Smoke Over SPIEF: Ukrainian Drone Strikes Overshadow St Petersburg Economic Forum

An unlikely scene greeted visitors to the St Petersburg International Economic Forum (SPIEF): a street performer dressed as the folkloric villain Koshchei the Deathless, producing coins, "repairing" a passer-by's glasses and startling onlookers with puffs of theatrical smoke. His antics captured attention for a moment — but the lasting image of SPIEF 2026 was something far more serious.

Ukrainian drones struck the St Petersburg area on both the opening and closing days of the forum, sending a towering plume of thick black smoke into the skyline that delegates watched from the expo centre on the city's outskirts. Local officials acknowledged that drones had damaged "infrastructure," though they did not immediately specify targets.

Symbol of unpredictability: A man dressed as a sorcerer is perhaps the last thing you would expect to see at an economic forum [BBC]

Diplomatic Overture Met With Dismissal

Shortly after the strikes, President Volodymyr Zelensky published an open letter to Vladimir Putin, mocking the Russian leader's age and referencing battlefield setbacks while also proposing a meeting in a neutral country to discuss peace. The Kremlin's response was swift and predictable: President Putin dismissed the letter's tone as "rude" and rejected the invitation, telling supporters, "It's not the author of the letter I need to respond to, but our soldiers on the frontline… I say to them: keep at it, brothers!"

That exchange crystallised the divide: Kyiv signalling a readiness for talks under neutral conditions, and Moscow reiterating that any end to the war must be on its own terms.

Putin rejected Zelensky's call for a face-to-face meeting on ending the war, labelling his open letter "rude" [EPA]

Stagecraft Inside, Pressure Outside

At SPIEF's plenary session President Putin projected an image of resolve and stability, asserting that despite "wars and sanctions" the economy is "developing" and "everything is stable." Inside the congress hall — amid applause from entrepreneurs, friendly foreign guests and officials — he cultivated the posture of an unbowed leader.

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

Outside the curated forum atmosphere, however, the picture looked different. Russia has suffered heavy battlefield losses in Ukraine, and Kyiv's growing ability to strike deep inside Russian territory with long-range drones has unsettled perceptions of security. When asked about the conflict, many senior figures at the forum echoed Kremlin talking points — a reminder that the war remains driven by the state's agenda.

[Reuters]

"The war is in its fifth year," I asked Alexander Zhukov, deputy speaker of the Duma. "Do you think it will end soon?" He deferred to the president's phrasing: "I can only respond in the words of our president. He said this situation must be resolved soon." Vasily Anokhin, governor of Smolensk region, likewise attributed the strikes to hostile intent: "As our president says, our enemies, unfortunately, are trying to hurt us."

Economic Strain and Resilience

Economists and business owners described an economy under pressure. War spending and sanctions have slowed growth across sectors; commentators speak of "stagnation" and, in some regions, decline. On a recent visit to Lipetsk, small-business owners said they were struggling to stay afloat as resources and young labour are drawn into the war effort.

A giant Russian tumbler doll was one of the eye-catching installations on display in the exhibition halls [BBC]

At the same time, forum organisers sought to present a rosier narrative. Kirill Dmitriev, President Putin's special envoy on foreign investment, conceded that "interest rates are a bit too high" and advocated lower borrowing costs to stimulate investment, while still arguing that Russia had shown resilience over the past five years.

Some entrepreneurs are adapting: with outbound tourism constrained by sanctions and shifting attitudes abroad, investors and businesses are promoting domestic travel and new holiday centres as an alternative market opportunity.

Politics, Optics And International Guests

The forum also featured attention-grabbing guests. Rodney Mims Cook Jr., chair of the U.S. Commission of Fine Arts, greeted President Putin and was hailed in Russia as proof of a U.S. delegation's presence — a claim the U.S. government did not amplify. U.S. Senator Marco Rubio, asked about the visit, said he was aware of the event but did not regard it as a high-level diplomatic delegation.

Among the exhibition halls' curiosities were boxing robots and dancing grandmothers, plus a giant nevalyashka (tumbler doll) — a roly-poly toy that wobbles but never falls over. It is a fitting metaphor for the image Moscow wants to project: a nation that rightens itself no matter how hard it is pushed. After more than four years of war and under heavy sanctions, Russia remains standing. But the spectacle of resilience does not erase the economic frictions and security concerns that coloured SPIEF 2026.

For long-term foreign investors, stability and predictability matter more than defiant symbolism: the less the wobble, the more attractive the investment climate.