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Ahead Of Summit, Iran Says Capitalism Close To Collapse

Iran's Mahmud Ahmadinejad (right) welcomes his Pakistani counterpart Asif Ali Zardari in Tehran.

TEHRAN (Reuters) -- Iranian President Mahmud Ahmadinejad has told regional leaders meeting in Tehran to discuss the global economic crisis that the capitalist system was close to collapse.

Opening a one-day summit of the 10-nation Economic Cooperation Organization (ECO) including Turkey, Pakistan, and other neighbors, he also suggested a "single currency" should be used in trade between the group's members.

"After the collapse of the closed socialist economy, the capitalist economy is also on the verge of collapse," Ahmadinejad said in his televised speech.

"The liberal economy and the free market have failed," said Ahmadinejad, who often rails against the West.

Like other big oil producers, Iran is facing falling revenue after crude prices plunged about $100 a barrel from a peak of $147 in July, hurting its main source of income. It is also struggling with double-digit inflation.

Iran, Turkey, and Pakistan are the founding members of the organization, which was set up in 1985 and now includes seven other regional states, Afghanistan among them.

The Tehran meeting is expected to discuss ways to boost trade and economic cooperation in a region that boasts major energy resources.

Ahmadinejad made a series of recommendations, including the creation of an ECO development and trade-bank and currency cooperation.

"The process of obtaining one single currency in the trade and exchanges among members, and in the next stages with other countries and neighbors, should be designed," he said.

Crisis Into Opportunities

Turkish President Abdullah Gul said he believed regional countries had the potential to turn the economic crisis into opportunities, with its natural and other resources.

He called for a lowering of regional customs tariffs to boost trade and increased transport, and energy cooperation.

Afghan President Hamid Karzai said the narcotics trade was hurting Afghanistan's economic and social development and asked ECO to help in fighting the problem.

Afghanistan, which produces 93 percent of the world's heroin, has been ravaged by decades of civil war and a U.S.-led international coalition is currently battling Islamist Taliban insurgency in the Central Asian state.

Analysts say combating drugs is one area where Iran, which shares a long border with Afghanistan, shares an interest with its old foe the United States.

In a swift overture towards Tehran, the new U.S. administration of President Barack Obama last week said it would invite Iran to a meeting later this month to discuss Afghanistan. Iran has said it would consider the request.