- The Washington Times - Sunday, June 10, 2007

ST. PETERSBURG — Russian President Vladimir Putin yesterday criticized international economic institutions for protecting the interests of a select few developed countries and called for a new global economic order that would give rapidly growing developing economies a bigger role.

“The world is indeed changing before our eyes. Countries that yesterday seemed hopelessly behind are today the fastest-growing economies of the world,” Mr. Putin told a gathering of business leaders and government officials at an economic forum in Russia’s second-largest city of St. Petersburg.

“If, 50 years ago, 60 percent of the world’s [gross domestic product] came from [Group of Seven] countries, then today it is the other way around,” he said.

Mr. Putin lamented that today’s international economic organizations “look archaic, undemocratic and awkward” by protecting the interests mainly of developed economies.

“Today, protectionism which the WTO is intended to fight often comes from developed economies that set up this structure,” Mr. Putin told the conference.

Mr. Putin said the stalled Doha round of global trade talks were a sign of the problems with the organization, and he suggested the creation of new regional trade bodies.

“Old methods of decision-making at times don’t work.”

The talks have stumbled repeatedly since their inception six years ago in Qatar’s capital, largely because of wrangling between rich and poor countries over eliminating barriers to farm trade.

Russia remains the only major economy outside the World Trade Organization, the Geneva-based 150-member group that sets global trade rules. To join, Russia still needs to reach agreement with its tiny former Soviet neighbor Georgia, which protests Russia’s cultivation of strong ties with its two breakaway provinces.

Russia also is in ongoing WTO talks with the European Union. Although the European Union formally backs Russia’s WTO membership, issues including foreign investors’ access to Russia’s vast energy sector have complicated Moscow’s WTO application.

Russian moves to impose export duties on raw lumber were another area of concern, EU Trade Commissioner Peter Mandelson told reporters on the sidelines of the forum. Russia introduced the measure in a bid to spur processing capacity at home.

“This causes me a great deal of concern,” Mr. Mandelson said. “Any move to step back from the commitments Russia made in its deal with the EU in 2004 would be unwelcome. It would create a lack of confidence in Russia’s commitment to its undertakings.”

A slew of deals have been signed at the forum, testimony to the pull of Russia’s booming economy, despite political tensions. Economy Minister German Gref said yesterday that the agreements signed were worth $13.5 billion — four times more than forecast.

The centerpiece was the surprise signing of a multibillion-dollar deal between Boeing Co. and Aeroflot, whereby Russian’s flag carrier will acquire 22 Boeing 787 Dreamliner jets from the U.S. company, with deliveries starting in 2014.

Talks on the contract reportedly stalled as relations with the U.S. cooled.

In an apparent challenge to critics who say that Russia is shutting foreign investors out of key industries, Mr. Putin said many developed economies were guilty of blocking investment.

“It turns out that foreign investment is not always considered a good thing. … Russia quite the contrary wants to establish the most favorable regime for foreign investment. … Our country is open for foreign investment,” he said.

Mr. Putin also said that global financial markets have evolved around “one or two” currencies — an apparent reference to the euro and the dollar — and their fluctuations often have negative effects on many countries’ economies and financial reserves.

“There can be only one answer to this challenge: the creation of several world currencies, several financial centers,” he said.

Mr. Putin suggested that Russia eventually could seek to clear its foreign trade in rubles. Though analysts have said this is realistic only as a long-term goal, the ruble has risen substantially in the past year against the dual-currency basket of dollars and rubles that the Russian Central Bank uses as its main financial policy instrument.

Sign up for Daily Newsletters

Manage Newsletters

Copyright © 2020 The Washington Times, LLC. Click here for reprint permission.

Please read our comment policy before commenting.


Click to Read More and View Comments

Click to Hide