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Russia calls for new economic world order

By Oleg Shchedrov Sun Jun 10, 8:16 AM ET

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.

Russia calls for new economic world order (http://news.yahoo.com/s/nm/20070610/ts_nm/russia_forum_putin_dc;_ylt=AoYe9zUf6xdrMl70JlqaoxB0bBAF)

Trusting Putin is like trusting the devil.  The so-called New Economic World is just a ruse for the New World Order.

Thoses are my thoughts, as well.  I just wanted to give someone else, a chance to say so.

Coming soon.

China calls for closer US ties in economic crisis
By CHRISTOPHER BODEEN, Associated Press Writer Christopher Bodeen, Associated Press Writer Sat Mar 7, 2:36 am ET

BEIJING – China is looking to next month's meeting of world leaders in London to boost confidence and global coordination in dealing with the world financial crisis, its foreign minister said Saturday.

The G-20 meeting, scheduled for April 2, will bring together Chinese President Hu Jintao and leaders of the world's major economies in a quest for ways to stabilize financial markets, lessen fears of a lengthy recession, and begin overhauling the global financial system.

The summit should "play a role in boosting the public's confidence," Foreign Minister Yang Jiechi said at a news conference held on the sidelines of the annual legislative session.

"In this regard we are willing to work with the United States and other countries in the world to weather the storm and make joint efforts to tackle the difficulties brought by the financial crisis," Yang said.

China has so far appeared reluctant to offer major cash injections to the International Monetary Fund and other global financial bodies, and Yang offered no specifics on what proposals Beijing would bring to London.

Instead, he reiterated Beijing's contention that the biggest help China can offer the global economy was to keep its own financial house in running order.

"To maintain the steady and relatively fast development in China is in itself the biggest contribution China can make to international cooperation in meeting the financial crisis," Yang said.

China was also helping by aiding developing nations, especially those in Africa, and reminding countries of their similar commitments, Yang said. He also said the recent visit to Europe by a Chinese trade delegation led by Commerce Minister Chen Deming that resulted in the signing of deals potentially worth $15 billion was beneficial.

"It is imperative for all countries to put the needs of people first and to take a down-to-earth approach in pursuing economic development, social progress and international equity and justice," Yang said.

In the wide-ranging news conference Yang said China would continue to invest its nearly $2 trillion in foreign exchange holdings on the basis of ensuring security, liquidity and increasing value. Hundreds of billions of those holdings have been invested in U.S. Treasury and U.S. policy-makers have sought assurances that Beijing will keep buying American government debt.

Yang, who will visit Washington in preparation for the London summit, said relations with the new U.S. administration of President Barack Obama had gotten off to a "good start" and the two countries' leaders had found ample common ground in their phone conversations.

China calls for closer US ties in economic crisis (http://news.yahoo.com/s/ap/20090307/ap_on_re_as/as_china_foreign_affairs/print;_ylt=Arxb8gCWcSemdrtvL28y9zD9xg8F;_ylu=X3oDMTB1MjgxN2UzBHBvcwMxNARzZWMDdG9vbHMtdG9wBHNsawNwcmludA--)

Its time for a single economic system that utilizes a one world currency. Coming really soon so we can go home even sooner. The sooner the better. :D :D

Congress pushes for single African currency
Written By:O'brien Kimani    , Posted: Mon, Mar 02, 2009

African economists and top academicians under the aegis of Africa Union are meeting in Nairobi at a conference aimed at the creation of a single African currency to  managed by an African Central Bank to increase continental co-operation.

The meeting is expected to lay out strategies aimed at establishing an Euro style monetary system for the 53 African countries.

Opening the 1st Congress of African Economists at the Kenyatta International Conference Centre, the Minister of State for Planning, National Development and Vision 2030, Wycliffe Oparanya said the creation of a single African currency calls for hard political and policy decisions to make such development a reality.

The Minister said that the continent should keep pace with the rest of the world in areas of monetary cooperation and integration to build synergies for development, peace and security citing the success of the European Union Euro.

He observed that the regional economic blocks, crafted by the Economic Commission for Africa  in the 1960's had strengthened regional integration and economic development and was well positioned vehicle for establishing regional monetary fund that would provide the platform for a single currency and Central Bank.

Oparanya said introduction of the currency has the advantage of promoting economic efficiency and stability, reducing the cost of doing business in the continent, encouraging cross-border trade and investments.

‘European countries have been successful in adoption of a single currency, Africa can also do the same,' he said

The Minister said the integration has to overcome many challenges along the way and will need time before realizing any achievement but urged the economists to be committed to the process for successful outcome.

Present in the ceremony were the Permanent Secretary, Ministry of State for Planning and National Development and Vision 2030, Dr. Edward Sambili and Commissioner for Economic Affairs, African Union, Dr. Maxwell M. Mkwezalamba.

The congress, Mkwezalamba said, is intended to create a platform for economists in academia and research to contribute to the ongoing policy dialogue to find broad based solutions to socio-economic problems of the continent.

