The former managing director of the World Bank is accused of manipulation.
(Photo: dpa)
Washington Despite allegations of manipulation of a report in favor of China, the board of directors of the International Monetary Fund (IMF) has expressed its “full confidence” to Director Kristalina Georgieva. The Executive Board trusts its obligation to maintain “the highest standards of governance and integrity” at the IMF, the body said on Monday evening (local time) after the eighth meeting on the matter. Georgieva (68) has always denied the allegations against her. The Bulgarian, a former EU Commissioner, has been at the helm of the IMF since 2019.
US Treasury Secretary Janet Yellen, who represents the largest shareholder in the IMF, said she had spoken to Georgieva about the serious allegations. Without further direct evidence of Georgia’s role, the US sees “no basis for a change in the leadership of the IMF”. The Ministry of Finance will follow the processing closely. In order to strengthen the integrity of the data collection and the credibility of the IMF, “proactive steps” are necessary.
Georgieva is accused of influencing an important country ranking in favor of China on her previous top post at the World Bank. It is said to have put pressure on employees in 2017 to prevent China from slipping in the World Bank’s so-called “Doing Business” ranking, according to an investigation by a law firm commissioned by the World Bank in September. After the changes, China was able to stay in 78th place – without the intervention of management, the country would have slumped to 85th place.
The investigation report from September suggests that employees of the then World Bank President Jim Yong Kim and Georgiewa as CEO did not want to scare Beijing about an imminent major capital increase for the World Bank. After the data was changed, Georgieva is said to have thanked the responsible head of unit by saying that he had made a contribution to multilateralism.
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In the assessment of the business climate in other countries, the report is said to have included irregularities in some cases. The World Bank has now announced that it will abolish the much-cited ranking.
Scandal comes at an inopportune time for IMF and World Bank
The alleged manipulation of data is a serious accusation for the World Bank and the IMF. For the organizations based in Washington, the independent and non-political collection and compilation of international data is part of their core business. The data of the organizations are often also a basis for far-reaching decisions, for example when it comes to aid money.
The 24-member Executive Council, on which the IMF member states and shareholders are represented, last discussed the allegations against Georgieva on Friday, Sunday and Monday into the evening. The Council stated that steps would also be considered in the future to further strengthen the independence and integrity of data collection and analysis at the IMF.
The timing of the scandal came at the wrong time for the IMF and the World Bank, because this week of all times finance ministers, central bankers and representatives from the financial sector and development cooperation are gathering for the organizations’ annual meeting. Due to the pandemic, the meeting is only partly taking place in Washington, most of it happens online. Georgieva, for example, moderated an event with UN Secretary General António Guterres on Monday – although many viewers must have asked themselves whether Georgieva would be urged to resign anytime soon.
In Brussels, the economist Georgiewa was the Commissioner for Humanitarian Aid from 2010 to 2014, then until 2017 as the powerful Vice-President of the Commission for Budget and Personnel. After her post as Managing Director of the World Bank, she succeeded the French Christine Lagarde at the head of the IMF in 2019. Lagarde is now the head of the European Central Bank (ECB).
The IMF is seen as the fire brigade of the global financial system, able to save stiff states from bankruptcy in the event of financial or balance of payments crises. In the past, the IMF has often reacted sharply when stiff states manipulated economic data.
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