Medvedev calls for new reserve currencies

YEKATERINBURG, Russia – Russian President Dmitry Medvedev says the world needs new reserve currencies.

Medvedev told a regional summit Tuesday that the creation of new reserve currencies in addition to the dollar is needed to stabilize global finances.

Medvedev has made the proposal before. It reflects both the Kremlin's push for greater international clout and a concern shared by other countries that soaring U.S. budget deficits could spur inflation and weaken the dollar.

Airing it at a summit meeting underlined the challenge to U.S. clout.

Medvedev spoke at a summit of the Shanghai Cooperation Organization, which includes China and four Central Asian nations.

Later Tuesday he hosts a summit of the BRIC group of leading emerging economies — Brazil, Russia, India and China.

THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.

YEKATERINBURG, Russia (AP) — Russia played regional power broker Monday, hosting China and Central Asian nations for a summit that highlights the Kremlin's efforts to maintain clout in former Soviet territory and raise its profile in Afghanistan.

Moscow is expected to use the meeting of leaders from the Shanghai Cooperation Organization to try to cement the six-nation group as a counterbalance to the U.S. presence in strategic Central Asia.

Russian President Dmitry Medvedev opened the two-day meeting by saying the group would discuss the global financial crisis as well as the key issue the organization was created to address: regional security.

"Our organization has been created quite recently, but it has scored quite serious progress," he said.

Late Monday, Medvedev had what he called a "most productive and useful" meeting with Afghan President Hamid Karzai and he promised that Russia will help Afghanistan create "an efficient political system."

"We are very thankful for the assistance that Russia has given Afghanistan," Karzai responded, "particularly over the last seven years, during this difficult period of history when we have been fighting terrorism."

At a meeting later with Pakistani President Asif Ali Zardari, Medvedev said all nations needed to work together to fight terrorism — a call he repeated after he, Zardari and Karzai held a final meeting together.

"Many issues including the most difficult challenges our nations are facing today, such as terrorism and crime, can only be fought with collective efforts," Medvedev said. "If we can create efficient workable trilateral mechanism, that will benefit our nations."

The 8-year-old Shanghai Cooperation Organization is dominated by Russia and China and includes Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, with countries such as India, Iran and Pakistan holding observer status.

Medvedev also was expected to meet with Iranian President Mahmoud Ahmadinejad. The Iranian leader postponed his arrival in this Ural Mountains city until Tuesday, according to the Iranian Embassy in Moscow, during protests in Iran over his bitterly disputed re-election.

Amid efforts by Washington and Moscow to improve strained ties, the summit will be watched for signs of stronger support from Russia and its neighbors for American-led operations in Afghanistan. That will be a signal of the depth of Russia's determination to mend fences with the United States at a time of warming relations between the two countries.

While Moscow and its neighbors have stressed solidarity with the West on the need for stability in Afghanistan, Kremlin critics say they have used their combined clout in the past to confound U.S. efforts.

In 2005, the Shanghai Cooperation Organization supported Uzbekistan's eviction of U.S. forces from a base supporting operations in Afghanistan. In February, Kyrgyzstan announced it would evict U.S. forces from their only other Central Asian base — a decision widely seen as influenced by Russia. U.S. officials have said there is still hope for a deal to keep use of the Manas base.

Karzai has appealed to Kyrgyzstan to let coalition forces continue using Manas, and the Afghan leader could meet his Kyrgyz counterpart for talks during the summit.

Kremlin foreign affairs adviser Sergei Prikhodko said Sunday that the Shanghai Cooperation Organization has seen "more transparency" from the administration of President Barack Obama on U.S. policy toward Afghanistan and Pakistan. "The niches of interaction with Western countries, including the U.S., may be widened," he said.

Russia and the Central Asian countries already have allowed the transport of non-lethal military supplies across their territory.

Prikhodko did not say what the nations might do to increase cooperation, but made it clear they want a greater say in resolving the situation in Afghanistan.

Prikhodko also said the leaders will discuss broader security issues and the global financial crisis, as well as the situation on the Korean peninsula, but that no major statement on North Korea's nuclear activity was expected.

The summit will be followed late Tuesday by the first full-fledged summit of BRIC, a group linking the emerging economies Brazil, Russia, India and China.

Medvedev may repeat Russia's call for a new global reserve currency to augment the dollar, but Russia's finance minister over the weekend suggested that the dollar would remain the currency of choice for years to come.