The process of establishing a common currency was mooted by Africa leaders during the signing of the Abuja Treaty in 1991.

The purpose was to empower the continent economicaly and politically.

This proposals was to be fronted by the African Economic community a monetary arm of the AU.

The three days conference is expected to deliberate on the possibility and hand in its findings to AU heads of state at a summit in July this year.

According to the arrangements three financial institutions namely African central bank, African monetary fund, and the African investment banks are to be created if approved the three institutions will be established in Nigeria, Libya and Cemeroon by 2028.

Congress pushes for single African currency  (http://www.kbc.co.ke/story.asp?ID=55904)

Stiglitz Calls for Global Solution to Crisis

Nobel Prize-winning economist Joseph Stiglitz argues that the only way to fix the world's economic crisis is to act globally. Speaking at the Development Policy Forum in Berlin on Monday he said the reform of the world's financial institutions wasn't going fast enough.

The World Bank's finding sounds very dramatic: According to a report issued by the international organization on Sunday, the global financial crisis is particularly hurting developing countries. The study adds that poor countries are often heavily dependent on exports, have no financial reserves and are not being issued any loans. As a result, these countries have no way to fight back against the financial crisis.

According to Robert Zoellick, the head of the World Bank, the only solution to this problem is to foster close cooperation between industrialized countries, international financial institutions and private companies. "The global crisis demands a global solution," Zoellick says. "We need investments in security networks, in infrastructure and in small and medium-sized companies in order to create jobs and avoid social and political unrest."

According to Joseph Stiglitz, however, the winner of the 2001 Nobel Prize in economic sciences, the solution lies elsewhere. Speaking at a Development Policy Forum held Monday in Berlin's Federal Ministry of Economic Cooperation and Development, Stiglitz proposed a more fundamental reform of the world's financial institutions, saying the current tempo of reform is "too slow."

Stiglitz is a man who knows what he's talking about. The mild-mannered American with the meticulously trimmed beard was one of Bill Clinton's chief economic advisers in the 1990s and former chief economist at the World Bank from 1997 to 2000 (until he resigned in protest).

Stiglitz explained that, in his opinion, today's institutions are not adapted to today's issues. Too many countries are left on the sidelines (at events such as the G-8 and the G-20 meetings) or have too little say (at institutions such as the IMF and the World Bank). As a result, these institutions lack a certain degree of legitimacy. "The UN is the only institution that can push through the necessary measures," Stiglitz said. He also suggested that the United Nations and a world economic council, such as the one Chancellor Angela Merkel proposed in early February at the World Economic Forum meeting in Davos to be an economic analogue to the UN Security Council, should help engineer a global financial system.

For Stiglitz, such suggestions aren't meant to be seen as pipe dreams. In fact, as he sees it, the crisis offers an opportunity to turn his proposals into reality. Stiglitz currently chairs the commission of experts charged by the UN to investigate possible reforms to the international monetary and financial system. In early June, the commission is scheduled to submit its proposal at a UN conference. As Stiglitz describes them, the proposals need to be radical because: "We need a new start."

Stiglitz Calls for Global Solution to Crisis (http://www.spiegel.de/international/world/0,1518,612423,00.html)

Bernanke's speech to Council on Foreign Relations
Tue Mar 10, 2009 12:58pm EDT

WASHINGTON (Reuters) - The following is the full text of U.S. Federal Reserve Chairman Ben Bernanke's speech on Tuesday to the Council on Foreign Relations on "Financial Reform to Address Systemic Risk."

The world is suffering through the worst financial crisis since the 1930s, a crisis that has precipitated a sharp downturn in the global economy. Its fundamental causes remain in dispute. In my view, however, it is impossible to understand this crisis without reference to the global imbalances in trade and capital flows that began in the latter half of the 1990s. In the simplest terms, these imbalances reflected a chronic lack of saving relative to investment in the United States and some other industrial countries, combined with an extraordinary increase in saving relative to investment in many emerging market nations. The increase in excess saving in the emerging world resulted in turn from factors such as rapid economic growth in high-saving East Asian economies accompanied, outside of China, by reduced investment rates; large buildups in foreign exchange reserves in a number of emerging markets; and substantial increases in revenues received by exporters of oil and other commodities. Like water seeking its level, saving flowed from where it was abundant to where it was deficient, with the result that the United States and some other advanced countries experienced large capital inflows for more than a decade, even as real long-term interest rates remained low.

