cameron came to Brussels to sign a deal for a special status of UK in EU. If this deal was not signed by EU President, this would mean the Cameron would be a leave campaign supporter.
What advantages are provided for UK after the new deal will come into force? (the new deal will come into force only if Britain will stay in)
1. UK is recongnized as an independent country is not commited to further political integration
2. UK is to limit the access of newly arriving EU workers to non-contributory in-work benefits for a total period of up to four years from the commencement of employment
3. Feasible burden reduction targets in key sectors, with commitments by EU institutions and Member States
4. Britain will not be required to fund euro bailouts and will be reimbursed for central EU funds used to prop up the euro
All of this makes Britain a special member. The main problems are now eliminated. But no one could prevent the referendum on 23th of June, 2016.

Weak Europe is an advantage for Russia

        As tention is high caused by sanctions imposed on Russia, the government of Russia is more likely to see the leave decision of british people. Firstly, this will impact on other countries which cannot agree with european migration politics and harsh economic policy (it's a common rule for all Eurozone countries to have no more than 3% of  budget deficit). Some indebted countries like Portugal and Greece can hold the next leave campaign if UK will succeeded to dissociate itself from EU.
       All of this and the disputes on Russia's sanctions will weaken Europe giving Russia a chance to use its influence to reach the goal of lifting sanctions, but not by all countries. The key problem is that the success of such sanctions is that whole Europe is unted in terms of sanctions and the consequences for russian economy is significant. 

Bright future within EU

If Britain will vote to leave, the economic uncertainty will be very high. Treaties adopted by UK as a EU member then should be resigned. But anyway, they will stay the same in order for Britain to be a trade partner of EU. Then, british goods and services will face additional charges and taxes making them even non-competitive. It's a lose-lose game for Britain and EU. According to the latest polls, the remain supporters are now in majority. Hope this trend will remain. It's just 1 day before the referendum. Let me express my political views:

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G7: Anti-russian rhetoric continues

    On the 26th of May 2016 the two-day annual G7 summit has taken place in Japan. Among the attendants there were the leaders of Germany, France, Italy, UK, USA, Canada and Japan. All these countries imposed economic sanctions in 2014 when the Crimea had been annexed. Russia was suspended from the then G8 in March 2014 over the annexation of Crimea.

      Some political analysts critisized G7 for their stance in terms of Russia. They emphasised that the dialogue needs to be continued in order to maintain the partnership in political, economic spheres. And this has happened: after 2 years the G7 leaders admit the importance of cooperation with Russia, but they aslo agreed to keep the sanctions until the Minsk peace agreement will be fully implemented. What does this joint statement means in the long-run?

Russia-Japan

          Let's first look at the Russia-Japan relations. Japan started to normalise the relationship with Russia. But what's the reason? The reason is the China's influence on Russian political and economical views can hurt Japan. Being one the major economical partners for Russia, China has taken advantage of bad relationship of  Russia and Japan. Now, Japan wants to take back what it's lost. Shinzo Abe has visited Russia and now waiting for Putin to come in near future. The main goal for Japan is to solve the Kuril islands dispute. A bargain for Russia will be the perspective of lifting the sanctions. The possibility of giving the russian islands to Japan is very high now.

Russia-Germany

Ties between the leading country of Europe and Russia has worsened much since the 2014. Being one of the major partners in 2012, Germany experienced the severe decline in trade with Russia:

"Compared with the record year in 2012, German exports to Russia have fallen by nearly half in the past three years from 38 billion euros ($42 billion) to 21 billion euros"

    But Angela Merkel is convinced that imposed sanction should be kept until the Moscow will implement the Minsk Peace Agreement. On the other hand, a new interview with  Germany's foreing minister Frank-Walter Steinmeier was in April 2016 named "Time to talk". This is the most interesting exerpt:

Don’t we have to get Russia involved again on the international stage?

