Putin’s Economic Solution

Greek Prime Minister Alexis Tsipras, whose country is fighting to stave off financial collapse, was a guest of honor at Vladimir Putin’s annual investment showcase, on June 18-20, along with top officials from China and Myanmar. The event in Putin’s hometown of St. Petersburg drew top European oil executives, such as BP’s Bob Dudley, and a few U.S. business leaders, as well as former British Prime Minister Tony Blair. But the attendance paled in comparison to past forums, when banking titans such as Goldman Sachs Chief Executive Officer Lloyd Blankfein queued up to pay their respects to Russia’s president.

The smaller number of heavyweights at the forum underscores the isolation of Putin and Russia. Foreign direct investment has declined for the last two consecutive quarters. The economy is expected to spend this year and next in recession, assuming oil stays stuck around $60 a barrel. The ruble is down 40 percent from its 2013 highs. Putin’s plan is to wait for oil to rebound, and keep expanding the power of state enterprises, which now account for more than half the economy, up from 30 percent when he became president in 1999.