The global imbalances were the joint responsibility of the United States and our trading partners, and although the topic was a perennial one at international conferences, we collectively did not do enough to reduce those imbalances. However, the responsibility to use the resulting capital inflows effectively fell primarily on the receiving countries, particularly the United States. The details of the story are complex, but, broadly speaking, the risk-management systems of the private sector and government oversight of the financial sector in the United States and some other industrial countries failed to ensure that the inrush of capital was prudently invested, a failure that has led to a powerful reversal in investor sentiment and a seizing up of credit markets. In certain respects, our experience parallels that of some emerging-market countries in the 1990s, whose financial sectors and regulatory regimes likewise proved inadequate for efficiently investing large inflows of saving from abroad. When those failures became evident, investors lost confidence and crises ensued. A clear and highly consequential difference, however, is that the crises of the 1990s were regional, whereas the current crisis has become global.1

In the near term, governments around the world must continue to take forceful and, when appropriate, coordinated actions to restore financial market functioning and the flow of credit. I have spoken on a number of occasions about the steps that the U.S. government, and particularly the Federal Reserve, is taking along these lines.2 Until we stabilize the financial system, a sustainable economic recovery will remain out of reach. In particular, the continued viability of systemically important financial institutions is vital to this effort. In that regard, the Federal Reserve, other federal regulators, and the Treasury Department have stated that they will take any necessary and appropriate steps to ensure that our banking institutions have the capital and liquidity necessary to function well in even a severe economic downturn. Moreover, we have reiterated the U.S. government's determination to ensure that systemically important financial institutions continue to be able to meet their commitments.

At the same time that we are addressing such immediate challenges, it is not too soon for policymakers to begin thinking about the reforms to the financial architecture, broadly conceived, that could help prevent a similar crisis from developing in the future. We must have a strategy that regulates the financial system as a whole, in a holistic way, not just its individual components. In particular, strong and effective regulation and supervision of banking institutions, although necessary for reducing systemic risk, are not sufficient by themselves to achieve this aim.

Today, I would like to talk about four key elements of such a strategy. First, we must address the problem of financial institutions that are deemed too big--or perhaps too interconnected--to fail. Second, we must strengthen what I will call the financial infrastructure--the systems, rules, and conventions that govern trading, payment, clearing, and settlement in financial markets--to ensure that it will perform well under stress. Third, we should review regulatory policies and accounting rules to ensure that they do not induce excessive procyclicality--that is, do not overly magnify the ups and downs in the financial system and the economy. Finally, we should consider whether the creation of an authority specifically charged with monitoring and addressing systemic risks would help protect the system from financial crises like the one we are currently experiencing. My discussion today will focus on the principles that should guide regulatory reform, leaving aside important questions concerning how the current regulatory structure might be reworked to reduce balkanization and overlap and increase effectiveness. I also will not say much about the international dimensions of the issue but will take as self-evident that, in light of the global nature of financial institutions and markets, the reform of financial regulation and supervision should be coordinated internationally to the greatest extent possible.

Too Big to Fail

In a crisis, the authorities have strong incentives to prevent the failure of a large, highly interconnected financial firm, because of the risks such a failure would pose to the financial system and the broader economy. However, the belief of market participants that a particular firm is considered too big to fail has many undesirable effects. For instance, it reduces market discipline and encourages excessive risk-taking by the firm. It also provides an artificial incentive for firms to grow, in order to be perceived as too big to fail. And it creates an unlevel playing field with smaller firms, which may not be regarded as having implicit government support. Moreover, government rescues of too-big-to-fail firms can be costly to taxpayers, as we have seen recently. Indeed, in the present crisis, the too-big-to-fail issue has emerged as an enormous problem.

Bernanke's speech to Council on Foreign Relations (http://www.reuters.com/articlePrint?articleId=USTRE52939S20090310)

Nobel-prize winner backs world currency

From correspondents in Astana, Kazakhstan | March 11, 2009
Article from:  Agence France-Presse

KAZAKH President Nursultan Nazarbayev has won backing for his plan for a single world currency from an intellectual architect of the euro currency, Nobel-prize winner Professor Robert Mundell.

Nazarbayev, speaking at an economic forum in the glitzy new capital he has built on the Kazakh steppe, defended his proposal for the "acmetal'' world currency saying it might "look kind of funny'' but was not.

And he received intellectual support from the Canadian economist Prof Mundell, who helped lay the intellectual groundwork for Europe's single currency.

"I must say that I agree with President Nazarbayev on his statement and many of the things he said in his plan, the project he made for the world currency, and I believe I'm right on track with what he's saying,'' Prof Mundell said, adding the idea held "great promise''.

Mr Nazarbayev and Prof Mundell urged the Group of 20 leading developed and developing economies to form a working group on the proposal at their summit on the global economic crisis in London on April 2.

"We should deliver our thoughts and the thoughts of this conference to the leaders of those countries,'' Mr Nazarbayev said, referring to the G8 and G20 nations.

Mr Nazarbayev, who has held his post since Soviet times and has seen his oil-rich state hit badly by the crisis, unveiled his proposal last month and said yesterday the UN should oversee the currency's introduction.

Though a boost for what might seem an other-worldly plan, Prof Mundell has previously suggested single currencies are only appropriate for countries with similar economies.

Mr Nazarbayev's coining of "acmetal'' combines the Greek word "acme,'' meaning peak or best, and "capital.''

Nobel-prize winner backs world currency (http://www.theaustralian.news.com.au/story/0,25197,25173126-12377,00.html)