Russia calls for new economic world order*

By Oleg Shchedrov
Reuters
Sunday, June 10, 2007; 8:16 AM

ST PETERSBURG, Russia (Reuters) - Russian President Vladimir Putin on
Sunday called for practical steps to redraw the world economic order to
reflect the growing role of fast-growing emerging nations.

He told an economic forum in St Petersburg many global trade and
financial institutions tailored to meet the interests of a few key
economies were ineffective and pointed to flexible regional groupings as
an alternative.

Putin told the gathering of foreign officials and top executives 60
percent of the world's GDP was produced outside the Group of Seven (G7)
leading nations -- the United States, France, Germany, Britain, Japan,
Italy and Canada.

"The interests of stable economic development demand the creation of a
new architecture of international economic relations based on trust and
mutually beneficial integration," Putin said, days after attending a
summit of the Group of Eight industrial nations, which includes Russia.

Putin, who has pledged to stop the Group of Eight from turning into a
club of "fat cats," said the principle of international investment was
not applied fairly in practice.

Making an apparent reference to the rebuffs Russian companies have
received when trying to invest in some Western markets, Putin said:

"We see the doctrine of free investment being replaced in the developed
countries by completely different approaches."

"It turns out that foreign investment is not always seen as positive and
foreign participation is practically closed in sectors such as
infrastructure, telecoms and energy."

ALTERNATIVES

Putin said Western protectionism was damaging the work of the World
Trade Organisation (WTO), of which Russia wants to become a member.

"Today protectionism, which the WTO is meant to fight, often comes from
developed economies," he said, adding that new regional unions and
agreements were already being formed.

Putin made clear he saw the Commonwealth of Independent States (CIS) --
a grouping of 12 ex-Soviet states -- as one of potential core structures
of the new world.

Russia, resurging after years of post-Soviet decline, is building up its
positions in ex-Soviet states, especially in the energy-rich countries
of Central Asia.

Last month it signed deals with Turkmenistan, Uzbekistan and Kazakhstan
to revive the Soviet-era united system of gas pipelines, which will help
Russia strengthen its role of the monopoly supplier from the region.

But Kazakh President Nursultan Nazarbayev, who spoke after Putin, poured
cold water on his optimism, saying the CIS had failed to become an
effective instrument of cooperation.

"The inertia of separation (in the CIS) turned out to be stronger than
integration efforts."

Nazarbayev also said Kazakhstan's energy policy would not be driven by
political considerations. "We need different routes and it is natural
that oil and gas will flow along routes that will turn out most
beneficial for us," he said.

Putin also rang a skeptical note about the current financial system
based on few currencies and financial centers.

"There is only one possible response to this challenge -- the creation
of several international reserve currencies and more financial centers,"
he said.