Tag: doing business

IMF gets briefing on probe into China rankings at World Bank

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The International Monetary Fund said Monday its board of directors has been briefed by attorneys from the law firm whose investigation found that current IMF Managing Director Kristalina Georgieva and other officials pressured World Bank employees to alter data affecting the business rankings of China and other nations.

The IMF said the 190-nation lending agency’s board of directors met with representatives of the WilmerHale law firm as part of an on-going review of the issues raised by the firm’s investigation into the World Bank’s “Doing Business 2018” report.

The Doing Business report evaluated a country’s tax burdens, bureaucratic obstacles, regulatory system and other business conditions, and its rankings was used by some governments to try to attract investment.

The IMF said in a statement that the board board would soon meet with Georgieva as part of its review of the matter. The statement said the IMF’s board “remains committed to a thorough, objective and timely review” of the issues raised by the report.

The investigation prompted the World Bank to end the annual Doing Business reports. The report found that Georgieva, then the chief executive of the World Bank, and other senior World Bank leaders had pressured the bank’s economists to improve China’s 2018 ranking at a time when she and other officials were attempting to persuade China to support a boost in the World Bank’s funding resources.

The incident has led to calls for Georgieva to resign from the IMF’s top job. It has also served to underscore complaints that China has too much influence over global financial institutions.

Georgieva has denied all wrongdoing. “Let me be clear. The conclusions are wrong. I did not pressure anyone to alter any reports,” she said in a statement issued after the report came out last month.

Georgieva said she was looking forward to meeting with the IMF board to brief them on her actions.

The controversy is coming ahead of the annual meetings of the IMF and World Bank, which will take place next week in Washington. (AP) MRJ

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World Bank kills ease of doing business report after probe cites undue pressure on rankings, BFSI News, ET BFSI

Banking & Finance

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The World Bank Group on Thursday said it ended publication of its “Doing Business” report on country investment climates after a probe of data irregularities cited “undue pressure” by top bank officials, including then-Chief Executive Kristalina Georgieva, to boost China‘s ranking in 2017.

The World Bank said in a statement said that the decision came after internal audit reports had raised “ethical matters, including the conduct of former Board officials as well as current and/or former Bank staff” and a board investigation conducted by the law firm Wilmer Hale.

The Wilmer Hale report cited “direct and indirect pressure” from senior staff in the office of then-World Bank President Jim Yong Kim to change the report’s methodology to boost China’s score, and said it likely occurred at his direction.

It also said that Georgieva, now the managing director of the International Monetary Fund, and a key adviser pressured staff to “make specific changes to China’s data points” and boost its ranking at a time when the bank was seeking China’s support for a big capital increase.

China’s ranking in the “Doing Business 2018” report published in October 2017, rose seven places to 78th after the data methodology changes were made, compared with the initial draft report.

The Doing Business report assesses regulatory environments, ease of business startups, infrastructure and other business climate measures.

“I disagree fundamentally with the findings and interpretations of the investigation of data irregularities as it relates to my role in the World Bank’s Doing Business report of 2018,” Georgieva said in a statement issued by the IMF. She added that she had met with the IMF’s executive board to discuss the matter.

The WilmerHale report also cited irregularities in the data used to determine rankings for Saudi Arabia and Azerbaijan in the “Doing Business 2020” report published in 2019, but found no evidence that any members of the bank’s Office of the President or executive board were involved in these changes.

“Going forward, we will be working on a new approach to assessing the business and investment climate,” the World Bank said in a statement.



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