A UN advisor has suggested that a basket of currencies - including a regional currency in Asia - could replace the US dollar in shaping the global financial system.

"I think China should play a cooperative role with Japan, South Korea and other Asian countries to introduce a regional currency while the world is trying to replace the old reserve currency system," Jeffrey Sachs, special advisor to UN Secretary General Ban Ki-moon, told China Daily on Wednesday. Sachs is also professor of Columbia University.

Top banker proposes setting new global reserve currency

He said China's central bank governor Zhou Xiaochuan has come up with an innovative idea to introduce a global currency in an effort to redefine the rigid global financial regime, which has undergone no major change since World War II.

"However, I think the US dollar, British pound, euro and a regional currency in Asia can shape a basket of global reserve currencies with their own special drawing rights," said Sachs, who is with the UN delegation attending the G20 summit.

He believes the US's previous supply side monetary policies and the US dollar's monopoly were the roots of the financial crisis.

However, Sachs was more reserved about the idea of introducing a global currency to replace the US dollar and said China should cooperate with Japan, South Korea and some other countries.

Sachs hoped the G20 leaders combined stimulus packages, economic development and sustainability when designing polices for growth.

He said stimulus packages can rescue the world's economy, and the ensuing development can ensure the whole world, not merely rich countries, is able to share in the benefits. Sustainability, meanwhile, can address the world's grave risks of climate change, stress on the water supply and loss of biodiversity.

He said the world's 3 billion poor, especially the 1 billion poorest of the poor, are suffering terribly from the crisis, and the situation could become worse.

"But the pity is that the poor have got zero attention so far, while many countries are busy bailing out banks and businesses," Sachs said.

(China Daily April 3, 2009)