Much can be said about Volgograd, a Russian city located midway between the borders of Ukraine and Kazakhstan. During the Second World War the city, known then as Stalingrad and named after the Russian leader Joseph Stalin, witnessed the bloodiest battle in the history of modern warfare. Its unbreakable spirit while under attack earned Volgograd the praise of the Soviet authorities, who awarded it the title of 'the Hero City' and erected a 28-storey-high monument, which for decades was the largest statue in the world.

The unwavering pride and confidence of the city was once again in evidence in 2013, when the local authorities decided that, for six days of every year, the city's name would revert back Stalingrad. Given that Joseph Stalin is not a universally popular figure, both in Russia and internationally, it was a bold move.

Hidden potential

When it comes to FDI promotion, however, Volgograd is uncharacteristically shy. “Unfortunately, we have not been very active when it comes to being present at big trade fairs and promoting our region,” says Elvira Lagutina, minister of economy, foreign economic relations and investments of the Volgograd region. However, she says that since the region's new governor Sergey Bozhenov took office in 2012, the local authorities have been instructed to work harder on improving Volgograd's investment attractiveness.

“We want to be seen as a region that is open, effective and transparent in our relations with investors,” says Ms Lagutina. These are not virtues commonly associated with the Russian business climate, but Volgograd is looking to set itself apart from the rest of the country.

The city already possesses a lot of qualities that make it appealing to investors. It has more than 2.6 million inhabitants, straddles two strategic trade corridors, is home to 51 higher education institutions and has an industrial base focused on oil refinery, metallurgy, chemicals and mining. It also has a number of investment institutions – the Agency of Investments and Development of the Volgograd Region, the Coordination Board for Investment Projects, and the Volgograd Regional Investment Board – which have been established to assist potential investors.

Aiming high

With this new pro-business approach, Volgograd is hoping to tap into the large number of investors that are keen to invest in Russia's extensive domestic market but are cautious about operating in the country.  

Ms Lagutina is confident that local authorities will rise to this challenge. “We are keen to meet potential investors and assist them at all stages of the process of settling in our region,” she says. “We cannot just rest on our laurels and assume that businessmen will come here because of our [natural] assets."

Indeed, Volgograd has already made good on its promise to go the extra mile to court potential new investors. Delegates from the region participated in the 2012 Expo Real and 2013's Mipim, the two biggest property shows in Europe. Ms Lagutina believes that there is much more on the cards for Volgograd.

“We were selected as one of the hosts of the football World Cup in 2018. This will be an important economic [boost] for us. Hosting such a major sporting event means recognition, and [and a need to achieve] a certain standard of transport and hotel infrastructure,” she says.