© Reuters
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The managing director of the International Monetary Fund criticized as “false and untrue” the findings of the independent investigation into her role in the World Bank’s Doing Business reports while she was working there as chief executive. The report, which is not a World Bank document but was among the arguments for ending the report, says it has been pushing for data to be selected so that China can improve its position in the rankings.
In a statement quoted by Reuters, which she plans to present to the IMF’s board, Georgieva accused the office of former World Bank President Jim Yong Kim of the United States of manipulation.
According to her version, she intervened to block a proposal by a member of his cabinet to include Hong Kong in the evaluation of China in Doing Business 2018, which would significantly improve the country’s place in the annual ranking of the report. Reuters has asked Kim for a reaction, but there is no reaction yet.
A week ago, the bank spread report of the law firm “WhilmerHale” to the Executive Council of the institution, which described what was found about the actions of Kristalina Georgieva and especially the former Minister of Finance Simeon Djankov. The lawyers explicitly emphasized that the findings were theirs alone, not those of the World Bank, and later announced that they were working on a second report to identify “potential illegal conduct by staff” in connection with data irregularities.
Georgieva has already publicly denied, as did IMF staff, allegations of her role in the investigation. But in a document released by Reuters on Friday, she went further in her criticism in a statement to the fund’s board.
The text said that the findings of the inspection contained “false and false insinuations … that my colleagues and I at the World Bank had inflated a country’s ranking in Doing Business in exchange for a commitment to participate in the capital increase.”
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The report says that in 2017, she personally took on the task of persuading member states to participate in the World Bank’s capital increase, and this is probably the main motive for China to be satisfied with its ranking, which turned out to be 7 positions. weaker than the previous year.
David Malpas, the bank’s current president, said WilmerHale’s findings spoke for themselves, but did not comment in detail.
“Let me be very clear: Nothing like this has happened and something like this will never happen while I am in charge,” added Kristalina Georgieva.
Regarding the case of adding Hong Kong to China’s performance indicators, she said her efforts to prevent this from happening demonstrated her concern to maintain the integrity of World Bank data.
Regarding the WilmerHale investigation, Georgieva said it wrongly suggested that she had asked her officials to manipulate data on China to meet Beijing’s expectations. She regrets that her colleagues at the bank “did not believe that they could speak openly and raise questions about the accuracy of the data” and that she worked to have better communication.
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Kristalina Georgieva, the first head of the IMF in a developing country, received support from some former colleagues, but calls for her resignation have multiplied.
The IMF board met for the first time on Tuesday and decided to meet again soon to hear more details from the fund’s ethics committee.
In the United States, which has always played a crucial role at the helm of the IMF, including because of the weight of the vote, a key congressman expressed concern Friday. According to Maxine Waters, chairwoman of the House Financial Services Commission, the revelations about “China’s improper influence” in the World Bank and Georgieva’s role “in manipulating Doing Business at the request of the Chinese government” are “quite alarming.”
“This undermines the World Bank’s reputation and calls into question the current IMF leadership, where data integrity is critical to its mission and where undue influence by any force of interest could jeopardize the stability of the global financial system,” added Water, quoted by Reuters.
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Criticism, including the World Bank’s decision to suspend the Doing Business reports, was made last week by Florida Sen. Marco Rubio, a Republican, and Sen. Bill Haley, a senior Republican on the International Trade and Finance Subcommittee on the Banking Commission.
Georgieva was directly criticized by former chief economist and Nobel laureate in economics Paul Romer, who described her management style roughly as described in the law firm’s report. “He was ready to do whatever it took without following any guidelines,” he told Reuters.
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