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

The BBC's Russia editor saw Putin's flagship economic event overshadowed by Ukrainian drones attacks. Steve Rosenberg: Lasting image of Russia's economic forum is plume of smoke over St Petersburg Copyright current_year BBC. All rights reserved. The BBC is not responsible for the content of external sites. Read about our approach to external linking. Copyright current_year BBC. All rights reserved. The BBC is not responsible for the content of external sites. Read about our approach to external linking. Smoke rising above St Petersburg streets Steve Rosenberg: Russia's economic forum overshadowed by drone attacks on St Petersburg A huge plume of thick black smoke dominated the St Petersburg skyline on Wednesday after a Ukrainian drone attack Smoke seen rising in the background of a scene from St Petersburg with a wide street and historic buildings An evil sorcerer is the last person you'd expect to see at an economic forum. But there he stood working his wizardry. With sleight of hand Russian folklore villain "Koshchei the Deathless" (or, rather, someone dressed as him) produced coins out of thin air, "broke" and reassembled someone's glasses and shocked passers-by with occasional puffs of smoke from his fingers. "Russians are unpredictable people," he declared. "We do things no one expects." But in St Petersburg this week, the unexpected was delivered most dramatically by Ukraine. Ukrainian drones attacked the St Petersburg area on the opening – and closing – days of the set-piece International Economic Forum (SPIEF). on the opening – and closing – days of the set-piece International Economic Forum (SPIEF). The abiding image of SPIEF 2026 will be the huge plume of thick black smoke which dominated the St Petersburg skyline on Wednesday. Without specifying what was hit, local officials admitted that drones had damaged "infrastructure". All the delegates saw the smoke as they arrived at the expo centre on the edge of the city. Symbol of unpredictability: A man dressed as a sorcerer is perhaps the last thing you would expect to see at an economic forum BBC's Steve Rosenberg interviews man dressed as Russian folklore villain "Koshchei the Deathless" at the economic forum Few could have predicted what came next. Volodymyr Zelensky published an open letter to Vladimir Putin. Ukraine's president taunted Russia's leader about his age and about Russian setbacks in the war but proposed the two leaders meet in a neutral country to talk peace. The Kremlin leader, who had rejected previous calls for direct talks with President Zelensky, criticised the letter's "rude" tone and dismissed the offer. The Kremlin leader, who had rejected previous calls for direct talks with President Zelensky, criticised the letter's "rude" tone and dismissed the offer "It's not the author of the letter I need to respond to," President Putin said, "but our soldiers on the frontline…I say to them: keep at it, brothers!" Vladimir Putin is not ready to end Russia's war on Ukraine. I listened to what he said at the forum's plenary session. There were few surprises. The Putin we saw is the Putin we expected to see - uncompromising, unrepentant, determined to project an image of strength and unwavering conviction. He tried to appear confident about the war, and about Russia's economy. Putin rejected Zelensky's call for a face-to-face meeting on ending the war, labelling his open letter "rude" Participants watch Russian President Vladimir Putin's speech on a TV screen during the 29th St Petersburg International Economic Forum Smoke billowing over central St Petersburg Ukrainian drones hit St Petersburg as Putin's flagship economic forum opens President Putin lifts his finger as if to make a point as he speaks into a microphone. He is dressed in a navy blue suit, white shirt and red patterned tie and is speaking in front of a marine blue backdrop Putin says there is 'no point' meeting Zelensky over ending Ukraine war Ukrainian drones target St Petersburg in attack Russia calls 'unprecedented' "There are wars and sanctions. But the economy is developing," Vladimir Putin claimed. "Everything is stable." Applauded by entrepreneurs, friendly foreign dignitaries and officials, inside the congress hall the Russian president could style himself as a super strong leader. His problem is what's happening outside. The massive battlefield losses that Russia has suffered in its war on Ukraine. The long-range Ukrainian drones now penetrating deep inside the country. At the forum when I asked senior officials about the war, their responses had one thing in common: they