Vladimir Putin delivered his speech at the plenary session of the St. Petersburg International Economic Forum (SPIEF). The event has long ago morphed into his personal victory lap, even though the Russian president rarely drops any bombshells there. This year the sheer scale of the country’s economic headaches was impossible to ignore: the budget is deep in deficit, big business is choking on sky-high interest rates, and smaller firms are being crushed by higher taxes on top of everything else. Putin is speaking in these conditions for the first time. In previous years he would reliably talk up growth — even if the numbers were cooked with some very creative bookkeeping.
This time the president noticeably changed tack and spent far more time praising the economic achievements of BRICS. It was painfully obvious that the real heavy lifting is being done by China and India, not by the Russian economy, which is under intense pressure.
Triumphant dispatches delivered against a backdrop of genuine problems would almost certainly have left the audience — mostly Russian businessmen and officials — rolling their eyes. That skepticism, of course, would never have been voiced in public. Putin himself and his economic team, above all Maxim Oreshkin, deputy head of the Presidential Administration, made a visible effort to tone down the usual turbo-optimism.
“We keep hearing criticism from all sides that our economy is experiencing hardship,” Putin conceded briefly, before quickly pivoting to a comparison: “Yes, but we’ve only fallen to the level that EU countries have been living at for years.”
He still couldn’t resist the optimistic script entirely. Putin kept talking about “development” but never spelled out any concrete steps that might actually produce it. Business received no clear signals about the future path of the key rate or about the Kremlin’s war plans — the very thing that determines the sanctions regime.
The only vaguely specific pledge was a promise not to lower the annual revenue threshold that qualifies companies for preferential tax regimes. It currently stands at 20 million rubles. Last year firms earning up to 60 million could use the breaks, and the government had earlier planned to cut the bar to 10 million. Putin ordered them to shelve that reduction for now. While freezing the threshold at 20 million looks on paper like help for business, the earlier sharp cut from 60 million to 20 million has already driven some companies out of business. The real purpose of Putin’s promise is therapeutic: to calm the surviving firms ahead of the elections without changing the overall policy direction.
Putin said nothing at all about the attacks on St. Petersburg in the opening days of the forum, as if they had never happened. His upbeat performances at SPIEF have been increasingly detached from reality for several years, but this time the contrast was particularly jarring. Instead of clear signals about the way forward, Russia’s elites received another helping of turbo-optimism — watered down a bit, but unmistakably the same old brew.
“New Elite” Inside the Old Vertical
United Russia has finished its primaries ahead of the State Duma elections. The winners were known long before the ballots were counted. In the ruling party, primaries aren’t about selecting the strongest candidates; they’re about kicking off the campaign early and testing the machinery of administrative and corporate mobilization.
As usual, one group among the winners is the bloc currently being pushed by the Kremlin’s political team. In 2011 and 2016 it was the “People’s Front” crowd; in 2021 it was graduates of the Kremlin’s cadre programs. This time it’s the military. Various estimates suggest that United Russia’s lists could end up with 50–60 “participants in the special military operation” — noticeably fewer than the Presidential Administration’s original plan to send around a hundred “veterans” to the Duma.
Putin has repeatedly called the soldiers fighting in Ukraine the “new elite” and demanded their rapid promotion. Governors and Presidential Administration officials are keen to show results: regions regularly announce appointments of military men to various posts. In most cases, however, these are symbolic positions with no real control over money or decisions. The soldiers are given responsibility for patriotic education, “regional security” and working with other “veterans”. A seat in the Duma also looks like a suitable slot these days: it comes with strict party discipline and almost no personal influence.
Sergei Kiriyenko’s political team will be happy to file a report about advancing several dozen military figures to the federal parliament. Finding enough “veterans” who can actually function in the Duma without causing scandals has proved difficult. Roughly half of the “military” slate consists of people already inside the elite — sitting deputies, officials and regional lawmakers. When necessary, regional authorities simply slot celebrities and businessmen into the “military track”. In Magadan Region, travel blogger Bogdan Bulychev won the primaries under the “SVO participant” label; in Pskov Region it was businessman Anton Moroz. Their connection to the war is extremely tenuous, but they are fully integrated into the vertical and completely predictable.
Among the genuine military personnel, senior officers — lieutenant-colonels and above — dominate. These are people who were already part of the elite. The handful of rank-and-file soldiers and junior officers who made it through the primaries had usually already served in civilian jobs, meaning the system had time to remold them. The remaining 10−20 “SVO participants”, including some female medics, will be swallowed by parliament without difficulty. Some military figures may also be placed by other systemic parties in safe seats, but judging by the Kremlin’s KPIs for United Russia, those parties have been left with very few seats to spare. Their leaders clearly have no desire to share the spoils with the “new elite”.
In short, the Presidential Administration’s political bloc has protected itself against the appearance of a proto-faction of “veterans” in the Duma — people with shared combat experience and a similar outlook. A federal deputy mandate remains a scarce and valuable resource that the system is reluctant to hand out.
The primaries also showed that even the loyalist electorate is rather cool toward military candidates. They receive noticeably fewer votes than the usual winners. To get them onto the lists the system applies an artificial 25 per cent “head start”: a quarter of the votes a “veteran” actually receives is automatically added to his total. Even so, there were no runaway military victories: “SVO participants” have not become national heroes.
On top of that, the early voting exposed problems with mobilizing the pro-Kremlin electorate. The Kremlin and United Russia had expected turnout of 10 per cent — ideally higher — of all voters. Despite heavy use of administrative pressure, only 9 per cent showed up. In some regions turnout fell by almost half compared with previous campaigns. The target figure was partly rescued by the usual “electoral sultanates” with 15−20 per cent turnout, but the overall trend is unmistakable: the administrative machine, which once relied on the positive mood of public-sector workers and other dependent groups, is starting to lose steam. Layoffs and the real decline in incomes are playing their part.
The Kids Haven’t Grown Up
The presence of the children of Russia’s elite at SPIEF has become one of the most discussed topics since the start of the war. Some observers interpreted the panel appearances by Vladimir Putin’s daughters, the offspring of his inner circle and the children of top officials as evidence that the “second generation” is gaining real influence and that their parents are trying to launch them onto the public stage early.
After three years of these “presentations”, however, it is clear the theory doesn’t hold up. Neither Katerina Tikhonova nor Maria Vorontsova, nor Alexander Vaino (son of the Presidential Administration head), nor Vladimir Kiriyenko (son of Sergei Kiriyenko), nor Roman Rotenberg, nor Boris Kovalchuk have made any noticeable career breakthrough. They remain exactly where they were before. The positions held by Alexander Vaino at the Agency for Strategic Initiatives and by Roman Rotenberg look rather modest given their family backgrounds.
Their appearances at SPIEF are not proof of growing influence. Those who were really destined to rise high have usually done so without public fanfare — just look at the children of Sergei Ivanov, Mikhail Fradkov or Nikolai Patrushev.
The intense focus on these SPIEF performances says more about how empty the forum’s agenda has become. With no big Western guests and no major deals, the appearance of famous surnames has turned into one of the few remaining news hooks. It is, in effect, import substitution for actual content.
SPIEF has completed its slide into irrelevance: the forum now features notorious Western bloggers and Russian ultra-conservatives. It is entirely possible that the children of the Russian elite will soon find the company embarrassing and that next year we will see fewer of the familiar faces we have grown used to.
