Steve Rosenberg: Russian economic forum overshadowed by drone attacks on St. Petersburg
Steve RosenbergEditor-in-chief of BBC Russia
An evil wizard is the last person you expect to see at an economic forum.
But he stayed there working his magic.
With sleight of hand, the Russian folklore villain “Koshchei the Immortal” (or rather someone dressed like him) produced coins out of thin air, “broke” and reassembled someone’s glasses, and shocked passersby with occasional puffs of smoke from his fingers.
“Russians are unpredictable people,” he said. “We do things that no one expects.”
But in St. Petersburg this week, the unexpected was most dramatically caused by Ukraine.
The lasting image of SPIEF 2026 will be the immense plume of black smoke that dominated the St. Petersburg sky on Wednesday. Without specifying what was affected, local officials acknowledged that the drones had damaged “infrastructure”. All delegates saw the smoke as they arrived at the exhibition center on the outskirts of the city.
Few could have predicted what would come next.
Volodymyr Zelensky published an open letter to Vladimir Putin. The Ukrainian president taunted the Russian leader about his age and Russian setbacks in the war, but suggested the two leaders meet in a neutral country to discuss peace.
President Putin’s response?
Nothing unpredictable about that.
“It is not to the author of the letter that I must respond,” President Putin said, “but to our soldiers on the front lines… I say to them: continue, my brothers!”
Vladimir Putin is not ready to end Russia’s war against Ukraine.
No, unless it’s on his terms.
I listened to what he said during the plenary session of the forum. There were few surprises.
The Putin we saw is the one we expected: uncompromising, unrepentant, determined to project an image of strength and unwavering conviction. He tried to appear confident about the war and the Russian economy.
“There are wars and sanctions. But the economy is developing,” said Vladimir Putin. “Everything is stable.”
Applauded by entrepreneurs, friendly foreign dignitaries and civil servants, the Russian president, inside the congress hall, could present himself as an extremely strong leader.
His problem is what’s happening outside.
The massive battlefield losses Russia suffered in its war against Ukraine.
Ukraine’s long-range drones are now penetrating deep into the country.
At the forum where I asked senior officials about the war, their answers had one thing in common: they cited the Kremlin. A reminder, perhaps, of whose idea the so-called “special military operation” was.
“The war is in its fifth year,” I stressed to Alexander Zhukov, vice-speaker of the Duma, the lower house of the Russian parliament. “Do you think this will end soon?”
“I can only respond with the words of our president. He said that this situation must be resolved quickly,” the MP replied.
“Drones targeted St. Petersburg this week,” I recalled Vasily Anokhin, the governor of the Smolensk region. “And your area has also been the target of drone attacks in the past.”
“As our president says,” the governor began, “our enemies, unfortunately, are trying to harm us.”
The Russian economy is suffering. There are no signs of imminent collapse, but war and sanctions are creating considerable pressure. Growth has stalled in most sectors. Russian economists speak of “stagnation” and, in some areas, “decline”. The ongoing conflict is sucking up enormous resources, both human and financial.
On a recent trip to the Lipetsk region, small business owners told me they were struggling to stay afloat.
With its gleaming stands and big-budget presentation, the St. Petersburg forum presented a rosier view of the Russian economy.
“Interest rates are a little too high,” admitted Kirill Dmitriev, President Putin’s special envoy for foreign investments, during our intervention at the forum.
“We think rates should be lower for more investment. But the Russian economy has shown resilience over the past five years: something many Western analysts thought impossible.”
Even in a difficult economic environment, some companies see this as an opportunity.
“A few years ago, Russians went on vacation abroad,” businessman German Galperin told me, “but the situation no longer always allows this because of sanctions and because attitudes towards Russians abroad have changed.
“This encourages the development of modern tourist centers in Russia.”
Unlike the sorcerer “Koshchei the Immortal”, the Kremlin cannot extract coins out of thin air. This would certainly reduce the budget deficit if it were possible.
This did, however, attract the attention of some interesting forum guests.
“Greetings from your friend President Trump,” Rodney Mims Cook Jr. told President Putin in St. Petersburg. As chairman of the United States Commission of Fine Arts, Mims Cook Jr. oversees the controversial White House Ballroom project.
Russia trumpeted his presence and said he was leading the first official U.S. delegation to the St. Petersburg forum in a decade.
But there was no fanfare from the U.S. State Department.
“I’m not aware of the delegation that left,” US Secretary of State Marco Rubio said this week. “I’m aware of the event. I know they were hosting one, but I don’t think it was a high-level official.”
Walking through the exhibition halls at this year’s SPIEF, I noticed an eclectic mix: from boxing robots to singing and dancing grannies.
One of the most striking installations was a gigantic Russian “nevalyashka,” or tumbler doll. As generations of Russian children know, the roly-poly “nevalyashka” wobbles a lot, but never falls.
I often think that this is how Russian authorities want the world to perceive their country: as a giant doll that cannot be toppled or defeated, no matter how hard it is pushed. Despite more than four years of war and battered by sanctions, Russia is still standing.
A provocative image? Certainly.
But it may not be the best advertisement for attracting long-term foreign investment.
For this, the less vibration, the better.