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发帖数: 1 | 1 IMF Chief Called Out on Pressure to Lift China Ranking in Report
Eric Martin
September 16, 2021, 5:24 pm
(Bloomberg) -- International Monetary Fund Managing Director Kristalina
Georgieva was called out Thursday by the World Bank, her previous employer,
for applying pressure to boost China’s position in a ranking of economies.
Georgieva said she disagreed with the findings, compiled by an outside law
firm at the World Bank’s direction.
The World Bank found such serious ethics issues in its probe of the “Doing
Business” report that it decided to abandon the series entirely, a
statement released in Washington showed.
China’s position in the 2018 report, released in October 2017, should have
been seven places lower -- at No. 85 rather than remaining at 78 -- the
World Bank said in a review released in December.
“The changes to China’s data in Doing Business 2018 appear to be the
product of two distinct types of pressure applied by bank leadership on the
Doing Business team,” the World Bank said in a report Thursday. The bank
cited Georgieva, along with an adviser, for “pressure” to “make specific
changes to China’s data points in an effort to increase its ranking at
precisely the same time the country was expected to play a key role in the
bank’s capital-increase campaign.”
‘Disagree Fundamentally’
Georgieva served as chief executive officer of the World Bank prior to being
chosen to succeed Christine Lagarde as head of the IMF, the development
lender’s partner in the Bretton Woods system.
“I disagree fundamentally with the findings and interpretations of the
Investigation of Data Irregularities as it relates to my role in the World
Bank’s Doing Business report of 2018,” Georgieva said in a statement. “I
have already had an initial briefing with the IMF’s Executive Board on this
matter.”
Georgieva told the IMF board at a meeting Thursday before the news came out
that the report was forthcoming, but that she was going to keep to her work
as usual, according to people familiar with the matter.
While her alleged actions were taken while she was at the World Bank, they
have been referred to the IMF’s ethics committee within the fund’s board
of directors, the people said, asking not to be named as the deliberations
were private. That panel consists of the chief IMF representatives -- known
as executive directors -- from Brazil, France, Russia, the U.K. and an
official representing the group of Iran, Morocco and Pakistan.
U.S. Reaction
The U.S. Treasury, which manages the country’s engagement with the IMF and
World Bank, said it was reviewing the report. The U.S. has an outsize role
in decisions at the Washington-based lenders because of the weight of its
voting power. Many Republican lawmakers have opposed expanding support for
the World Bank and IMF, and Thursday’s news could renew GOP criticism.
“These are serious findings and Treasury is analyzing the report,”
Treasury spokesperson Alexandra LaManna said. “Our primary responsibility
is to uphold the integrity of international financial institutions.” A
National Security Council spokesperson later also said that the report was
troubling, and that the administration was committed to upholding the
integrity of institutions like the IMF.
Georgieva is expected to address the World Bank report at an all-staff
meeting of the IMF on Friday, according to people familiar with the plans.
An IMF spokesman said that that forum was previously scheduled to discuss
IMF policy priorities ahead of the annual meetings of the fund and the World
Bank next month.
The probe was produced by the law firm WilmerHale, which was retained by the
World Bank executive board’s ethics committee -- the body responsible for
ethical matters involving board officials. The findings were shared with the
World Bank’s executive directors Wednesday, and the board authorized their
release.
Detailed Account
From mid-2017 to April 2018, World Bank management was “consumed with
sensitive negotiations” over boosting the lender’s capital, and China at
the time was “apprehensive” about how its ownership share would be
recalculated as a result of that process, the WillmerHale report said.
World Bank President Jim Yong Kim, the institution’s top leader at the time
, was overseeing the talks along with Georgieva, and both of them pointed in
interviews to the tensions surrounding the process, WillmerHale said.
Against that backdrop, Chinese officials repeatedly told Kim and other top
World Bank officials that the 2017 Doing Business report had failed to
reflect China’s reforms, the report said. As it became clear that the draft
2018 report would show a drop in China’s ranking, staff discussed options
including incorporating data from Taiwan and Hong Kong into the mainland’s
rating, the report showed.
Georgieva, who in an Oct. 18, 2017, meeting represented that she was now
overseeing the issue, ruled out incorporating Hong Kong data for political
reasons. Georgieva asked a “Mr. Djankov” to guide the Doing Business
report to final publication, and he worked with the unit to “identify
changes to China’s data that would raise the country’s score,” the
WillmerHale findings showed.
Georgieva’s Role
After searching for data points that wouldn’t also alter other country’s
ratings -- such as putting greater weight on major cities -- officials
concluded that adjusting China’s “legal rights indicator” was an “ideal
vehicle” thanks to differing expert opinions on the effect of Chinese law,
the report said. Tweaking the assessment helped China keep its prior ranking
, and “Mr. Djankov” then authorized publication.
“Georgieva’s actions following changes to China’s data confirm her
involvement,” the review found. WillmerHale cited her thanks, after the
changes, to the senior director for Development Economics for “doing his ‘
part for multilateralism,’” and her visit to the home of the Doing
Business manager the weekend after the report was published to thank the
manager for resolving the China problem, the report showed.
WillmerHale identified “no evidence” Kim had directly ordered illegitmate
changes to China’s data, although the Doing Business manager said “it was
clear that aides in President Kim’s office were acting on his behalf,” the
report showed.
The Doing Business report plays a notable role in emerging markets, with
governments often showcasing moves up in ranking in appeals for foreign
investment. But the integrity of the ratings has been the source of heated
debate in recent years. Paul Romer quit in 2018 as the World Bank’s chief
economist after questioning changes to Chile’s order in the report.
Read More: World Bank Corrects Country Rankings After Probe of Altered Data
The WillmerHale probe also looked at issues surrounding the ratings of Saudi
Arabia, United Arab Emirates and Azerbaijan.
“After reviewing all the information available to date on Doing Business,
including the findings of past reviews, audits, and the report the bank
released today on behalf of the Board of Executive Directors, World Bank
Group management has taken the decision to discontinue the Doing Business
report,” the World Bank said Thursday.
The IMF and World Bank have confronted a number of ethics issues over the
years. Former French Finance Minister Dominique Strauss-Kahn resigned as
head of the fund in 2011 after charges of sexual assault in a New York hotel
room, which were eventually dropped. In 2007, Paul Wolfowitz, a top
Pentagon official in the Bush administration, stepped down as head of the
World Bank over his involvement in arranging a pay increase and promotion
for his companion.
Lagarde, while leading the IMF, was convicted of negligence in 2016 by a
Paris court over her handling of a multimillion-euro dispute during her time
as France’s finance minister nearly a decade before. She didn’t face a
fine or prison term, and went on to become the head of the European Central
Bank. |
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