Hand-wringing at dinner with Putin Eight years ago, advisers to President Vladimir Putin had an idea to polish his international image: invite foreign-based academics and journalists specialising in Russia to a seminar with Russian counterparts - many sympathetic to Mr Putin's recentralisation of power after the turbulent Yeltsin years - and dinner with the president himself. The Valdai Discussion Club, named after its first lakeside venue, has become an annual, and somewhat controversial, event. One Russian analyst and Putin critic has labelled foreign attendees "useful idiots" serving as Kremlin propaganda tools. Yet the event, and the context, has changed a lot. In Valdai's early years, Russia was growing at 7 per cent a year. Oil prices - and Russia's oil output - were shooting up; a consumer society was taking off. Moscow basked in its membership of the dynamically developing Brics group. Now, growth is half its pre-crisis peak, and Russia's intelligentsia has fallen out of love with Mr Putin. While there are pro-Kremlin voices, Valdai has become something of a forum for hand-wringing by Russian academics about the state of the country (shielded by a "Chatham House" format that guarantees their anonymity). Last year's event, three weeks before parliamentary elections, as experts bemoaned then Prime Minister Putin's decision to return for a third presidential term, foreshadowed the street protests that followed. This year's, in St Petersburg and Moscow this week, has sidestepped politics by taking Russia's economic development as its theme. But the hand-wringing has scarcely been less. Russia's pre-crisis growth model, experts agree, is exhausted. Oil prices are unlikely to rise much, Russia's oil output has peaked. Consumer spending is no longer exploding. So now Russia badly needs investment, domestic and foreign. But a lousy business environment is holding back both. Under an expert scenario presented at Valdai, even with continued high oil prices but without an improved business climate, annual Russian growth between now and 2030 would average 3.1 per cent. Under "moderate" oil prices, it would be 2.1 per cent. With the same scenario forecasting average global growth of 3.7 per cent over the period, Russia's share of world output would fall - a far cry from the bullish Brics vision of the mid-2000s. The poor climate is also contributing to capital flight of tens of billions of dollars a year. And lack of opportunity and stifling politics are prompting scores of the country's best and brightest to leave. A striking poll discussed at Valdai found 68 per cent of Russians with above-average incomes wanted their children to study and work abroad, 37 per cent wanted them to live outside Russia for good. Today's Russia, says a prominent economist, is "exporting oil, money and people." What frustrates the experts is that they broadly agree about what should be done; indeed, government filing cabinets are stuffed full of action plans. Strengthen the rule of law, to protect property rights and fight corruption; improve democratic and market institutions; and introduce more competition into politics and the economy. Yet even while the discussions were happening, events seemed to be moving in the opposite direction. There was Rosneft's $55bn takeover of TNK-BP - the biggest reconsolidation of the oil industry under state control for 20 years - and pressure on opposition activists that had some opposition-linked Valdai participants texting anxiously. [But] Many Valdai experts see no political will to push through tricky reforms, for fear of angering vested interests, and leaving some worse off. And that reluctance is associated, above all, with the conservativism of the man at the top. Says one senior Russian, "We're all dependent on the will and the mind of a single person." There is some understanding, too, for Mr Putin, who must hold together what one sociologist says is not one Russia, but three. About 20 per cent of the population, an outward-looking urban class working largely in private businesses, are the "locomotive." But then there are those who rely on the state for jobs, or for handouts, with very different priorities. Launching bold reforms to satisfy the 20 per cent risks detaching this "locomotive" from the rest of the train, whose passengers still largely see Mr Putin as their protector. Valdai's foreign participants will see Mr Putin on Thursday, not for dinner but a meeting billed as shorter and less freewheeling. Yet while the format of the questions may be different from previous years, the answers seem likely to be the same.