With Kristalina Georgieva suspected, the deal with the IMF could get complicated

In recent days, the negative news from China they hit Argentina hard. The stock market collapse of the Colossus of Evergrande – which took place yesterday in most of the world markets, but which particularly sank the Argentinian newspapers, the most affected in the region – is aggravated by the controversy that began to arise around Kristalina Georgieva, the head of the International Monetary Fund and a fundamental element in advancing the prospects for a deal with the Alberto Fernández administration.

A few days ago, it was learned that an investigation was underway into Georgieva’s conduct when the Bulgarian economist held a high post at the World Bank (WB), hence he would have pulled the strings in favor of China.

An independent investigation released on September 16 concluded that, when she was executive director of the World Bank, Georgieva was among those in charge of the organization that presses staff to change data in favor of China in 2017 edition of ‘Doing Business’ annual report, the bank’s flagship publication.

This happened as WB executives were involved in delicate negotiations with Beijing over the bank’s loan capital.

Georgieva, appointed IMF managing director in 2019, told IMF staff on Friday that the allegations “They are not true.” But if the investigation is successful and jeopardizes its mandate, it will amount to an additional difficulty for Argentina and your need to reach an early agreement with the agency.

“Neither in this case, nor before nor after, I pressured the staff to manipulate the data. I would ask them to check once, twice, three times, but never change, never manipulate what the data tells us, ”Georgieva said, according to The New York Times.

But according to Nobel laureate in economics Paul Romer, chief economist of the World Bank at the time of Georgieva, members of the IMF “will have to decide if they feel comfortable with her and she will continue in that position. I think that they should think about their options“This was stated in an interview with AFP.

Romer, who resigned in January 2019 after going public about his concerns about “Doing Business”, criticized him for seeking “cover” and “bleach” questions that worried him about the report.

The United States will play a crucial role in determining Georgieva’s future, as Washington holds the largest voting stake in the IMF. “These are serious discoveries.”the US Treasury said in a statement. “Our main responsibility is to defend the integrity of international financial institutions.

The World Bank’s board commissioned the investigation from law firm WilmerHale, which reviewed tens of thousands of documents and interviewed more than three dozen current and former employees.

A spokesperson said that the IMF’s board of directors “is currently examining this case “, without providing further details.

In light of the survey, the World Bank removed the “Doing Business” ranking, which ranked countries based on their trade regulations and economic reforms, and put governments in competition for a higher position in order to win. ‘attract investors.

This week, Georgieva attends the United Nations General Assembly in New York. She will also participate in the annual meetings of the IMF and the World Bank in early October.

Parallel paths

The paths of Kristalina Georgieva and Martín Guzmán meet, and this goes beyond the obvious reasons that have to do with the negotiations that Argentina and the International Monetary Fund have for local debt. Is that for different reasons, the two reach the final stage of the weakened negotiation.

Guzmán’s weakness is associated with the crisis of the ruling party after the defeat of PASO. The Minister of the Economy has seen his position hang by a thread after the results of the polls and the criticisms that the economy has received from the K wing, more precisely from Vice-President Cristina Kirchner.

Guzmán was ratified in his post and the need to achieve a good port with the IMF, building on the good personal relationship he has with Kristalina, is the main reason that keeps you afloat.

However, Kirchnerism will not facilitate the path of agreement. Cristina opposes the ten-year deadline for the repayment of the debt of US $ 54,000 million with the IMF and wants the payment plan to be extended to 20 years, which is not envisaged in the menu of IMF programs.

Besides, expansion of public spending To improve the electoral chances for November, it will be in the sights of the IMF, which advocates an adjustment of the budgetary accounts. In this context, questions towards Georgieva, which leave her in a weak position, do not help to improve things either.

QA