We couldn’t ignore their flagrant infringement of international law and just proceed with business as usual. But for me the question of getting Russia involved and entering into dialogue is a matter of principle – not situational. I am absolutely convinced that, especially in difficult situations, you cannot play the isolationist card. Recent history does not provide many examples of isolationism and exclusion helping to bring about a political solution.

 We can see, that something will change soon. Germany is tired of isolation of Russia.

Sanctions will be prolonged in June

No matter what happens between Russian and other countries, G7 stays united in the question of sanctions. This is the joint G7 statement:

“We recognize the importance of maintaining dialogue with Russia in order to ensure it abides by the commitments it has made as well as international law and to reach a comprehensive, sustainable and peaceful solution to the crisis,” the declaration said. “ However, we also stand ready to take further restrictive measures in order to increase cost on Russia should its actions so require.”

As we see, G7 warns Russia to impose new restrictive measures  in order to achieve the success of Minsk agreements. But this will not happen, I guess. Within the EU some countries like Hungary, Italy, Greece are against, but their voices will not be heard until the majority of EU countries will stand against sanctions.

Russia is not discouraged

         Today, on 27 of May, Russian PM Medvedev gives orders to prepare to extend food embargo to end-2017. This will help the russian agrarians to plan their investments in a long-term perspective, he says.  Does that mean that even inspite of lifting sanctions by EU countries, Russia will not dismiss its food embargo? If so, we can expect sanctions to be in place until the 2017. At the same time, I guess the G8 will be revived soon, because the willingness to have a dialogue with Russia is a common stance for all countries within G7, except UK and Canada.

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Automobile industry crisis in Russia: the brands we have lost

What's happened to car sales in Russia?

     It's an open secret that Russia's economy has been passing through the tough times since the sanctions were imposed and oil prices dropped. The overall decline of economy in 2015 is 3,6% (acc. to official stats). Russian currency devalued more than twice since the December, 2014. Weakened rouble affected the whole country: an inflation has risen above 10%, import of goods and services dropped dramatically. But what business suffered most? - Automobile industry.

       Car market in Russia was one of the most dynamic emerging markets in the world being in one row with markets of Brasil, China, India. But world economic crisis (2008) has changed the trend: in 2009 Russia experienced the harsh downturn of car sales. To support government automobile manufacturers, as well as international ones, ministry of economic development introduced subsidized loans for buying a new car. Interest rates became low - from 4 to 7% (the average interest rate for bank loans in Russia in 2010 exceeded 20%). This helped a lot: car sales started slightly to improve

        December, 2014 had been watershed moment: before the devaluation rouble which influenced on prices of automobiles, consumers caused booming demand making a purchase that they wouldn't do if russian currency was stable. The result was amazing: sales of automobiles in December, 2014 was the record reaching 280 000 cars per month. Among leaders of sales in 2014 were:

         After such increase, car market experienced its worst downturn since 2009. According to statistics, in 2015 sales in Russian Federation fell by 43% from previous year. But devil is in detail. Lada admitted drop of sales in 2015 (-46%), but at the same time Kia (having a budget car model - Rio) had a smaller decline (-9%), as well as Hyundai (-8%). Moreover, premium brands rose: Cadillac (+15%), Porsche (+2%). This dynamics show that wealthy people have no problems with buying a car: their income in still high enough to afford a luxury automobile, even despite of fact that the prices have doubled since the 2014. But middle-class moved straight to a poverty line, that's why the demand for budget vehicles fell down. The consequences were disappointing: some brands decided to halt sales and to wait until the situation improves.

Brands that we have lost

         Opel and Chevrolet. GM announced they would leave in March, 2015. Many experts consider this act as a sign of deepest crisis, if such a giant company leaves. Many car makers in Russia were ready for losses, but no one expected GM to be one of the first sacrifices. This has affected on job market: factories closed in St.Petersburg and Kaliningrad. Opel and Chevrolet now sell out their stocks and then will dispose of its headquarters in Russia. In 2014, market share of GM was above 7,6%. This means GM has reached significant presence in Russia and can afford itself to have two or more years without profits. There were some thoughts that this decision has a political background: some experts suggested that USA government has forced GM to cut economic ties with Russia. Nobody knows exact reason, but many agreed that it's cheaper for GM to stop sales of Opel and Chevrolet rather than to continue to work in Russia.

