US assesses what to do, Anne Krueger calls for resignation

The situation of the Managing Director of the International Monetary Fund, Kristalina Georgieva, is becoming more complex. While Treasury Department officials debate whether the United States, the largest shareholder of the IMF, must ask you to resign; economist Anne Krueger wrote a harsh column in which she withdraw to preserve the credibility of the Fund and the World Bank.

Kristalina Georgieva, appeared for the first Wednesday before the board of directors of the organization, which analyzes the denunciations which indicate that she lobbied in favor of China in the past, when she was head of the World Bank. The Bulgarian economist dismissed the accusations, but anyway, he had to give explanations to the board of directors of the organization, dominated by the G7 countries.

The 24-member board “Remains committed to a thorough, objective and timely review, and looks forward to meeting again soon to discuss further”, the IMF said in a statement.

Georgieva is accused of favoring China when she was director of the World Bank so that the Asian giant You will be better positioned in a report called Doing Business.

Treasury spokeswoman Alexandra LaManna told Bloomberg: “A review is currently underway with the IMF board and the Treasury has been pushing for a full and fair account of all the facts.” In addition, he added: “Our main responsibility is to defend the integrity of international financial institutions.

LaManna, however, would not say if the agency’s decision on Georgieva will be made public.

The executive board meeting lasted approximately five hours and it is expected that the organization will meet again on Friday, where CEOs could come to a common position, they noted.

To the evasions on the subject, to the absence of explicit support from the White House for Georgieva, and to the Treasury debates, also adds a very harsh column by Anna Krueger published this Thursday in Project Syndicate.

The North American economist, an old acquaintance of Argentina and who was the Fund’s number two under the administration of Horst Köhler, expressed in his editorial that Georgieva’s continuity jeopardizes the credibility of international institutions of Bretton Woods created in the post-war period to preserve global economic prosperity.

“The World Bank and the International Monetary Fund play a fundamental role in the global economy precisely because its independent research is universally recognized “. However, after the entity’s flagship report scandal, “urgent action is needed to regain public confidence “, specifies the economist at the beginning of his text.

The North American economist gave extensive detail on how Doing Business reports are carried out and stressed that “the key to the success of Doing Business, the publication “the most important of the World Bank” it is your “credibility”.

“Investigators have provided enough evidence to raise serious questions about the credibility and integrity of Doing Business.”, he pointed out.

And in this sense, the former number two of the IMF, underlined: “Trying to hide the classification of a country in a relationship is excruciating, not only because it undermines the credibility of the report, but also because it hurts other countries whose classification is modified by it ”.

Almost at the end, he ends by mentioning to the director of the IMF: “The actions denounced by Georgieva certainly raises serious doubts about its commitment to data integrity, even in his new role. “

“If you think that an IMF managing director is lending himself to pressure to change data and analysis, the credibility of the IMF’s work will be greatly diminished,” he said. And I add: “It is one thing for the CEO to urge the board to approve a program of questionable merit based on a report that gives an honest description of the situation, and it is quite another to pressure staff to change the numbers. “

“If Georgieva stays in her post, she and her staff will surely come under pressure to change data and rankings in other countries. And even if they resist, the reports they produce will be suspect. The work of the whole institution will be devalued. This perspective alone should be enough for the political masters of the IMF to find a new managing director whose commitment to the integrity of the work is beyond doubt», He concluded.

SN