Putin Says Russia Wants New
International Economic Infrastructure
June 10, 2007 (EIRNS)The following release was issued today by the Lyndon LaRouche Political Action Committee.
Addressing the St. Petersburg International Economic Forum today, Russian President Vladimir Putin diagnosed existing international economic and financial institutions as non-functional, called for "a new architecture of international economic relations" based on mutual benefit, and pushed Russia's vision of Eurasian economic development, including energy security and transportation corridors. His remarks on the need for new financial arrangements are drawing major attention around the world, though Putin spoke mainly in terms of currency diversification (i.e., moving out of the U.S. dollar) and the creation of regional economic institutions. He raised the possibility of denominating Russia's exports in the Russian ruble.
Putin began with the shift in the world economy over the past 50 years, whereby "yesterday's seemingly hopelessly backward countries are today the world's fastest growing economies," while the G-7 nations no longer account for the majority of world economic activity. "New players" from the developing sector are making their mark, "including in high-tech and science-intensive sectors," said Putin.
The Russian President continued, "I am convinced that generalities about a just distribution of resources and investments can solve nothing. In the interests of stable development, a new architecture of international economic relations must be formed relations built upon trust and mutually beneficial integration. Therefore, without forgetting about healthy competition, we should move towards the formation of common, mutually beneficial interests and ties."
Putin discussed this in terms of relations within the CIS, and in energy policy in general, noting also the importance of Kazakstan, Turkmenistan, and Uzbekistan as international energy suppliers. He said that Russia's most recent energy policy decisions, including on building the Northwest Gas Pipepine and the Burgas-Alexandroupolis oil pipeline, will boost "the energy security of the entire Eurasian continent."
Putin also stressed transportation, saying: "We shall also initiate projects in the area of transport, telecommunications, and logistics. These are projects that effectively unite the countries of Europe and Asia.... This means the modernization of existing international transport corridors and the creation of new ones, linking Europe with Central Asia and the Far East." He reiterated his proposal for a second, upgraded Volga-Don Canal, giving modern cargo vessels from the Caspian Sea littoral countries an outlet to the world's oceans, through the Black Sea.
"A new architecture of economic relations," said Putin, "also implies a fundamentally different approach to the work of international organizations." The World Trade Organization, in particular, the Russian President called exemplary of "archaic, undemocratic, and inert" decision-making. Furthermore, he pointed out that the WTO's leading "advanced economies" are the biggest offenders, in granting themselves exceptions to "free trade" practices; earlier in the speech, Putin complained about the difficulties Russia's large companies face in making investments abroad. Maybe Eurasian regional free trade institutions would do better, Putin suggested.
As for the international financial organizations (the IMF and World Bank), here is where Putin made his currency proposals. Calling these institutions out-of-date, he said that "the world financial system, essentially linked to one or two currencies and a limited number of financial centers, no longer reflects the current strategic requirements of the global economy. The fluctuations of these currencies have an adverse impact on the financial reserves of entire nations, and the development of some economic sectors worldwide. There is only one response to this challenge: the emergence of several world reserve currencies, and several financial centers. Therefore, the preconditions must be created today for a diversification of assets in the world financial system." Then he talked about upgrading the ruble, and using it to denominate Russia's exports.
Putin concluded by discussing Russia's role in Eurasia. He said that even during the difficult 20th century, Russia developed "scientific, educational, and industrial experience," which has helped uplift Russia and other new players in the world economy. Calling for "a free exchange of ideas, technologies and innovations," Putin said that "joint work and partnership will allow the Eurasian continent to become truly a space of peace, trust, and cooperation."