    Another brand which struggled from devaluation of rouble is Seat (the branch of Volkswagen Group). Spanish car manufacturer abandoned Russia even earlier than GM, in October, 2014. It can be curious that Seat left russian market for the 4th time. Hope they will return back soon.

   While Kia and Hyundai are doing well, another korean brand SsangYong claimed they will leave right away after GM announcement. This decision was hard to accept for company, which biggest market in 2014 was Russia.

       Nonetheless, there're plenty of others we'll be missing: american Chrysler and Dodge, taiwanese Luxgen, chinese Geely, Great Wall and JAC. 

      Those who stayed are desperately trying to optimize its expenses in order to save profitability. Only in 2015, 47 car models are no longer available for sale. Amongst them are Subaru Impreza, Skoda Roomster, Hyundai Genesis, Kia Cerato, Honda Accord, Pegeout 107, Mazda 5, Audi TT. 

The next outsiders are expected: Pegeuot and Renault sales dropper more than average in 2015.

Growth inspite of the overall decline

       As a consequence of high Gini coefficient (41.6) in Russia, luxury brands have note experienced any hardships. Moreover, their sales grew rapidly in 2015. Luxury cars (above 2 mln. rur.) sales risen by 95%. . The leaders are Mercedes-Maybach, Rolls-Royce (+40%), Lamborghini (+9%), Cadillac. Most of such cars were sold in Moscow and St.Petersburg. In January, 2016 Ford grew by 25%, as well Lifan (+63%) and Suzuki (+25%). But situation hasn't improved yet: crisis is still here.

Prospects for car industry in Russia

      After a collapse in car sales in 2015, 2016 is expected to have a slight recover. Experts claims by the end of this year, automobile market will rise by 3-4%. Because of volatility, this forecast is considered to be approximate. Some dealers of cars has not reflected on new decline of russian currency in the end of 2015. This means that prices will rise further and sales can drop. There are several scenarios:

• Neutral. Prices will rise by 20-30%. Sales will fall more by 5%. 
• Pessimistic. Prices will rise by 35-40%. Sales will drop by 10%. New brands are expected to leave. Among them are Peugeot, Renault, Subaru.

      As you can see, there's no optimistic scenario because no one believes that sales will grow.
Russian authorities promise to spend more than 50 billion roubles of transfers in order to support the market (it should be used as subsidiaries for bank loans and direct support for russian car
manufacturer "Lada"). 
                                                  Since sales of new cars has been insufficient for growth, market of used cars felt only by 20% in 2015 (new cars sales felt by 43%). It's a sign that consumers demand moved towards used cars. In 2016, market of used cars will rise by 10%. Customers are intended to save their money and their choice became more rational. All the statistics shows that russian automobile market will recover only in 2017.

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Uber versus government. What will win?

What is Uber?

Being founded in 2009, after 6 years of expansion, Uber application has become one of the major world taxi providers. The principal distinction from traditional taxi drivers and taxi companies is that Uber mobile app allows consumers with smartphones to submit a trip request which is then transfers to Uber drivers who use their own cars. So we see that this service has no mediator between client and taxi driver. All of money is processed through credit cards avoiding use of cash.
This scheme is set to automatically take charge for every trip an uber driver has accomplished. Uber is regulating its pricing automatically considering all the aspects of territory. Price depends on time, season, traffic jams and even weather (when it was a snowstorm in New York in January 2013, the price for 1 trip goes up to $200). This means that Uber is trying to sit on two chairs: from one point it wants to help drivers to earn more money; from another point Uber is set to be a taxi discounter with the lowest prices in the region of presence.
According to the last statistics of CNN, by Feb. 2016 Uber:

