Putin’s Irrelevance at Davos Forum is Irreversible

Putin’s Irrelevance at Davos Forum is Irreversible

Executive Summary:

• Russia’s official absence from the World Economic Forum in Davos reflects its sharp economic, technological, and political decline under Russian President Vladimir Putin, leaving Moscow with a diminished role in shaping outcomes of its war against Ukraine.
• Putin’s prolonged war has pushed Russia toward recession, shrinking oil revenues, and eroding energy exports. Sanctions, investor distrust, and tightening information control are deepening structural weaknesses in Russia and undermining prospects for postwar economic recovery.
• Ukraine appears to be an attractive target for future investment. Russia remains sidelined, unable to halt its isolation or reenter global markets without fundamental political change.

The agenda of the World Economic Forum (WEF), in Davos, Switzerland on January 19–23, is extensive. The absence of official Russian participants appears politically motivated. Russia has little to contribute to discussions, even on matters where it used to be among the world leaders, such as space exploration. Russia only launched 17 space rockets in 2025 (the plan was 20), while the People’s Republic of China (PRC) increased its space program to 91 launches, and the United States had 181 (RIA Novosti, January 12; Holod Media, January 13). Russia seems unlikely to regain prominence in Davos going forward. Even if Russian President Vladimir Putin’s successor eventually represents the Kremlin at the WEF, it is improbable that they would attract as much interest as Putin did in 2000.

Putin’s nearly four-year-long war against Ukraine has driven Russia’s economic and technological degradation and its loss of influence in global affairs. Bringing the war to an end is one of the key agenda items in Davos (RIAC, January 15). Peace cannot be achieved without Russian participation, but U.S. President Donald Trump is scheduled to discuss it with key European partners, including European Commission President Ursula von der Leyen and Ukrainian President Volodymyr Zelenskyy, leaving the Kremlin to hope for various disagreements to derail the formation of a joint position (Kommersant, January 15). Instructing his generals to continue relentless attacks at whatever cost, Putin seeks to assert battlefield control in the deadlocked war that has lasted longer than the Soviet Great Patriotic War, the main reference point for Russia’s jingoist propaganda (Re: Russia, January 13). By maintaining his maximalist demands, Putin has lost the political leverage to design a compromise that could have been presented as a win for Russia.

The strength of each country’s economy decides the outcome in any war of attrition. At the end of the fourth year of the war, Russia’s economy is progressing from stagnation to recession, despite the Russian bureaucracy’s attempts to doctor statistical data (The Bell, January 16). The last thing any competent authority would do in this fragile situation is to raise taxes, but this is precisely what the Russian government plans to do to keep the budget deficit under control (Nezavisimaya Gazeta, January 15). The severe decline of oil export revenues is the primary driver of the Russian budget crisis; the abundance of supply on the world oil market makes it possible for key customers, such as India, to demand discounts so deep that the margin of profit for Russian exporters disappears (The Moscow Times; Forbes.ru, January 15). Russia’s “shadow fleet” transporting Russian oil has come under tighter scrutiny, especially in the Baltic Sea, after the U.S. Coast Guard seized the Venezuela-linked Marinera tanker in the North Atlantic despite its attempt to change its registration to Russia (Novie Izvestiya, January 9; The Insider, January 15). Problems in the Russian energy industry are not limited to oil production—in January, the PRC stopped importing Russian electricity because the price set by Inter-RAO, one of the largest Russian public energy companies, is too high relative to the cost of domestic energy in the PRC (Vedomosti, January 16).

The closure of many Russian niches in the world energy markets means that Western investors will be reluctant to restart joint projects with corporations such as Rosneft or Gazprom. This will likely be the case even if sanctions are lifted in the course of a peace deal, which could take shape at the Davos Forum (Novaya Gazeta Europe, January 15). Putin has shown no intention to sign such a deal, but tried to reassure the Russian business elite that re-engagement with U.S. partners is possible (RBC, December 26, 2025). The European Union, in the meantime, continues to tighten its sanctions regime and entertains no illusions about how investment opportunities in the Russian economy have been severely affected by the war (Forbes.ru, January 7; RBC, January 15). The Kremlin’s recent push to create a sovereign “digital government” is being replaced by attempts to curtail access to the Internet, demonstrating Russia’s inability to keep pace with U.S. and EU technology innovation (Carnegie Politika, January 12). Even some Russian experts express concern about the inability to keep pace in the geopolitical race to build high-capacity data centers, but Putin appears more concerned about maintaining control over information flows (RIAC, December 18, 2025).

Ukraine, in contrast, appears to be an attractive target for future investment. The plans for funding its reconstruction may become more concrete at the Davos session, particularly because Kyrylo Budanov, the newly appointed head of Zelenskyy’s presidential office, traveled to Miami on January 17 to flesh out the details (Kommersant, January 10; News.ru, January 17). Russian commentators argue that Ukraine’s deal with the United States to develop rare earth deposits is not based on any reliable estimates of resources, and the European Union’s intentions to integrate the Ukrainian defense industry into its own rearmament plans are merely wishful thinking (Vzglyad, January 14; RIA Novosti, January 15). These commentators’ self-serving skepticism will not deter potential investors from drafting balance sheets on projects in Ukraine, which aims to be open for business from the moment the peace deal is signed and has learned the necessary lessons in exterminating corruption (Focus.ua, January 10).

Putin is likely upset about the work to finalize a peace plan, about which Russia is informed, but not involved. The Kremlin’s push to gain a position of military strength is also failing. Russia’s ground campaign has lost even the weak momentum it had in late autumn; the barbaric air campaign against Ukrainian cities adds to civilian suffering but is not substantially diminishing the Ukrainian will to resist aggression. The lack of official Russian participation in the Davos Forum demonstrates that Putin has no cards to play in global financial competition, as the burden of war expenditures drags down Putin’s economy. A pause to fighting would be the rational choice, but Putin is loath to make it. He suspects that Ukraine would use the intermission better than Russia, which can neither clean its toxic political reputation nor alter its predatory business environment. Russia may only begin to rehabilitate when new leadership dares to depart from the course of militaristic imperialism, but this is an option Putin will not begin to contemplate.