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Emerging nations show new power at summits

(Agencies)
Updated: 2009-06-17 13:15

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 foreign exchange 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.

Special coverage:  SCO & BRIC Summits Related readings:  SCO leaders vow concerted action  Russia shows its political clout by hosting Bric summit  BRIC gets increasing recognition: Researcher  Crisis speeds BRIC rise to power: Goldman's O'Neill  China offers $10 billion loan to SCO

"Such a type of coordination will allow us to better explain our positions to each other and work out a novel path to resolving international financial problems and the reform of international financial relations," Medvedev told 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 US dollars and bonds, has been very cautious about the these ideas, which moved the value of China's dollar holdings down on Tuesday.

The SCO leaders also welcomed Iranian President Mahmoud Ahmadinejad, making his first foreign trip to attend the summit since his disputed re-election.

Ahmadinejad arrived a day late in Yekaterinburg after mass protests against his disputed victory in Tehran but Kremlin spokeswoman Natalia Timakova said the SCO presidents had congratulated Ahmadinejad on his victory.

"America is in the grasp of political and economic crisis," Ahmadinejad told the SCO leaders in a speech which touched on the Palestinian issue and reform of the world order.

"The United States and its allies are unable to deal with the crisis," he said through a translator.

On the sidelines, Indian Prime Minister Manmohan Singh met Pakistani leader Asif Ali Zardari for the first time since the Mumbai attacks.

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