1. Capitalisation is $51 bln.
2. Just 6 years old
3. Uber has tested delivery of Christmas trees, food, pets by cars
4. Median annual income of Uber driver in San Francisco is more than $74.000
5. Uber uses not just cars: you can call for a boat in Amsterdam,a helicopter in New York (damn, I want this feature to be available in Moscow), an yacht in San Francisco
6. It employs Surge Pricing scheme

        Originally from USA, Uber in 2015 covered almost half of the world (look at a map above, red colour marks Uber's coverage).
        In February 2016 Uber has changed its logo causing outrage throughout the Internet. Even CNN said that its new logo is not as conceptual as ugly and mislead users (in fact, marketing books advice to change logo step by step, not totally like Uber Inc. did).    

Uber in Europe

The first country being chosen by Uber for the start in Europe was France. In December 2011 app was launched in Paris. Then it spreads all over Europe step by step. Among the cities where Uber was working were Brussels, Amsterdam, Geneve, Oslo, Praha, Rome, London, Lisboa and other capitals of Europe as well as other major cities. 
Traditional cab drivers hate Uber for its pricing strategy, because when Uber hits the city, drivers are forced to decrease their prices in order to stay competitive in comparison with Uber tariffs. Moreover, the prices after decrease become low too for to earn enough for living. That causes many protests in european cities demanding from government to ban Uber. The biggest protests stopped major highways of Paris, London, Madrid, Barcelona, Berlin and paralyzed traffic. Courtney Love Cobain has passed through protesters in Paris. That's what she said: 

   The voice of protesters was heard and governments started to crack down on app. For example, it was revealed that Uber used tax evasion schemes: 

The Guardian: Taxi associations claim Uber routes its payments through headquarters in the Netherlands to minimise its corporation tax payments in France, the UK and Germany – in a similar manner to Apple and Starbucks, which have found themselves in the firing line for the practice.

The results of such investigations and protests is well-known: Uber was banned in many cities. On February, 2016, according to Wikipedia, UberPop app (which is known for its hiring people without licence) stopped its activity and lost legal status in Brussels, Berlin, Frankfurt. It was banned on the whole territory of Italy, Romania, Bulgaria.
Only in US Uber has faced more than 179 lawsuits by the end of 2015. Uber expansion toughens as many countries are trying to expel it. Being backed by Google (its largest investor is Google), Uber is no more afraid of prosecution and in spite of the pressure in Europe and US is set to grow by covering more cities (by the end of January, 2016 it covers 378). 

                                         Uber in Russia

In June, 2013 app was launched in two major cities of Russian Federation: Moscow and Saint Petersburg. Then it spreads to Rostov-on-Don, Sochi, Kazan, Yekaterinburg. As taxi industry is slightly regulated in Russia, Uber has gained power and popularity. But in 2015, european scenario recurred in Moscow: there were protests demanding to ban Uber. The situation is the same: licensed drivers can't compete with Uber illegal drivers. 
        Moscow authorities announced an ultimatum: Uber Inc. must sign an agreement with government confirming that corporation is ready to share with government its cars' activity on the roads of the russian capital and also making a promise to employ only drivers with licence. Otherwise its activity will be halt in 1 month. Such agreement has already signed other taxi apps: Yandex.Taxi and Gett(former Get Taxi). But Uber is not intended to sigh an agreement soon: it emphasises that corporation operates in more than 68 countries and signing the documents is a long procedure. But there's no other way: Uber will arrange with Moscow authorities. And then it will continue battle for the market share in Russia and nothing can stop it.

Uber wins.

Uber is changing taxi market: traditional cab drivers will be ousted and will work under the taxi aggregators like Uber, Yandex.Taxi, Get Taxi and others in near future. This tendency outlined in 2010 since the first launch of such aggregators. Uber relies on technologies and traditional drivers can't compete with it: the corporation is investing huge amount of money on research and its strategy is aimed to get rid of "common" chauffeurs. If Uber will accept the demand of governments all over the world to tighten its policy and hire only licensed drivers, the major problem will be solved. Being a rich company, Uber can afford to pay millions for lawyers and lobbyists in order to protect business. Only in US, company has hired at least 161 people to lobby for its interests. In Sacramento alone, Uber spent $475,000 over five months to influence California lawmakers. In October, 2015, Uber wins court case in London. 

