Sun. Oct 17th, 2021

Regulation HK

Financial Regulator

IMF Probes Kristalina Georgieva Over Data-Rigging Allegations

2 min read

IMF managing director Kristalina Georgieva has denied involvement in alleged data irregularities to improve China’s “Doing Business” ranking.

An independent report has found that IMF managing director Kristalina Georgieva and top bank officials exerted pressure on researchers to bolster China’s ranking in the World Bank’s 2018 edition of its “Doing Business” Report.

The World Bank’s Doing Business reports ranks countries based on their regulatory and legal environments, ease of business startups, financing, infrastructure and other business climate measures.

In an independent report prepared by law firm WilmerHale for the World Bank’s ethics committee, it is alleged that Georgieva (then World Bank chief executive) and Kim Jim Yong (then World Bank president) – among other officials – exerted “undue pressure” on researchers to bolster China’s ranking at a time when the World Bank sought China’s support for a large capital increase.

WilmerHale’s investigation found that Georgieva involved herself in the rankings when it became clear that China would fall several places in the Doing Business index, and ordered staff to massage the data. The WilmerHale report suggests an independent data audit be conducted.

Georgieva has denied any role involving “data irregularities” in the Doing Business reports: “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,” she said.

On the same day (16 September), the World Bank announced it would discontinue the Doing Business report, saying it has initiated a series of reviews and audits of the report and its methodology.

Meanwhile, the executive board of the IMF has met to discuss the allegations against Georgieva and agreed to conduct a thorough and objective review of the matter and meet again soon.

An editorial from the Economist, an influential magazine in policy circles, has called for Georgieva’s resignation, arguing that the incident has undermined the IMF’s credibility as custodian for the world’s macroeconomic data and intermediary between economic powers.

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