quoted the Kremlin. A reminder, perhaps, of whose idea the so-called "special military operation" was in the first place. "The war is in its fifth year," I pointed out to Alexander Zhukov, deputy speaker of the Duma, the lower house of Russia's parliament. "Do you think it will it end soon?" "I can only respond in the words of our president. He said this situation must be resolved soon," replied the MP. "Drones targeted St Petersburg this week," I reminded Vasily Anokhin, the governor of Smolensk region. "And your region too has in the past come under drone attack." "As our president says," the governor began, "our enemies, unfortunately, are trying to hurt us." The Russian economy is hurting. There are no signs of imminent collapse, but war and sanctions are creating considerable pressure. Growth has stalled in most sectors. Russian economists speak of "stagnation" and, in some areas, "decline". The ongoing conflict is sucking massive resources, both human and financial. On a recent trip to Lipetsk region, small business owners told me they were struggling to stay afloat. With its shiny stands and big-budget presentation the St Petersburg forum presented a more rose-tinted view of Russia's economy. Police officers stand in front of a banner and flags with the logo of the St. Petersburg International Economic Forum (SPIEF) as heavy smoke billows in the background after Ukrainian drones hit infrastructure "Interest rates are a bit too high," conceded 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 challenging economic environment some businesses here spy an opportunity. "A few years ago, Russians flocked abroad on holiday," businessman German Galperin told me, "but the situation doesn't always allow that now due to sanctions and because attitudes to Russians abroad have changed. "That's prompting the development of modern tourist centres in Russia." Unlike sorcerer "Koshchei the Deathless", the Kremlin cannot abracadabra coins out of thin air. It would certainly ease the budget deficit if it could. It did, though, magic up some attention-grabbing guests 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 overseeing the controversial White House ballroom project. Russia trumpeted his presence and claimed he was heading the first official US delegation at the St Petersburg forum in a decade. A giant Russian tumbler doll was one of the eye-catching installations on display in the exhibition halls A giant Russian tumbler doll with a red body and blue eyes looking to the left, on display But there was no fanfare from the US State Department. "I am not aware of the delegation that went," US Secretary of State Marco Rubio said this week. "I'm aware of the event. I know they were hosting one, but I don't think it would have been a high-level official." Walking round the exhibition halls at this year's SPIEF I noticed an eclectic mix: everything from boxing robots to singing, dancing grannies. One of the most eye-catching installations was a ginormous Russian 'nevalyashka', or tumbler doll. As generations of Russian children know, the roly-poly 'nevalyashka' wobbles a lot, but never falls down. I often think that's how the Russian authorities want the world to view their country: as a giant tumbler doll that cannot be knocked down or defeated, no matter how hard you push it. Despite more than four years of war, and battered by sanctions, Russia is still standing. But perhaps not the best advert for attracting long term foreign investment. Stylised image showing a map of Ukraine overlaid with images of tanks and a soldier holding a shoulder launcher Ukraine in maps: Tracking the war with Russia Residents of Russia's second-largest city were urged to stay indoors for the first time since the war started. The Russian president's refusal comes after his Ukrainian counterpart wrote an open letter calling for face-to-face talks. Russia is intensifying attacks in Ukraine but more than four years of war are causing concern even among Putin loyalists. Zelensky's meeting with Ukraine's staunchest European allies comes as US President Donald Trump's focus has shifted to the war with Iran. Incumbent Prime Minister Nikol Pashinyan is seeking a third term despite falling domestic support. Ukraine says it struck five ships carrying illegal cargo in the Sea of Azov and in coastal waters of Russian-occupied territories. Ukraine's president tells the Russian leader that only "direct engagement" between the two countries could end the war, with the US focused on Iran. Some 18 Republicans joined the Democrats to back the measure, after a smaller group broke ranks on another vote in recent days.