The Verge reports that Uber is successful at using public support and in June, 2014 has shut down one state regulator within 48 hours:

The Verge: Uber used common political advocacy tactics to generate public support for its business.  It was able to provoke hundreds of people in Virginia to complain to the Department of Motor Vehicles commissioner responsible for shutting its business down. Then, it sent its team of lobbyists to meet with aides of Virginia Governor Terry McAuliffe. Within 48 hours, Virginia's transportation secretary told the DMV to leave Uber drivers alone — meaning the company was successfully able to leapfrog regulators.

         Anyway, the new era of taxi has come and I'm confident that Uber is more likely to survive in this competition because of its advantages: data-driven business, credit cards for payment, many drivers and cheap prices help the company to stay competitive. Traditional cab driver now should choose whether to switch to Uber or to be ready for unemployment.

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Is Schengen zone agreement under a threat and will soon disappear?

Firstly signed by Benelux countries (Belgium, The Netherlands, Luxemburg, West Germany and France) in 1985, now Schengen Area consist of 26 (2015) countries covering almost 3/4 of all European Union's territory. The chronology of members (sorted by date of implementation):

1995: Spain and Portugal join.

1997: Austria and Italy join.

2000: Greece joins.

2001: Denmark, Finland, Sweden, Iceland and Norway join.

2007: Czech Republic, Estonia, Hungary, Latvia, Lithuania, Malta, Poland, Slovakia and Slovenia join.

2008: Switzerland, Lichtenstein join.

2016: Cyprus, Bulgaria, Romania and Croatia are expected to join.

      Initially the treaty was signed to facilitate the economic development allowing qualified labor force to cross the borders of countries without special permission. The only thing need was the citizenship of any country signed the Schengen agreement. Also Schengen Area was established to provide the common visa policy. 

      Now in 2015, after the greatest influx of migrants EU ever was exposed to, the gap in Schengen Area was found. Members of the treaty have found that external borders of Area are not sufficiently protected to stop the illegal migration in Europe which is suffering from migrants fleeing from war and crime in Middle East. Refugees ultimate purpose is to enter the Schengen zone. In 2014 the migration route from Syria was:

Syria->Turkey->Greece->Serbia->Hungary

After entering the territory of Schengen Area member migrants scatter around all the Europe. 

But Hungary (heading by PM Victor Orban) decided to prevent any migrants from coming to country by building a 3-meter fence. Then EP members blamed hungarian Prime Minister for violation the convention concerning the insurance of safety for those needed. But Orban said that 4-million populated country can't cope with the flow of 1 million migrants. Security forces of Hungary can't ensure that country will not be exposed to crime migrants potentially can do. Also ISIL made a statement that they sent their militants to EU as refugees in order to carry out terrorist attacks on EU countries. The fence near the northern borders of Hungary has changed the route of migrants seeking the asylum. Now it's as described on the picture (left side).

 Most of migrants are coming to Germany (nearly 1/2). But it has become the problem of all European countries. The first sign of Schengen crysis was the decision of Germany to re-establish border control in September 2015. After Paris attacks in October 2015 France did it as well. Then this action was done by Austria, Sweden and Denmark. Rumors said that after desperate discussions suggesting to protect borders of Schengen zone The Netherlands started to negotiate with Benelux countries to make a new Schengen-like area.

        Terrorism has become one of the biggest issues in Europe since the ISIL has proclaimed itself in 2014. This threat pushes countries forward to undertake the measures to protect the citizens from attacks. One of the solution is to secure national borders. I think that if border control will be in force there would be a higher chance to arrest Salan Adbeskam - one of the suspected in terrorist attack in Paris on October 2015. What heated the atmosphere is that terrorists came with the migrants coming from Middle East.  

      

What can save the Schengen?

