Kristalina Georgieva suspected | She is being questioned for an alleged favor to China

The Current IMF Director Kristalina Georgieva, to deal with World Bank survey, an entity that he managed between 2017 and 2019, before assuming the Fund. The Bulgarian economist’s questioning is based on a alleged irregularity committed in favor of China and other countries. These countries would have been positioned artificially high in the ranking of economies easy to do business, according to a survey commissioned by the World Bank.

The accusation is very serious because it explicitly involves Georgieva with former World Bank President Jim Yong Kim in a maneuver to favor China while negotiating with this country a capital injection for the World Bank. China was ranked in the ranking of the report To do business 2018 in the put 78 when it should have fallen to 85. The extent of the negative impact for Georgieva, who is leading negotiations with Argentina for a new credit program, is not yet clear.

“Changes in China’s information in the report To do business 2018 seems to be the product of two types of pressure exerted by the management of the World Bank: 1) pressure from President Kim to change methodology to improve China’s score; and 2) the pressure exerted by CEO Kristalina Georgieva to apply specific changes to China’s data to improve its ranking position at the same time that the country should play a central role in the campaign to raise the capital of the Bank, ”says the report commissioned by the World Bank from the law firm WillmerHale.

“I absolutely do not agree with the findings or interpretations of the data irregularities investigation and its relation to my role in the report To do business World Bank 2018, “responded in a statement IMF number one Kristalina Georgieva, who also briefed the Fund’s board on this matter and assured that he will continue with his usual duties.

Pressure

The document that reflects the investigation within the World Bank warns that during the preparation of the report To do business 2018, the management of the entity negotiated the capital increase on behalf of the member countries. At the same time, the Chinese government was showing increasing interest in how it would be noted in such a report.

The problem was that The technical department responsible for preparing the report had calculated that China would drop from 78th to 85th in the standings., because although the country has shown improvements in the ease of starting a business, competing countries have reportedly carried out more reforms in this regard.

According to the report, World Bank President Jim Yong Kim was allegedly involved with Georgieva for modify the methodology and thus improve the position of China. The device would have consisted in raising the score for the section “facilities for setting up a business” and “legal rights”. This allowed China to climb seven places and thus retain its 78th place. The report assures that Georgieva told the official responsible for implementing these changes that he would have made “something for multilateralism“and thanked him for the help that allowed him to” solve the problem “with China.

The report also revealed alleged irregularities in the ranking of Azerbaijan, Saudi Arabia and the United Arab Emirates in the ranking. To do business 2020. It was the last in the series, because the World Bank, following the scandal, decided to stop the publication.

Last year’s report put New Zealand, Singapore and Hong Kong on the podium. China climbed positions to rank 31st and the Argentina, in 126. The subject was also picked up by the United States Department of the Treasury, whose spokesperson Alexandra LaManna said, “Our primary responsibility is defend the integrity of international financial institutions“.