Russian President Vladimir Putin called yesterday for the creation of a new world economic order that gives greater clout to fast-growing emerging nations.

Days after attending a Group of Eight summit in Germany, Putin suggested that club was outdated and failed to reflect a shift in economic power away from the industrialized West to countries like his own.

"If 50 years ago, 60 percent of the world's gross domestic product came from the G7, now it's the other way round, and 60 percent of the world's GDP is produced outside," Putin said in a speech to a major economic conference.

He also took aim at financial organizations such as the International Monetary Fund and World Bank, saying they were created in "a completely different reality" and had lost relevance in the fast-changing global economy.

Today's international economic organizations "look archaic, undemocratic and awkward" by protecting the interests mainly of developed economies, Putin lamented.

"Today protectionism ... often comes from developed countries that have set up this structure," Putin said. "In order to stimulate trade and investment it is worth thinking about creating a regional Eurasian institute on free trade that could take advantage of the positive experience of the WTO."

Russia is enjoying an unprecedented spell of economic growth that has enabled it to pay down its foreign debts and accumulate foreign exchange reserves of over $400 billion - the world's third largest.

Putin said the world needed to reduce its dependency on the dollar as a reserve currency, and plugged the rouble as one alternative. Russia abolished capital controls last year.

"We need several financial centers and several reserve currencies," Putin told an audience of international chief executives and government leaders attending the St Petersburg International Economic Forum.

Putin declared Russia open to foreign investment, highlighting opportunities to invest in the power generation sector, now undergoing reforms to create market competition, and in infrastructure.

But he called for industrialized nations not to throw up barriers to Russian companies seeking to invest abroad.

"We see how in developed countries despite the doctrine of free investment there are completely different approaches," he said.

"It turns out that foreign investment is not always seen as positive and foreign participation is practically closed in those sectors such as infrastructure, telecoms and energy."

Source: China Daily/Agencies