The St. Petersburg International Economic Forum is opening again as a showcase of Russian resilience. The Kremlin wants to demonstrate that isolation has failed, that business still comes, that the West is not the whole world, and that Russia can still speak about investment, energy and technology even under sanctions.
This year, however, the forum’s polished surface contrasts especially sharply with the reality of war. The event begins after another massive strike on Kyiv and other Ukrainian cities, while Ukraine almost disappears as a word from the official program. That absence becomes the loudest presence of all: the war shapes every number, every risk and every conversation behind closed doors.
Putin’s forum, once a platform for global corporations, bankers and Western officials, now gathers a different public. Separate American conservative voices, right-wing influencers, businessmen from countries that have not broken ties with Moscow, oil players and representatives of states that still see Russia as useful are arriving in St. Petersburg.
According to Daycom’s earlier analysis, the forum’s main function is no longer economic, but psychological. The Kremlin is trying to prove that Russia is not alone, even as its economy increasingly lives not by the logic of development, but by the logic of wartime endurance. The investment stage has become scenery for a state seeking not a breakthrough, but time.
The official theme is pragmatic dialogue and a path to a stable future. The formula sounds almost ironic. The central instability shaping Russia’s future was created by the Kremlin itself. The war against Ukraine has cut Russia off from much of the Western technology, capital, logistics and trust that supported its earlier growth.
During the first decade and a half of Vladimir Putin’s rule, Russia did experience a dramatic economic rise. High oil prices, integration into global trade, Western investment and consumer growth created the image of a state returning to the big league. But the annexation of Crimea, sanctions and then the full-scale war gradually changed the nature of that model.
Now Russia grows not because it is becoming more efficient, but because the state is flooding the economy with military money. Defense plants are working, wages in the war sector are rising, and regions are receiving orders. Yet the civilian economy is being squeezed by high interest rates, sanctions, labor shortages and dependence on imports through indirect routes.
That is why the current numbers look troubling for Moscow. After a short wartime surge, the economy has sharply slowed. Growth has fallen close to zero, the first quarter showed contraction, and the annual forecast has become a symbol of stagnation. Russia has not collapsed, but it no longer has the momentum that would allow it to wage war without an internal price.
The choice facing the Kremlin is becoming harsher: reduce military financing and give the civilian economy air, or continue the war, raise taxes, keep credit expensive and push the country toward slow recession. This is no longer a political metaphor. It is budget arithmetic.
War drains resources from the future. Money that could go to education, roads, medicine, technology and regional development goes instead to missiles, drones, tanks, compensation for the families of the dead and salaries for contract soldiers. The state is buying military endurance, but paying for it with the degradation of everything that does not shoot.
The St. Petersburg forum is meant to conceal that asymmetry. Inside the halls, participants will speak about artificial intelligence, information warfare, OPEC+, German investment, family values and new markets. But behind each of those topics stands one question: can an economy cut off from the most powerful financial and technological centers fight, grow and preserve living standards at the same time?
The presence of American guests carries a separate meaning for the Kremlin. Even if this is not big business and not a full political return of the United States to the Russian market, the participation of individual American figures is presented by Moscow as a crack in isolation. The Kremlin needs the image: not all of the West is against Russia, and the door can be opened again.
That is why conservative media personalities in the program matter almost as much as economic panels. Russia has long invested in contacts with Western circles that criticize the liberal order, the European Union, globalization and support for Ukraine. For the Kremlin, they are not merely guests. They are proof that the political West can be split through cultural wars.
The German trace at the forum is equally telling. Germany was once one of Russia’s main economic partners, a symbol of industrial interdependence and belief in trade as an instrument of peace. Now even the presence of a single businessman connected to retail looks less like the return of an old era than the remaining shadow of a broken model.
For the Kremlin, it is important to stress that hundreds of European companies still operate in Russia. But the need to keep proving it says something about the changed status. Before 2022, Western business presence was normal. Now it has become a political argument that Moscow displays as evidence that the sanctions regime is not absolute.
The most serious real economic line of the forum is energy. Saudi participation, discussions about OPEC+, oil prices and the war in the Middle East give Russia something no influencer can provide: the chance to speak about a global market where it still matters. Oil and gas remain the language in which Moscow can still speak to major players.
At the same time, Russia’s energy strength is no longer unconditional. Ukrainian drones are striking refineries, fuel depots and pumping stations, complicating logistics and raising the domestic cost of war. Oil revenues support the budget, but the infrastructure itself is increasingly becoming a target. This is the new reality: Russia sells energy to the world, but can no longer guarantee the full inviolability of its own energy system.
That is why the war will be present in St. Petersburg even without being named directly. It will sit at the tables with bankers, in conversations about interest rates, in the anxiety of regional officials, in the sanctions debate, in logistics, in fears of recession and in the question of whether the conflict will end or become even harsher. Participants may speak of stability, but their stability depends on the front.
For Putin, the forum is an attempt to show control. He must appear not as the leader of a country growing tired of war, but as the host of an alternative world where Western isolation does not work, American voices arrive, energy partners stand nearby, and Russian billionaires and officials speak about the future. It is political theater of confidence.
But theater does not abolish economic logic. If the war continues, costs will rise. If costs rise, taxes and deficits will press harder. If the civilian economy weakens, the population will eventually feel not only patriotic mobilization, but also falling real incomes. The Russian system can mute discontent for a long time, but it cannot cancel cause and effect.
That is the central paradox of the “Russian Davos.” It is built to demonstrate movement, but takes place against a backdrop of stagnation. It is meant to show openness, but is itself a product of isolation. It speaks about investment when war has become the country’s main investor. It invites guests, but cannot invite back the economic normality the Kremlin destroyed.
St. Petersburg this week will become a showcase for a Russia trying to look larger than its own problems. But behind the security cordons, panels, oil discussions and media personalities, the main fact is visible: war is no longer an external factor for the Russian economy. It has become its central mechanism, its main risk and a trap from which the Kremlin has not yet found a convincing exit.
