Saturday, November 27

IMF Director Kristalina Georgieva accused of favoring China


An internal audit indicates that it could exert “pressure” to favor China’s position in the ranking of the 2018 ‘Doing Business’ report

Kristalina Georgieva, current director of the International Monetary Fund
Kristalina Georgieva, current director of the International Monetary FundLUDOVIC MARINAFP

The actual Director of the International Monetary Fund (IMF), Kristalina Georgieva, has been accused by the world Bank to pressure his subordinates to make China a better position in the annual report ‘Doing Business’, which measures the economic dynamism of all the countries of the world. Georgivea, who before being director of the Fund was at the World Bank coordinating, among other activities, the preparation of said report, has issued a statement in which it states that “I fundamentally disagree with the findings and interpretations.” from the World Bank document. For the time being, that institution has decided to suspend the preparation of the report.

The The United States Department of the Treasury has declared to the newspaper ‘The Wall Street Journal’ that the matter is “serious”. Due to the size of its economy, The US has the right of veto in the Monetary Fund. In the statement, Georgieva explains that she has already had “an initial meeting with the Fund’s executive committee on this matter.”

The key to the controversy is an internal audit conducted by the US law firm WilmerHalle for the ethics department of the World Bank. The document, which is public, maintains that, in 2018, Georgieva, who then worked at the Bank, exerted “pressure” to “make specific changes to China’s ranking in an effort to increase its position in the rankings.”. The alleged action occurred when the World Bank member countries were negotiating a capital increase in which Beijing was expected to “play a key role.” The then president of the Bank, the American Jim Yong Kim, would also have pushed for China to come out better. As a consequence, that country pace to position 78, when it should have been at 85, according to the aforementioned analysis.

Since its inception, the ‘Doing Business’ report has become one of the most relevant and, at the same time, most controversial activities of the World Bank. On the one hand there is the methodological question, llev acountries like India to question the report’s findings that, in its first editions, was based on information supplied by third parties in the countries.

Almost all world rankings are a bit hammered, because not everything is comparable. Thus, for example, according to the competitiveness rankings carried out by the team led by the Columbia University professor, and very direct defender of the independence of Catalonia, Xavier Sala, for the Davos World Economic Forum, the Spanish judicial system is worse than that of China or Saudi Arabia. Given that the Spanish legal system does not contemplate whipping in public, nor that there is evidence that the State has created concentration camps to ‘re-educate’ around the 15% of Catalan men, the comparison seems to correspond, more than to the field of law, to that of psychiatrist.

The second aspect is that of national honor. At the time when the Bank was run by Paul Wolfowitz, who was considered by many to be the main promoter of the invasion of Iraq, which made him a very controversial character, there were reports that pointed out that the United States had pressured the bank to make that country appear higher in the ‘Doing Business Report’. Sometimes, however, it is more than national honor that is at stake. In many developing economies and emerging markets, having a good position in the document is an important element in your policy of attracting foreign investment.

According to the criteria of

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