There is a lot at stake – for the head of the International Monetary Fund, Kristalina Giorgio, as well as for the World Bank, the largest development bank in the world.
At its core, it is about the political manipulation of the Doing Business report. This highly acclaimed World Bank report assesses the quality of the investment climates in 190 countries around the world each year. The higher a country ranks, the better opportunities it can hope for in the fierce competition for foreign direct investment.
This isn’t the first time Doing Business has been criticized for cheating on individual country rankings. The World Bank itself has already acknowledged “irregularities” with respect to countries such as Saudi Arabia and the United Arab Emirates and has temporarily suspended the report.
Pressure from China resulted in?
But what the recently published study revealed by an independent law firm sheds light on it all: According to this, current IMF chief Georgievoa is said to have actively worked toward China in the Doing Business report during her time at the World Bank in a better position.
In fact, China had fallen seven places in the 2018 rankings – which would undoubtedly have meant a huge loss to the image of the world’s second largest economy. But Georgieva pushed through a different measurement method in the responsible team. This is the only reason why China has been able to maintain its current rank of 78, according to a report by US law firm Wilmer Hill. All this happened at a time when the World Bank was vying to get China’s approval for a significant capital increase.
Georgieva denies these allegations. It is a presumption of innocence.
The integrity of the World Bank is damaged
However: if what the report accuses of must be confirmed, it is a massive political influence that calls into question the integrity of the entire World Bank institution. The current head of the International Monetary Fund, Kristalina Giorgio, is also under enormous pressure. Ironically, at a time when both institutions are already under attack due to the Covid pandemic.
The weight of the accusations against the institutions will also depend on the World Bank itself. and their will to ensure more transparency and better governance. For now, she has suspended her Doing Business report.
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