The Executive Board of the International Monetary Fund (IMF) on Tuesday met for an initial briefing from the Ethics Committee on the alleged role of the Fund’s Managing Director, Kristalina Georgieva in the World Bank’s ‘Doing Business’ 2018 report.
An independent investigation released by a law firm, WilmerHale, had on September 16 reported that high-ranking staff members at the World Bank rigged data in the 2018 and 2020 editions of its flagship “Doing Business” report in order to boost China’s ranking.
The investigation highlighted China’s willingness to interfere in multilateral institutions to advance its economic interests, and the challenge of maintaining the integrity of the current international system.
It alleged “direct and indirect pressure” on staff members by the former World Bank chief executive officer, Kristalina Georgieva (now Managing Director of the IMF), and a former World Bank President, Jim Yong Kim operating in a “toxic culture.”
WilmerHale had alleged that attempts were made in the days before the publication of Doing Business 2018 to raise China’s ranking from 85, such as incorporating data for Hong Kong into its scores.
When these efforts failed to deliver the desired results, the report alleged, Georgieva “became directly involved.”
The law firm’s report, Investigation of Data Irregularities, alleged that Georgieva directed Simeon Djankov, one of the founders of Doing Business, to guide the report to publication and that Djankov subsequently “worked with Doing Business management to identify changes to China’s data that would raise the country’s score and increase its ranking”.
It stated that three indicators of business conditions — starting a business, legal rights-getting credit and paying taxes — were modified, raising China’s score by almost a point and increasing its ranking by seven places to 78.
According to WilmerHale, the effort to please China appeared to have been driven by China’s important role in the World Bank as its third-largest shareholder.
The report stated that the push to boost China’s ranking came at a time when the bank’s management was, “consumed with sensitive negotiations” over a major capital increase, and China’s disappointment over a lower-than-expected score.
The World Bank in 2018, had announced a $13 billion-paid in capital increase that boosted China’s shareholding stake to 6.01 per cent from 4.68 per cent. While Georgieva said she fundamentally disagreed with the findings by WilmerHale, the World Bank decided to discontinue the upcoming “Doing Business” report over “ethical matters, including the conduct of former Board officials as well as current and/or former Bank staff.”
But in a bid to commence investigations on the alleged involvement of Georgieva, the IMF’s Executive Board met on Tuesday for an initial briefing from the Ethics Committee.
A statement by the IMF said the Board discussed the Ethics Committee’s deliberations so far and had a preliminary exchange of views on the report and the Managing Director’s statement in response to it.
The Executive Board emphasised the importance it attached to conducting a thorough, objective, and timely review and agreed to meet again soon for a further discussion.
In 2002, the World Bank introduced the ‘Doing Business’ report, whose annual rankings highlight which countries have adopted policies favourable to businesses and which haven’t — and how much they are improving or regressing.
Ndubuisi Francis in Abuja