South African President Thabo Mbeki on Sunday called for enhanced legitimacy through representation and accountability as well as recapitalization of the World Bank and the International Monetary Fund (IMF).

Addressing the International Monetary Conference in Cape Town, he said, "parts of that effort should also be to enhance legitimacy, and this should be achieved by a better representation and accountability."

"The distribution of voting shares in the funds and bank need reform the better to reflect the more plural economic world we live in now, compared to that of the 1940s, as well as to prepare for the changes to come," the president urged.

Mbeki said that both institutions needed recapitalization to enable them to meet the development challenges of the countries that would make up their core clientele in coming years, and gains to legitimacy would translate into gains in effectiveness.

"We must have the courage to make them happen," he said, adding that legitimacy could also be enhanced with reform of procedures by which heads of the funds and bank were chosen, and the recent resignation of Paul Wolfowitz from his position as head of the bank had reopened the debate about that process.

While Robert Zoellick was to be congratulated on his appointment, he agreed that future appointments should be made using an open and transparent election process with candidates not restricted by nationality.

He noted that it was difficult to overstate the importance of the bank and the IMF to countries requiring their resources to avoid major reductions in their public spending or severe adjustments to their balance of payments.

They played a key role in signaling to private investors and major global financial centers of the new readiness of countries for foreign investment, he said.

Speaking about the world economy, he said, "international financial crises are more likely to be a hazardous feature of our common future than a phantom of past. "

"This is one price we pay for a liberated international financial system and a steady elimination of national controls on capital flows," he said. "It is a cost that we can help to mitigate and to ensure against by working to improve the multilateral financial institutions."

Source: Xinhua