“The report raises serious questions about her motivation during her stay at the World Bank,” the US IMF Representative to the IMF said in a statement.
A wave of criticism of Kristalina Georgieva after revelations that high-ranking World Bank officials, including her, had pressured employees to raise China’s position in the Doing Business ranking.
The report also cites cases of pressure to improve data on Saudi Arabia, the United Arab Emirates and Azerbaijan in the 2020 rankings, but found no evidence of management involvement in these cases.
The World Bank said in a statement that the decision to suspend the ranking was taken following an internal audit report that raised “ethical issues, including the conduct of former board members and current and / or former bank employees” and a wide-ranging investigation. by WilmerHale.
And the reactions on the topic were not late.
Former World Bank chief economist and Nobel laureate in economics Paul Romer criticized in an interview with AFP the “lack of integrity” of the bank’s former management team, including CEO Kristalina Georgieva, who later headed the IMF.
“When I raised some issues, Kristalina was trying to disguise, to cover up“He points out.” I was led by people who lacked integrity. It was unbearable, “Romer told AFP.
The economist accuses Georgieva of wanting to cover up disagreements over the methodology of a report that led Paul Romer to resign in January 2018. At the time, he was particularly critical of arbitrary changes to the methodology that were detrimental to other countries, especially Chile.
Romer said that when he worked at the World Bank, he did not know about the pressure exerted on the teams by the CEO on this issue. However, he had “doubts that such things could happen.”
Furthermore the investigation establishes “toxic” relations in the team responsible for this report, as well as an atmosphere of fear maintained by Simeon Djankov, one of the founders of “Doing Business” and former Minister of Finance of Bulgaria, who at that time was an adviser to Georgieva.
The investigation also proved that he was threatening his teams, claiming that he had friends in the ethics committee who would inform him of any complaints against him.
Djankov left the World Bank in March 2020, and signals of the problems first appeared in June 2020.
According to Paul Romer, the style of intimidation described in the report was real. “I didn’t feel comfortable thinking about continuing to work under Kristalina’s leadership. That’s why I made my claims public, just to be fired,” he explained in an interview.
Asked by AFP, the IMF and the World Bank declined to comment on Paul Romer’s allegations.
US Representative to the IMF French Hill, a publicist from Apansa and one of the most outspoken critics in the Congress on the glorification of the IMF The report raises serious questions about Georgieva’s motivation during her stay at the World Bank.. “If these allegations are true, then the MBF board should immediately assess its service at the highest level there,” he said.
Xill, a member of the Committee on Financial Services to the Chamber of Representatives, said he would ask the Minister of Finance of the United States, Janet Yellen, to take office. “Financial markets and politicians are counting on the expertise of international creditors, and this situation is tarnished,” he said.
Justin Candefyp, a senior contributor and observer to the World Bank at the Center for Global Development, said the report could affect the country. “The MBF is responsible for ensuring that the international economic statistics are respected and that the countries report in full,” he said. “It simply came to our notice then Geophysics as actively manipulating data for geopolitical purposes. That looks reprehensible. “
Last night, the World Bank (WB) announced that it has decided to suspend the preparation of its annual report “Doing Business” due to irregularities in the reports for 2018 and 2020.
An investigation into the data processing irregularities speaks of “pressure” from senior bank officials, including then-CEO Kristalina Georgieva, to upgrade China’s rating in 2017.
An investigation by law firm WilmerHale has revealed pressure on teams from Georgieva and former World Bank President Jim Yon-kim to benefit Beijing.
Kristalina Georgieva disagreed with the conclusions of the investigation, the authors of which questioned several dozen employees, past and present, and reviewed in detail 80,000 documents.
The IMF Executive Board is reviewing the ethical report on the actions of Managing Director Kristalina Georgieva, while she was a senior official at the World Bank (CEO). This was announced today by IMF spokesman Jerry Rice, quoted by Reuters.
Georgieva said she “fundamentally disagreed with the report’s findings and interpretations”, alleging that she and others in the World Bank’s leadership had pressured officials to raise China’s ranking in the Doing Business ranking. She informed the IMF Executive Board early Thursday.
“The IMF board is currently considering this issue,” Rice told Reuters, adding: “As part of the regular procedure on such issues, the ethics committee will report to the board.”
The World Bank scandal has shaken investors
Investors and activists have expressed concern today over revelations that the World Bank’s management, including Kristalina Georgieva, has pressured officials to increase China’s performance in an influential report that ranks countries according to how easy it is to do business. in them, informs Reuters.
The subsequent cessation of annual Doing Business reports could make it harder for investors to decide where to invest their money, they say.
“The more I think about it, the worse it looks,” says Tim Ash of BlueBay Asset Management. According to him, the reports, which have been published since 2003, have become important for banks and businesses around the world. “Money and investment are distributed on the basis of these series,” he said.
The Tax Justice Network activist group welcomed the Ethics Committee’s investigation.
“The bigger question is how, if possible, the Bank can eliminate the obvious corruption in the institution“, wrote the group ‘s CEO Alex Kobam on Twitter.
Economists say such reports – from the World Bank and other institutions – are useful but have long been vulnerable to manipulation.
They believe that some governments, especially in emerging markets that want to show progress and attract investment, could be obsessed with their position in the rankings, which value everything from taxes to legal rights.
The United Arab Emirates, which was 16th in the latest report for 2020, aimed to top the list in 2021, and Russia climbed to 28th place from the distant 120th position in 2011, reminds Reuters.
President Vladimir Putin has challenged the country to break into the top 20 by the end of the last decade. Asked to comment on the World Bank’s decision to suspend the rankings, Kremlin spokesman Dmitry Peskov said today: “The task of improving the business climate is not related to the existence of any ratings. Ratings are just a yardstick.”
According to Charles Robertson, chief economist at Renaissance Capital, the ranking of business conditions has been losing credibility for years. Some countries have hired investment firms, including his and even former government leaders, to advise them on how to improve their rankings.
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