Developing world leaders show new power at summits

By Guy Faulconbridge
YEKATERINBURG, Russia (Reuters) - Leaders of emerging world powers discussed reducing their reliance on the United States, as well as boosting security and trade at two summits on Tuesday hosted by Russia but excluding the West.
The range of topics on the agenda and the line-up of presidents attending showed the growing economic and political power of the world's emerging nations, including India and China, and their desire to find new ways of co-operating.
Host president Dmitry Medvedev of Russia hailed the Urals Mountain city of Yekaterinburg as "the epicenter of world politics" in his remarks, adding that the need for major developing world nations to meet in new formats was "obvious."
The so-called BRIC nations of Brazil, Russia, India and China called for reform of international financial institutions, sweeping changes to the United Nations to give a bigger role to Brazil and India and a "stable and predictable" currency system, according to a draft communique.
Iran's president, re-elected in a disputed vote, fired a salvo at the United States, the leaders of India and Pakistan had their first one-to-one meeting since the Mumbai attacks and the four top emerging market economies held their first summit.
A common thread running through the Shanghai Cooperation Organization (SCO) summit in the Urals city of Yekaterinburg, and the Brazil, Russia, India, and China (BRIC) meeting which followed it, was discussion about a new world order less dependent on the United States.
Medvedev told a news conference that existing reserve currencies, including the U.S. dollar, had not performed their function and said it was time for change.
"We are likely to witness the creation of a supranational reserve currency...which will be used for international settlements," Medvedev said. "The existing currency system is not ideal." Countries should use their national currencies more for trade, he added.
The Kremlin's top economic aide, Arkady Dvorkovich, said the International Monetary Fund (IMF) should expand the basket of its Special Drawing Right (an international reserve asset) to including the Chinese yuan, the Russian rouble and gold.
The dollar fell 0.9 percent against a basket of major currencies on world markets after Medvedev's comments. The slide "underlines the likely sensitivity of the FX market to comments emerging from today's meeting," analysts at Barclays wrote.
Between them, the four BRIC nations represent around 40 percent of the world's population and 15 percent of its GDP. Russia and China lead the SCO, a security and economic co-operation forum which also includes four Central Asian states, plus Iran, Mongolia, India and Pakistan as observers.
"Such a type of coordination will allow us to better explain our positions to each other and work out a novel paths to resolving international financial problems and the reform of international financial relations," Medvedev said in his comments to BRIC leaders.
Underlining its growing economic influence abroad, Chinese President Hu Jintao offered Central Asian states $10 billion of credit support to help counter the global economic slump, though he did not mention the proposals for diluting dollar dominance.
Beijing, with its massive holdings of U.S. dollars and bonds, has been very cautious about the these ideas.
In another snub to the West, the SCO leaders welcomed Iranian President Mahmoud Ahmedinejad, making his first foreign trip to attend the summit since his disputed re-election. Continued...
Source: Reuters