Manuel calls for multilateral IMF

London - The International Monetary Fund must be reformed to prevent a slide into nationalism and protectionism, South African Finance Minister Trevor Manuel told the Financial Times.

The paper said South Africa would call not just for developing countries to be given greater weight in the governance of the IMF, but for the creation of a new executive body in which ministers and central bankers would have greater powers.

"It is rather strange that high-powered central bankers and government ministers are convened simply to advise civil servants," Manuel told the Financial Times' Friday edition.

South Africa is the only African country represented in the G20, whose finance ministers are meeting in London this weekend to plot a roadmap out of the financial crisis.

South Africa and Australia are chairing a G20 committee on the IMF. Manuel is separately chairing a panel of experts looking at ways to make the institution a more effective global financial watchdog.

Manuel said there were worrying signs the recession had revived protectionist tendencies and the danger of implosion in eastern Europe would be the "elephant in the room" at the London summit.

"When G20 leaders met in Washington in November they took a strong position against nationalism and protectionism," he said. "This hasn't happened."

"There are banks that have indicated that they won't lend outside their own shores if they have any governmental support."

But Manuel later told South African radio that while protectionism was a worry, he had taken heart from a United States call for leading economies to work together to stimulate the world economy.

"The signal from the US Treasury Secretary Timothy Geithner yesterday (Thursday) is clearly a trend in the right direction," Manuel told Talk Radio 702. "I think it is the first time we have actually had a signal like that."

- Reuters