IMPACT OF GLOBAL FINANCIAL MELTDOWN ON INDIA: PUBLIC RELATIONS PERSPECTIVE

Dr C V Narasimha Reddi
Editor, Public Relations Voice

Two economic earthquakes that hit the world have not only shaken the economy of all the countries including India but also affected the stakeholders such as shareholders, employees, customers, investors, and regulators. Credibility of financial institutions is in a great crisis.

The Global financial meltdown in the United States of America was the first economic earthquake that resulted in the bankruptcy of many investment banks like Lehman Brothers, American International Group etc. As we are in the era of Globalisation the bankruptcy of American banks, financial institutions have globally disturbed many banks, financial institutions in Europe and other countries including India. If US Government came forward with a recovery package of 700 billion dollars, Indian Government also announced economic stimulus packages as to increase the liquidity of banks and remissions in import and export duties.

The second economic earthquake that hit India in which Rs.7100 crore Hyderabad based Satyam Computer Services fraud, the biggest in the world surfaced. Can we imagine that Rs.5040 crores were shown fictiously as if cash in hand and in banks and dubious deposits worth crores of rupees were created? All these falsifications were nothing but to show profits and gain share value.

Globalisation:
What is globalisation?
Globalisation is the integration of trade, finance and information into a single market. It has both advantages and disadvantages. However, the Global financial meltdown is not only confined to US but it has spread all over the world including India. What is the impact of global financial meltdown on India?
· Experts in the economic field feel that 2009-2010 would be a different year for India.
· The GDP growth that was expected at 9% has come down to 7.1%
· There has been a credit crunch. The liquidity of banks has come down to provide credit facilities
· Low occupancy in hotels, airlines
· As many as 1600 subhiksha outlets are being closed
· Outsourcing has come down. Even US President, Barrack Obama cautioned his country that their companies must reduce outsourcing
· Our imports and exports were adversely affected. About 20 lakh people lost jobs and another 10 lakh are like to lose jobs
· About one-lakh H1B visa holders of India in US are in distress
· Stocks have become cheaper and shareholders have lost their share value
· Over dependence on IT sector has caused damage to India. We should have equally developed infrastructure

Crisis Public Relations
In any crisis, more so in a financial crisis when all stakeholders are affected, the importance of public relations communication increases to inform, educate and motivate the public and their role in solving the crisis. Public relations is the chief window of the organization through which inflow and outflow of information is managed.

In this financial crisis the role of public relations is four fold –
(1) To respond immediately to the media as to provide full information on crisis and also on salvage package
(2) To respond to the problems and aspirations of the affected employees. As many as 53,000 employees are involved in the Satyam computers scam
(3) To respond to shareholders, customers, suppliers, dealers, Government regulatory bodies.
(4) To make an assessment of the readers of the media, employees, shareholders and customers and keep the management informed so that policies could be evolved based on the pulse of the corporate public

In such crisis, what is the role of public relations professional? He should have been equipped with a crisis public relations plan for immediate implementation.

The basic principle in crisis public relations is “Expect the unexpected”. The following are the 10 point crisis public relations (1) Prepare crisis PR plan; (2) Prepare advance background information (3) Manage inside and outside two way information flow (4) Establish a crisis information center (5) Effective media relations (6) Issuing press releases giving official version (7) Project relief, recovery, rehabilitation measures (8) Crisis is no longer local, always local (9) Accuracy in information (10) Prepare a case study for future.

But in the present global financial meltdown, the public relations professionals have to acquire certain skills required to manage business and financial organizations.

Do you know? What SKILLS CEOs are now looking from their Chief Public Relations Managers or Chief Communication Officers? It is a big challenge. This challenge has to be converted into an opportunity to meet the present global financial crisis.

Authentic Enterprise H.R. Company asked FORTUNE 100 CEOs as to what skills they were looking for from their chief communication officers? The CEOs said: That communication skills were no longer enough – everybody has them or should have. The CEOs made no mention of online media or social media. But what CEOs said: They are really looking for ‘business savvy communicators’ who have a detailed knowledge and understanding of the company’s business, be its markets and its finances.

If you don’t understand the intricacies of the business you cant represent the company to the outside world. This is a challenge for PR professionals.

What is needed today? You need to brush upon your business marketing and financial skills to communicate well.

It is high time for PR professionals to put away their aversion to finance and learn how to speak (1) The true language of business (2) The language of money (3) The language of credibility.

Those who master this new world order of business and finance will be rewarded with enormously in terms of pay, prestige, recognition and advancement. The notion of the communications officer (generalist) who lacks strong financial understanding will die out.

Great wall of China between internal and external publics keeps two sides dark. With new skills these two paralleled lines, which are separated, must now be linked and coordinated for better understanding.