Thursday, October 28

Economist magazine calls for Georgieva to quit IMF over World Bank data scandal


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WASHINGTON — The Economist magazine on Thursday called for International Monetary Fund Managing Director Kristalina Georgieva to resign over her role in a China-related data-rigging scandal while at the World Bank, saying it has undermined the IMF’s credibility.

The influential London-based publication said in a scathing editorial https://www.economist.com/leaders/2021/09/25/why-the-head-of-the-imf-should-resign that an external investigation’s findings that Georgieva pressured staff for changes to the World Bank’s “Doing Business” rankings in 2017 to favor China compromises the IMF’s ability to act as the custodian of data for the world’s macroeconomic statistics.

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“The head of the IMF must hold the ring while two of its biggest shareholders, America and China, confront each other in a new era of geopolitical rivalry,” the Economist said, adding that critics of multilateralism are already citing the findings as evidence that international bodies cannot stand up to China.

“The next time the IMF tries to referee a currency dispute, or helps reschedule the debt of a country that has borrowed from China, the fund’s critics are sure to cite this investigation to undermine the institution’s credibility. That is why Ms Georgieva, an esteemed servant of several international institutions, should resign,” the editorial said.

It cited the allegation in the WilmerHale law firm’s report https://thedocs.worldbank.org/en/doc/84a922cc9273b7b120d49ad3b9e9d3f9-0090012021/original/DB-Investigation-Findings-and-Report-to-the-Board-of-Executive- Directors-September-15-2021.pdf that Georgieva, who at the time was the World Bank’s CEO, thanked a senior bank researcher for “doing his bit for multilateralism” in altering the China data.

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“Now she too should do her bit for multilateralism by falling on her sword,” the Economist said.

The World Bank’s “Doing Business” reports, now canceled, ranked countries based on their regulatory and legal environments, ease of business startups, financing, infrastructure and other business climate measures.

Georgieva, a Bulgarian who is a former World Bank economist and European Commission official, has denied the accusations in the WilmerHale report, saying last week they are “not true” https://www.reuters.com/business/sustainable-business/ imf-chief-spotlight-after-china-rigging-report-2021-09-17 and she has never pressured staff to manipulate data.

The IMF’s executive board is conducting its own review of the allegations and has emphasized “the importance it attached to conducting a thorough, objective and timely review.”

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An IMF spokesman declined comment on the Economist’s editorial. A US Treasury spokeswoman also declined comment beyond the Treasury’s earlier statement that it is analyzing “serious findings” in the WilmerHale report.

LAWMAKERS SEEK ANSWERS

Republicans in the US Congress who have been critical of Georgieva’s work at the IMF have stopped short of calling for her ousting.

Instead, three Republican members of the House Financial Services national security and development subcommittee sent a letter https://barr.house.gov/_cache/files/6/a/6a963516-15ab-4cf3-9dd5-74c2b5cd70b0/8188BD9289936633A1917C30E851F3F2.final- 2021-09-22—jfh-ab-ag-to-treasury-re-imf.pdf to US Treasury Secretary Janet Yellen requesting she report to Congress the Treasury’s review of the matter.

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Representatives Andy Barr, French Hill and Anthony Gonzalez asked Yellen to include information on Georgieva’s interactions with Chinese IMF officials in shareholding review discussions and during the decision making process for August’s $650 billion allocation https://www.reuters.com/article/us- g20-finance-imf-reserves/imf-650-billion-reserves-distribution-clears-last-hurdle-in-unprecedented-move-idUSKBN2F404Q of IMF monetary reserves known as Special Drawing Rights to all IMF member countries. China received about $42 billion worth of new SDRs.

“China feels entitled to a greater say in how these international organizations operate; its lack of commitment to multilateral values ​​demonstrates why it must not be allowed to,” the lawmakers wrote.

They also are seeking from Yellen to ensure “strict and transparent data integrity” in IMF and World Bank reports.

(Reporting by David Lawder and Andrea Shalal in Washington Editing by Will Dunham and Matthew Lewis)

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