Never has the world appeared more like a global village. National
economies are now so interlinked that a financial setback in one country
can have serious consequences for markets thousands of miles away.
In these circumstances, is there a role for PR to play in bolstering
confidence in the financial markets? And who should be taking the
lead?
There is an argument that the International Monetary Fund (IMF), whose
role it is to loan money to countries to meet their financial
commitments, should be doing more. Its performance over the past year
has come in for some sharp criticism as it has ploughed billions of
pounds into bailing out the economies of Indonesia, South Korea,
Thailand and Russia. Should matters in Brazil worsen further, another
IMF-structured support package will be required.
According to IMF chief press officer Graham Newman: ’There are clearly
lessons to be learnt from the Asian crisis and the contagion that it
caused.
In this year’s annual report the IMF says it has ’stepped up’ its
external relations activities due to the ’scale of the Asian financial
crisis, its global reverberations and the IMF’s role at the centre of
efforts to manage and resolve the financial turbulence’. The document
also outlines the body’s communications objectives, which include
’helping influence economic policy in individual countries’ and
contributing to public understanding and support for the
institution’.
As reported in PR Week (4 September), the IMF has been talking to
agencies including Porter Novelli International, Edelman PR Worldwide
and Hill and Knowlton about conducting a global perception audit as a
step towards improving its image around the world. The need to put such
a programme in place is becoming increasingly urgent, as an agency
appointment is expected shortly.
The IMF faces a big PR task in convincing the very nations whose leaders
have criticised its performance to continue to fill its coffers. There
is also great resentment against the IMF among the countries it has been
bailing out. This is because, in return for lending money, the IMF
demands financial reforms - a task which requires both diplomacy and
skilfull media management.
The fund, which has 182 member countries, takes communication
seriously.
It has a vast external relations department of more than 75 people,
based in Washington.
Although the fund says its external relations activities have been
intensified over the last year, the PR drive has still not gone far
enough. For example, only 10 articles by IMF management and senior staff
appeared in major newspapers and journals over the year. Not a lot to
steady the nerves of a world cripped by financial uncertainty.
According to a consultant at one of the agencies pitching to handle the
IMF’s perception audit: ’They (the fund) are demonstrating a commitment
to transparency and communicating more, but they need to take control of
the agenda from a strategic point of view.’
One regularly missed opportunity to communicate more strategically is
the IMF’s annual meeting. Along with the World Economic Forum in Davos,
Switzerland, it is an event on the international financial calendar
which has genuine global significance. Finance ministers from around the
world schmooze with bankers, not only at the official events but on a
circuit of cocktail parties and receptions.
It is at these often ’lavish’ parties that big deals are cut, says Kerry
Underhill, head of corporate communications at Warburg Dillon Read and
therefore much of the PR effort is on organising these corporate
evenings and attracting the right people to them, instead of using the
occasion to present a united front on issues of global importance.
Due to its international nature the IMF is not the fastest moving of
organisations. But one financial PR agency head feels that it could
still do a better communications job. He says: ’If the IMF is meant to
reassure people in unstable markets that Armageddon isn’t round the
corner it is regrettable that it isn’t more punchy in what it says.’
NatWest group chief economist David Kern takes an opposing view. ’The
IMF can do a lot to improve its performance but its job is not
image-making,’ he says.
NM Rothschild group corporate affairs director James Murray agrees:
’While there is a clear need for unambiguous communications, it is more
a job for Governments.’
Although the Group of Seven industrialised countries has published a
statement assuring the world that it recognises the severity of the
economic situation, it is only comparatively recently, with the crisis
in Russia, that Western Governments have acknowledged that the problem
is not confined to Asia.
According to Financial Dynamics director Julian Hanson-Smith: ’The
difficulty in addressing financial volatility on such a scale is that
there are very few people whom the world will listen to.’
One exception is the chairman of the US central bank, Alan
Greenspan.
’His utterances and how they are construed have the power to move
markets,’ says Hanson-Smith.
PR may be able to improve the image of the IMF but there is little it
can do to resolve the world’s financial crisis. On a domestic level,
however, it is an excellent tool for calming the fears of home-owners,
those concerned about their pensions and other investors.
