The position of International Monetary Fund (IMF) chairman Kristalina Georgieva is under pressure over a scandal over political interference at the World Bank, her former employer.
Bulgarian Georgieva (68), who switched from World Bank to IMF in 2019, is accused of tampering with the World Bank ranking Ease of Doing Business. This mapped out per country which obstacles exist in doing business. The higher a country was on the index, the easier it would be to do business there, according to the World Bank.
Georgieva and her staff would have ensured that China did not fall in the 2018 rankings, according to a damning evaluation of the index by the American law firm Wilmer Hale.
After the publication of this report, commissioned by the World Bank itself, the World Bank decided to stop the ranking altogether earlier this month. The index – often quoted as an indicator of the investment climate in a country – had been controversial for some time: it is susceptible to manipulation.
The report also describes politically motivated changes in the 2020 ranking for the countries of Azerbaijan, Saudi Arabia and the United Arab Emirates. With that rankings Georgieva would otherwise have had nothing to do.
The Wilmer Hale report accuses Georgieva of playing “a key role” in “data changes for China” in the index. A senior employee who had messed with the data – which would prevent China from dropping from 77th to 85th in 2018 – was thanked by Georgieva. She also allegedly drove to a manager’s house just before the rankings were published to see a paper version, “presumably” to verify the changes, the Wilmer Hale report said.
According to the report, Georgieva was very keen to maintain good relations with China. The World Bank, which is financially based on the capital of member states, hoped that the Chinese would deposit more money. However, the Chinese would not be happy with their low spot on the ‘Doing Business’ list, and the fact that they were in danger of falling even further.
Also read this profile of Georgieva (2019): The name Georgieva pops up at every top position
Georgieva vehemently denies the allegations made in the report. They are “false” and “false,” she said in a statement to the IMF board, from which news agencies quoted last Friday. She claims to have intervened to prevent manipulation with the Chinese data. According to Georgieva, employees of the then World Bank president, Jim Kong Kim, had suggested adding Hong Kong’s data to China’s data so that China would come out better. Kim declined to comment on Georgieva’s allegation to news agencies.
Call for resignation
Key member states of the IMF and the World Bank, such as the United States and China, have not (yet) commented on the issue. But the influential British weekly The Economist last week called on Georgieva to resign in a commentary.
As IMF president, she can no longer make credible decisions on issues surrounding China, according to the weekly, which believes the IMF’s “credibility” is at stake.
And US Congresswoman Maxine Waters, chair of the Congressional Financial Services Committee, speaks of China’s “improper influence” at the World Bank and believes Georgieva’s position at the IMF is now “under discussion.”
The IMF’s fall annual meeting, October 11-17 in Washington, is in danger of being overshadowed by the scandal.