Vladimir Putin has failed to attract western companies to an economic conference in St Petersburg this week. Even Russia’s allies sent lower-ranking officials and businessmen, with the exception of Indonesia, whose president is in attendance.
Several close relatives of top Kremlin officials are among the participants at the flagship event this week. The conference comes after years of conflict and harsh western sanctions have hit Russia’s economic outlook.
“Nobody’s talking about any investment, because how are you supposed to invest in Russia in this climate — war, sanctions, slowing growth and persistent inflation?” said Alexandra Prokopenko, a fellow at the Carnegie Russia Eurasia Center in Berlin. “The main point of the forum is to show Putin that the economy isn’t stagnating and that everyone is having a great time doing business as usual.”
Putin is set to appear at the forum on Friday, where state television has promised a major speech about international affairs and “who is to blame for what is going on today”.
He will be joined by Indonesia’s President Prabowo Subianto, Chinese first-ranked vice-premier Ding Xuexiang, Sheikh Nasser bin Hamad Al Khalifa, the third in line to the throne of Bahrain, and South African deputy president Paul Mashatile.
The line-up is the most prominent group of world leaders that Russia has attracted to the conference since the war began, as widespread condemnation of the full-scale invasion of Ukraine and fear of western blowback prompted many of Russia’s allies to stay away.
Prabowo in particular has vowed to strengthen ties with Russia even as other foreign powers have shunned Putin following the invasion. As defence minister, he hailed Russia as a “great friend” on his most recent trip to the country in July 2024 and skipped the G7 summit in Canada this week to attend the conference. He is scheduled to meet Putin on Thursday.
Since Prabowo took office last year, Indonesia has held its first-ever joint naval exercises with Moscow and agreed to join the Brics grouping of developing countries led by China and Russia.
In 2023, Prabowo proposed a peace plan for Ukraine that included proposals for a demilitarised zone and a UN referendum in “the various disputed areas”. The proposal drew heavy criticism from Kyiv, which said there were no disputed territories, rather regions in south-eastern Ukraine that were under Russian occupation.
Evan Laksmana, from the International Institute for Strategic Studies, said Russia would benefit more from the growing relationship with Indonesia.
“From a political standpoint, Russia gets the benefit of not being a pariah in south-east Asia,” Laksmana said. “Given Indonesia is the biggest country in south-east Asia, it’s a significant political standing for Russia to show that it is not isolated.”
Putin’s triumphalist rhetoric, however, belies increasing gloom among officials and economic elites about the country’s economic prospects as the war drags on.
High borrowing costs aimed at reining in runaway inflation have begun to cool Russia’s wartime growth boom, while an accompanying rise in living standards is petering out.
Russia’s upper hand on the battlefield has dimmed Putin’s appetite for a peace deal in Ukraine, making the prospect of an end to the western sanctions regime appear distant.
Though the Kremlin has claimed to be fielding interest from western investors who want to return to Russia if sanctions are lifted, officials admitted on Wednesday that none has yet made any formal attempts to return.
“We haven’t seen any requests from companies that left for now,” deputy finance minister Ivan Chebeskov told news outlet RBC. “If we’re talking about exit deals, there are dozens” of requests a month, Chebeskov added, even though the exodus of western companies has slowed in the past year.
Putin, who has shown little interest in agreeing to a US-brokered peace deal in Ukraine, appeared to change his views on the topic last month when he backed a push to stop returning western companies from buying out their ersatz replacements.
“Our management can handle the most difficult import substitution challenges,” first deputy prime minister Denis Manturov said on Wednesday. Western companies “should do something to get the sanctions cancelled first”, he added. “Then let them come and we’ll talk.”
The expectations of a downturn appear to have deterred many Russian business leaders from speaking. Only six of Russia’s 50 richest people are set to appear, according to the official programme. Rosneft’s Igor Sechin and Gazprom’s Alexei Miller, the chief executives of Russia’s two biggest state-owned energy exporters, are absent.
The forum has instead become a showcase for the family of Russia’s top officials. Katerina Tikhonova, Putin’s daughter, appeared via video link on Wednesday, while Alexander Vaino, the 25-year-old son of his chief of staff, will speak at four different panels.
One session devoted to sporting federations features the children of three of Putin’s longest-standing associates and the son-in-law of foreign minister Sergei Lavrov — but only two athletes.
Even if the repeat appearances from Russia’s princelings indicates a dearth of other speakers, the forum’s cultural programme has made it clear those family ties are now a feature.
A VIP high-speed train from Moscow offered guests a nine-course meal served alongside wine from two producers next to a palace allegedly built for Putin’s use. A stand at the conference shows off his father’s 11 Soviet state honours. State media posted video of what it said were long lines for free T-shirts emblazoned with pithy quotes from Putin and Lavrov.
“It’s just the same old travelling circus,” Prokopenko, a former central bank official, said. “The main thing is for Putin to be happy with it.”
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