        After some analysis EU has decided to start negotiations demanding from Turkey to establish the border control with EU and Syria to stop illegal migration and human trafficking. Also EU asked Ankara to accept migrants and to create the facilities to provide the basic standards of living for refugees. In return Brussels announced the financial support for Turkey to meet wants of Europe and also promised visa-free policy for turkish citizens in 2016. This actions seemed to be appropriate in accordance to the desperate situation.

        Also investigations should be started to arrest human traffickers. Most of illegal refugees have reached Europe with the help of traffickers paying them more than €2000 per each person making it a huge business for those who involved.

     Furthermore, EU should provide an extra financial support for countries protecting EU and Schengen zone' borders. Among them are Italy suffering from african migrants crossing the Mediterranean and of course Greece - the first country of EU and Schengen lying on the route of migration from Middle East. Spending more money for security can help Athens to cope with the influx of migrants. But there aren't enough number of security forces. EU policy does not have the treaty of common military forces or peacekeepers: for allowing ones country's forces to help another country needs to be approved by national parliaments of both. So now Greece being the first european frontier is one-on-one with refugees.

Is it important to save the Schengen Area?

      There are a lot of politics expressing their concerns about existence Schengen in such situation. Europe is very slow about re-evaluating its basic agreements. But evolution is what push changes and Schengen needs to be reformed in order to exist. I think that border control is not the biggest problem for europeans facing the possibility disappearance of Schengen. The common visa policy was the initial problem Schengen treaty was aimed to solve. And until the common visa policy exist the Schengen should present. Disruption of such basic value of EU can cause the further actions damaging the Europe as an institution based on elimination barriers and aspiring to create a giant commonwealth.

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A nightmare for women in Cologne, Germany

         As Russian TV channels are broadly observing the situation in Cologne, Germany, russian people are deeply concerned by the behaviour of men tried to abuse german women on New Year's Eve. It's seems like the nightmare when you're out in street celebrating and then someone surround you in attempt to stole you mobile phone and even rape you.

        The boiling point is that the most of those attacking women were migrants waiting for permission from the state allowing them to live in Germany. That produced much anger within the german society and around the Europe as well. Such accident in Cologne took out people into the streets demanding stricter laws for immigrants forcing Angela Merkel to express her own opinion on such mass protest.
And she commented: 

"When crimes are committed, and people place themselves outside the law... there must be consequences," she told reporters after the meeting.

Under current German laws, asylum seekers are only forcibly sent back if they have been sentenced to at least three years' imprisonment, and providing their lives are not at risk in their countries of origin. Now Bundestag will consider to sent migrant back for any violation of law.

          I'm afraid that such incedent like in Colongue can deepen society division regarding immigration policy. And as new wave of anger PEGIDA has held a new protests which seems to be massive. Gestures of people in this crowd doesn't look very friendly toward the counterparts protesting against PEGIDA.
 To express my own thoughts I should say that such violations like on New Year's Eve should be considered not as a mistake of refugee policy but as a mistake of policy office in Cologne. Protection of people was insufficient. There should be more policemen managing the order in the streets. At the same time Merkel should make the law stricter for refugees violating the law. They must be sent to their places of origin. And german government should promote law restrictions for refugees because the perception of woman's nature in Arabic countries and in Europe is much different. I know that Merkel will satisfy the society by stricting laws. But will that prevent migrants from violations? I guess no. Because if they have nothing - they have nothing to lose. And it's a very dangerous situation. Germany should concentrate its efforts on assimilation of refugees giving them job and a place to live. Only then migrants will appriciate the hospitality of Bundestag. 

