Le Monde with AFP, September 17, 2021
According to an investigation, Kristalina Georgieva would have acted not to devalue the ranking of China in an annual report of the World Bank for which she worked in 2018. The official disputes these findings.
IMF Managing Director Kristalina Georgieva is under fire after an independent investigation commissioned by the international institution was released on Thursday, Sept. 16, in which it emerged that she allegedly lobbied in 2017 to change a report by the World Bank – where she was stationed at the time – to go easy on China.
Georgieva said she « disagreed » with the findings of the investigation, which interviewed dozens of current and former employees and sifted through 80,000 documents. In response to the revelations, the World Bank announced that it was halting publication of its annual « Doing Business » report. It said it was working on a « new approach to assessing the business and investment climate. »
In 2017, China had rather disliked its 78th place in this report, which establishes a ranking of countries with the most favorable climate for economic activity and business, based on several parameters. To prevent it from falling further in the following year’s ranking, and in order to obtain its signature in sensitive negotiations, the Washington-based institution used strong means, according to this investigation by the law firm WilmerHale, commissioned by the World Bank’s ethics committee.
It shows that « pressure – direct and indirect » was exerted by senior officials in the office of the then president of the institution Jim Yong Kim – « presumably at the request » of the latter – to change China’s ranking. And shortly before the release of the 2018 edition, Kristalina Georgieva, then managing director of the World Bank, according to the investigation, requested the adaptation of the methodology and the modification of the criteria.
« The report speaks for itself »
Georgieva allegedly reprimanded a senior official at the institution for « mishandling the Bank’s relationship with China and failing to appreciate the importance of the Doing Business report for the country, » the investigation describes. Under pressure, his teams would then have changed some data, and allowed China to keep its 78th place instead of falling to 85th. The official initially reprimanded was praised for « doing his part for multilateralism ».
« The report speaks for itself, » said a Bank spokesperson.
Kristalina Georgieva, who takes over the IMF in October 2019, said on Thursday that she « fundamentally disagrees with the findings and interpretations » of the investigation « with respect to [her] role in the report » of 2018. « I have already held a meeting with the IMF board on this issue, » she added in the statement, which was sent to Agence France-Presse (AFP).
Nadia Daar, head of Oxfam International in Washington, welcomed the end of the « Doing Business » report, saying that this ranking « encourages governments to adopt destructive policies that increase inequality ».
The U.S. Treasury said it was analyzing the report, citing « disturbing findings. « Our primary responsibility is to preserve the integrity of international financial institutions, » the Treasury said in a statement
Toxic » culture
The changes in the methodology of the ranking had, in January 2018, pushed to resign the chief economist of the World Bank, Paul Romer, nobelized a few months later. The World Bank had at the time denied any political influence in the ranking. Romer expressed concern about « arbitrary » changes that had significantly altered the rankings of several countries, including Chile.
When I asked these questions, Kristalina undertook a cover-up, a make-up, » explained the economist in an interview with AFP on Thursday. I was referring to people who lacked integrity. It was intolerable. »
« The methods of intimidation that are described in this report were real, » Romer assured.
Ongoing negotiations during the drafting of the 2018 ranking involved the World Bank’s historic $13 billion increase in resources, the signing of which required the support of U.S. President Donald Trump (who had opposed concessional loans to China) but also Beijing, which had agreed to pay more for the loans.
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