St Petersburg International Economic Forum

The steel underlying Russia’s softening

Ukraine may be close to a thousand miles away from St. Petersburg, but it is never far from conversations among the elite gathered there for this year's economic meeting.

While many attendees privately express nervousness about the year ahead for the Russian economy, the public face is a show of strength to rival that of any Russian steel.

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Visitors sit in the OAO Rosneft stand in the sponsor's hall at the St. Petersburg International Economic Forum (SPIEF)
Andrey Rudakov I Bloomberg via Getty Images

Right at the center of the conference, as a not-so-subtle metaphor for their importance to the Russian economy, are the , Rosneft and Gazprom stands.

A team of attractive female brand ambassadors, clad in outfits co-ordinated from head to foot in their company colors, compete to press freebies on attendees.

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These national champions are all expected to make big announcements over the course of the forum, to reinforce the feel-good message about the Russian economy organizers are hoping to put across.

Gazprom has already had its headline-grabbing moment with the announcement of a $400 billion, three-decade deal to supply gas to China on Wednesday.

When German Gref, chief executive of Sberbank, and Igor Sechin, his opposite number at Rosneft, descend on the forum, they will come with entourages and waves of excitement to rival any Hollywood actor.

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Sechin, one of the Russians targeted by U.S. sanctions, has dismissed their impact as negligible.

The iron fist of this display of economic might has a fitting setting in St Petersburg, which spent most of the twentieth century as Leningrad, and still has the famous statue of Lenin proselytizing with one hand raised as one of her most recognizable landmarks.

There is also plenty of the velvet glove in evidence in the charm offensive on the St Petersburg front.

Fresh-faced twenty-something Russians speaking perfect, American-accented English await attendees at the airport to usher them to the top of the passport queue.

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St Petersburg itself appeared to have been spruced up for the occasion, with more noticeably fresh coats of paint on buildings compared to 2013.

It may take more than a coat of paint to convince Western investors to pile back into Russia. Many are now trying to downplay the effect of the trouble with Ukraine, but the crisis has thrown the problems of investing in Russia into sharp relief.