IMF director blamed for pushing for China

IMF Managing Director Kristalina Georgieva has come under fire after the publication, Thursday, September 17, of an independent investigation commissioned by the international institution, in which she appears to have lobbied in 2017 to change a report from the World Bank – where she was stationed at the time – in order to spare China.

Mme Georgieva said to herself ” at variance “ with the conclusions of this investigation, the authors of which interviewed dozens of employees, current and former, and sifted through 80,000 documents. Faced with these revelations, the World Bank announced that it was stopping the publication of its annual “Doing Business” report. She said working on a “New approach to assess the business and investment climate”.

In 2017, China had little appreciated its 78e place in this report which establishes a ranking of countries with the most favorable climate for economic activity and business, according to several parameters. To prevent him from falling further in the ranking of the following year, and in order to obtain his signature in sensitive negotiations, the institution based in Washington used great means, according to this investigation by the law firm WilmerHale, mandated by the World Bank’s ethics committee.

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It emerges that “Pressures direct and indirect ‘ were exercised by senior officials in the office of the then president of the institution Jim Yong Kim – “Probably on demand” of the latter -, to change the ranking of China. And shortly before the publication of the 2018 edition, Kristalina Georgieva, at the time Managing Director of the World Bank, according to the survey, requested the adaptation of the methodology and the modification of the criteria.

“The report speaks for itself”

Mme Georgieva is said to have reprimanded a senior official of the institution for “To have mismanaged the Bank’s relations with China and not to have appreciated the importance of the report Doing Business for the country “, describes the investigation. Under the pressure, his teams would then have modified some data, and allowed China to keep its 78e place instead of falling to the 85e. The official who was initially reprimanded was praised for having “Does its share of the work for multilateralism”.

“The report speaks for itself”, confined himself to reacting a spokesperson for the Bank.

Kristalina Georgieva, who took over as IMF head in October 2019, said on Thursday that she was “Fundamentally disagree with conclusions and interpretations” of this survey ” in regards to [son] role in the report “ from 2018. “I have already held a meeting with the IMF board on this subject”, she added in this statement sent to Agence France-Presse (AFP).

The stopping of the “Doing Business” report was welcomed by Nadia Daar, head of Oxfam International in Washington, considering that this classification “Encourages governments to adopt destructive policies that worsen inequalities”.

The US Treasury informed him to analyze the report, citing “Worrying conclusions”. “Our primary responsibility is to preserve the integrity of international financial institutions”, said the finance ministry in a press release.

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“Toxic” culture

The changes in the ranking methodology had, in January 2018, prompted the resignation of the chief economist of the World Bank, Paul Romer, nobelized a few months later. The World Bank at the time denied any political influence in this ranking. Mr. Romer had worried about changes “Arbitrary”, which had significantly changed the ranking of several countries, including Chile.

“When I asked these questions, Kristalina undertook a work of concealment, a make-up, explained the economist in an interview with AFP on Thursday. I referred to people who lacked integrity. It was intolerable. “

“The methods of intimidation that are described in this report were real”, assured Mr. Romer.

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Negotiations underway during the drafting of the 2018 ranking concerned the historic increase of 13 billion dollars in the resources of the World Bank, the signing of which required the support of US President Donald Trump (who had opposed concessional loans to China) but also from Beijing, which had agreed to pay more for the loans.

Interviewees finally reported a culture “Toxic” within the team in charge of the “Doing Business” report, notably from Simeon Djankov, who was then an advisor to Kristalina Georgieva.

The World with AFP

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