Steve Rosenberg: Russia's economic forum overshadowed by drone attacks on St Petersburg

1 hour ago

Steve RosenbergBBC Russia Editor

A folklore villain would seem out of place at an economic gathering.

Yet there he stood performing his tricks.

With quick moves the Russian tale character Koshchei the Deathless (or an actor in costume) pulled coins from nowhere, fixed and restored a pair of glasses and surprised onlookers with sudden smoke from his hands.

Russians are unpredictable people he stated. We do things no one expects.

Perhaps.

But in St Petersburg this week the unexpected came most strikingly from Ukraine.

The lasting picture of SPIEF 2026 will be the large column of thick black smoke that filled the St Petersburg sky on Wednesday. Without naming targets local officials confirmed drones had struck infrastructure. All delegates noticed the smoke on arrival at the expo centre on the city outskirts.

Few could have foreseen what followed.

Volodymyr Zelensky issued an open letter to Vladimir Putin. Ukraine's president mocked Russia's leader on his age and Russian losses in the conflict yet suggested the two meet in a neutral country to discuss peace.

President Putin's reply?

Nothing surprising about that.

It is not the letter writer I need to answer President Putin said but our soldiers on the frontline. I say to them keep at it brothers.

Vladimir Putin is not prepared to halt Russia's war on Ukraine.

Not unless it meets his conditions.

I heard his words at the forum plenary session. There were few new points.

The Putin on view is the one expected: firm unapologetic and keen to show strength and steady resolve. He sought to look assured on the war and on Russia's economy.

There are wars and sanctions. But the economy is developing Vladimir Putin stated. Everything is stable.

Cheered by business leaders friendly foreign guests and officials inside the hall the Russian president could present himself as a powerful figure.

His challenge lies outside.

The heavy battlefield losses Russia has faced in its war on Ukraine.

The long-range Ukrainian drones now reaching far into the country.

At the forum when I questioned senior officials on the war their answers shared one trait: they repeated the Kremlin line. A sign perhaps of who launched the so-called special military operation initially.

The war is in its fifth year I noted to Alexander Zhukov deputy speaker of the Duma the lower house of Russia's parliament. Do you think it will end soon?

I can only answer with the words of our president. He said this situation must be resolved soon replied the MP.

Drones hit St Petersburg this week I noted to Vasily Anokhin the governor of Smolensk region. And your region too has faced drone attack in the past.

As our president says the governor began our enemies unfortunately are trying to hurt us.

The Russian economy is under strain. There are no clear signs of immediate breakdown but war and sanctions are adding heavy pressure. Growth has paused in most areas. Russian economists mention stagnation and in places decline. The continuing conflict draws huge resources both human and financial.

On a recent visit to Lipetsk region small business owners told me they were finding it hard to continue.

With its polished displays and large budget show the St Petersburg forum offered a brighter picture of Russia's economy.

Interest rates are a bit too high admitted Kirill Dmitriev President Putin's special envoy on foreign investment when we spoke at the forum.

We believe rates should be lower for more investments. But Russia's economy has proved resilient over the last five years: something that many Western analysts believed was impossible.

Even in a tough economic setting some businesses here see a chance.

A few years ago Russians travelled abroad for holidays businessman German Galperin told me but the situation does not always allow that now due to sanctions and because views of Russians abroad have shifted.

That is encouraging the growth of modern tourist sites in Russia.

Unlike the sorcerer Koshchei the Deathless the Kremlin cannot conjure coins from nothing. It would surely help the budget shortfall if it could.

It did however produce some notable visitors for the forum.

I do give a good hello from your friend President Trump Rodney Mims Cook Jr told President Putin in St Petersburg. As chair of the US Commission of Fine Arts Mr Mims Cook Jr is managing the disputed White House ballroom project.

Russia highlighted his attendance and said he led the first official US group at the St Petersburg forum in ten years.

But there was no announcement from the US State Department.

I am not aware of the delegation that went US Secretary of State Marco Rubio said this week. I am aware of the event. I know they were hosting one but I do not think it would have been a high-level official.

Walking through the exhibition halls at this year's SPIEF I saw a varied mix: everything from boxing robots to singing dancing grandmothers.

One of the most striking displays was a huge Russian nevalyashka or tumbler doll. As generations of Russian children know the roly-poly nevalyashka wobbles often but never topples.

I often think that is how the Russian authorities want the world to see their country: as a giant tumbler doll that cannot be toppled or beaten no matter how hard it is pushed. Despite more than four years of war and hit by sanctions Russia is still standing.

A bold image? Certainly.

But perhaps not the best way to draw long-term foreign investment.

For that fewer wobbles would help.