Steve Rosenberg
BBC editor, Russia
An evil wizard is the last person you would expect to meet at an economic forum.
But one was there casting spells.
With skillful hand movements, the villain from Russian folklore, Koschej the Immortal (or, rather, than dressed as him), he created coins out of nothing, “broke” and reassembled someone’s glasses, and shocked passers-by with occasional streams of smoke billowing from his fingers.
“Russians are an unpredictable people,” he declared.
“We do things that no one expects.”
Maybe.
But in St. Petersburg this week, Ukraine was responsible for the unexpected in the most dramatic way possible.
Ukrainian drones attacked the St. Petersburg area on the opening and closing days of the International Economic Forum (SPIEF).
A sight that will not soon be forgotten about SPIEF 2026 will be the huge column of thick black smoke that dominated the skies of St. Petersburg on June 3.
Without going into detail about what was hit, local officials admitted that the drones had damaged “infrastructure”.
All the delegates saw the smoke as they arrived at the fair on the outskirts of town.
Few could have predicted what would follow.
Vladimir Zelensky sent an open letter to Vladimir Putin.
The Ukrainian president scolded the Russian leader about his age and Russian defeats in the war, but he did proposed that the two leaders meet in a neutral country to negotiate peace.
Putin’s answer?
There was nothing unpredictable there.
The Kremlin leader, who had already rejected previous calls for direct negotiations with President Zelensky, criticized the letter’s “cheeky” tone and rejected the offer.
“I don’t have to answer to the author of the letter,” Putin said, “but to our soldiers at the front… And I say to them: keep going, brothers!”
Vladimir Putin is not ready to end the war in Ukraine.
Not unless it’s on his terms.
I listened to what he said at the plenary session of the forum.
There were very few surprises.
The Putin we saw was the Putin we expected to see – uncompromising, unyielding, determined to project an image of strength and unwavering resolve.
He tried to appear confident about the war and the Russian economy.
“There are wars and sanctions. But the economy is developing,” claimed Vladimir Putin.
“Everything is stable.”
Having received applause from entrepreneurs, friendly foreign dignitaries and officials, the Russian president was able to present himself as an extremely strong leader in the congress hall.
His problem is what is happening outside.
Huge losses on the battlefield which Russia suffered in the war against Ukraine.
Ukrainian long-range drones which now go deep into the territory of his country.
At the forum, when I asked senior officials about the war, their answers had one thing in common: they all referred to the Kremlin.
A reminder, perhaps, where the idea of a “special military operation” came from in the first place.
“The war is in its fifth year,” I pointed out to Alexander Zhukov, the deputy speaker of the Duma, the lower house of the Russian parliament.
“Do you think it will end soon?”
“I can only respond to the words of our president. He said that the situation must be resolved soon,” replied the deputy.
“Drones have been targeting St. Petersburg this week,” I reminded Vasily Anokin, the governor of Smolensk Oblast.
“And your region has also been the target of attacks in the past.”
“As our president says,” the governor said, “our enemies, unfortunately, are trying to hurt us.”
The Russian economy is hurt.
There are no signs of an imminent collapse, though war and sanctions exert considerable pressure on her.
Growth has stalled in most sectors.
Russian economists speak of “stagnation” and, in some areas, of “decline.”
The ongoing conflict is draining massive resources, both human and financial.
During my recent trip to the Lipetsk region, small business owners told me they were having trouble staying afloat.
With its flashy booths and expensive presentations, the St. Petersburg forum presented a rosier view of the Russian economy.
“Interest rates are a little too high,” admitted Kirill Dmitriev, Putin’s special adviser on foreign investment, when we spoke at the forum.
“We believe that those rates should be lower in order for there to be more investment.”
“But the Russian economy has proven resilient over the past five years, and many Western analysts didn’t believe it was possible.”
Even in the crisis economic environment, some companies have seized the opportunity here.
“A few years ago, Russians flocked abroad for vacations,” businessman German Galperin told me, “but the situation does not allow it now because of sanctions and because attitudes towards Russians abroad have changed.
“It encourages the development of modern tourist centers in Russia.”
Unlike the wizard “Koschei the Immortal”, the Kremlin cannot create coins out of nothing.
In any case, it would serve as a relief for the budget deficit if it could.
It did, however, create some guests that attracted attention on the forum.
“I bring you greetings from your friend President Trump,” Rodney Mims Cook Jr. told Putin in St. Petersburg.
As chairman of the US Commission of Fine Arts, Mims Cook Jr. is in charge of the controversial White House ballroom project.
Russia trumpeted his presence and claimed to be leading the first US delegation to the St. Petersburg forum in a decade.
But there was no fanfare at the US State Department.
“I don’t know about the delegation that traveled,” said Secretary of State Marco Rubio.
“I know about the event. I knew they organized it, but I don’t believe it would be any high-level official.”
Walking around the exhibition halls at this year’s SPIEF, I noticed an eclectic mix: everything alive, from boxing robots to singing and dancing grannies.
One of the most impressive installations was a giant Russian rocking “naughty” doll.
As generations of Russian children know, the chubby “naughty” wobbles a lot, but never falls.
I often think that this is how the Russian authorities want the world to experience their country: as a giant puppet that cannot be knocked down or defeated, no matter how hard you push it.
Despite more than four years of war, and hit by sanctions, Russia is still standing.
Defiant picture?
Certainly.
But perhaps not the best advertisement for attracting long-term foreign investment.
When it comes down to it, the less wobble the better.
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