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Public Relations Trends: Understanding the Profession and Practice

Hello and welcome again. Here's my new work for coursera.org MOOC. I want to share it with you

1. Please look up media references to Public Relations in the country where you are currently residing. What is the term used to refer to Public Relations in the media? (5 points)

As I live and study in Russia, there are a lot of media trying to depict the profession of PR practitioner. But in our country term PR is used to refer to bad-quality promotion and mostly has a negative perception. As opposed to it, mass media depict PR as vital for big companies and even for government (as a part of social politics). But at the same russian media says that traditional PR has become outdated. For example, http://www.kommersant.ru/ says the PR has become a spam-machine because of the amount of press releases reaching for the editor’s email. And some of this PR practitioners are annoying at their follow-up after sending a press-release. Also kommersant.ru claims that PR has changed dramatically since it was established: instead of making text press releases you should monitor the agenda and integrate press-releases (filled-up with images and videos) in accordance with the daily agenda.

2. How do the media describe the profession of Public Relations? (15 points)

2 years ago the famous russian internet media “the Village” (http://www.the-village.ru/) has published a material in order to describe daily life of PR Practitioner. “the Village”  claims that the profession of Public Relations “consist” of infinite flow of information PR practitioner trying to cope with. PR practitioner should be communicative, confident about press-releases he suggesting for publishing and persistent with media neglecting almost 90% of suggested press-releases (as refer to statistics). In addition, “the Village” reports that because of dependency of PR practitioners on journalists of mass-media there’re some situations when these journalists force PR practitioners to make them gifts in order to visit the event or publish a particular release.

3. How do the media describe Public Relations jobs? (10 points)

We can see that PR practitioners have an average salary. USnews.com says writes that median pay per year is slightly less than $55 000.

Gerard Corbett, a chair of the Public Relations Society of America added that PR is booming now:

“Social media outreach has become an integral part of a PR specialist’s job in recent years. With the onset of social infrastructure such as Facebook, LinkedIn, Twitter and Pinterest, combined with the versatility of Web tools, the jobs of public relations specialists are growing at a fast clip”

The Bureau of Labor Statistics projects public relations specialists employment will grow 12 percent between 2012 and 2022. During that time period, an additional 27,400 jobs will need to be filled.

At the same time Business2community asks if PR is doomed by a shortage of journalists: there are roughly 5.7 PR professionals for every one journalist. But the answer is “No”: PR will only be doomed by our failure to adapt to the ever-changing media landscape, now and in the months and years to come»

4. How do the media depictions of Public Relations resonate with and/or depart from the definition of Public Relations we covered in the lecture videos? Please explain briefly with at least three similarities and/or differences. (30 points)

In MOOC Mohan Dutta said that PR is deliberate and data-driven. But statistics says that there’s almost 90% of press releases sent by companies are not published by mass-media. So, only 1 in 10 of press releases are relevant to media and agenda. This shows that PR is just under preparation to become data-driven.

Also, Mohan Dutta claims that PR practitioner is a mediator between publics and organization. Nevertheless, most of media is controlled by a third party. Therefore, the real mediator is journalist or editor-in-chief.

In addition, Mohan Dutta declared that successful PR practitioner should be conversant with data. I fully agree with him. There was a research that PR activities are successful only when relevant. To be relevant you need to work with data.

5. Based on your assessment of the media portrayals of Public Relations jobs and the Public Relations profession, what are the challenges facing the profession of Public Relations in the context of the country you are referring to?

            The main challenges in US are:

1)    Because of the disproportion (5.7 PR practitioner for only one journalist), PR practitioner should be flexible and quickly adapt to fast-changing PR industry. Those who won’t adapt will lose their job.

2)    Junior PR practitioner is not well-paid job. You need to be prepared to earn a few during the first year.

3)    The expectation of growth of PR jobs in not so good (only 6%). There many jobs booming now

4)    As a PR practitioner, you need to work even 24/7 to be on agenda. Not everyone ready for this. Actually many people will switch to another profession in order to manage better work conditions.

6. What steps would you suggest for overcoming these challenges to the profession?

             I think that PR industry is self-regulated. It means that those practitioners who cannot adapt will lose their job. Those companies struggled to adapt will lose their publics and will leave the market. However, newcomers that will be more flexible and innovative will replace such companies. This rule works for PR practitioners as well. PR in evolving, its effectiveness is growing. The only thing that PR practitioners need is to stay on agenda and learn more about future trends to be qualified enough.

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