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Video by James CREEDON

Latest update : 2009-01-29

The annual World Economic Forum has convened in Davos, Switzerland. Russian PM Vladimir Putin urged the world to avoid sliding into 'economic selfishness' and called for a mutual trust with the West to fight the global economic downturn.

Read more: Can Davos stem the crisis?



REUTERS - Russian Prime Minister Vladimir Putin, striking a conciliatory tone towards the West, decried militarisation and called on Wednesday for "mutual trust" to fight the global economic crisis.

Putin, who presided over a big increase in defence spending in his previous post as president, told the World Economic Forum that militarisation was not the answer to the problems posed by the financial crisis.

"We are against spending more money on military efforts," he told delegates in a speech broadcast live on television. "We have to make international relations less dangerous ... and we must continue with disarmament measures".

Shifting away from the harsh rhetoric he has used in the past against the United States, Putin instead spoke of "our partners in America" and said Moscow believed Washington was interested in "collaborating in joint, constructive work".

Following Russia's war with Georgia and a series of corporate woes last year, investors dumped Russian stocks, making the country's markets among the world's worst performing. Putin suggested Moscow wanted to win them back.

"We will keep up the policy of openness to foreign investment," Putin said. "We are convinced that those who create attractive conditions for global investment today will become the leaders in restoring the world economy."

The Russian premier, who still dominates government at home despite leaving the Kremlin in May, did not announce any specific measures to flesh out his words.

Much of his speech was dedicated to analysing the world financial crisis, which Putin likened to a "perfect storm".

The world should not depend excessively on a single reserve currency, he said. Instead, he favoured the appearance of
several strong reserve currencies with more transparency surrounding their economic policy.

Russia has previously called for the rouble, which is not yet fully free floating, to be made a regional reserve currency but Putin did not refer specifically to this initiative.

His speech was short on specific measures but the premier did repeat Moscow's calls for a rethink of the role of international institutions to develop a new, more effective architecture for the world economy.

"So that the unipolar world does not become a world of chaos
and uncertainty, the system of global regulators based on
international law ... must be strengthened," Putin said.

"That is why it is so important to rethink the role of leading international organisations and institutions."

Putin said that "fundamental asset values" should form the basis for reform of the world's accounting and audit standards, as well as ratings agencies.

He also warned against the "blind belief" that increasing the role of the state in the economy would resolve all the problems created by the crisis.

Russia has been using state money to prop up the banking system and to bail out key companies during the crisis.

The Russian premier acknowledged that the financial crisis had affected his country "in an extremely serious way" and said it had exposed some key weaknesses: excessive dependence on production and exports of raw materials and a weak financial market.


Date created : 2009-01-28