International Monetary Fund boss Kristalina Georgieva falls victim to conspiracy to oust her, says Nobel Prize-winning economist after report alleged she exerted “undue pressure” on staff to strengthen China’s position in the world rankings while its previous job at the World Bank.
Joseph Stiglitz, former chief economist at the World Bank, said a report prepared by law firm WilmerHale on concerns about China’s influence on the Washington-based organization was unfairly used to “discredit and oust ”Georgieva.
Stiglitz said he believed the IMF managing director, who denied the allegations, was the target of conservative forces after she went further than her predecessors to financially support developing countries and “positioned the Fund for it to assume a global leadership role in the response to climate change “.
He said: “After reading the WilmerHale report, talking directly to the key people involved and knowing the whole process, the investigation seems like a chop job to me.”
It is understood that IMF officials plan to question Georgieva and law firm investigators separately about the World Bank report on Monday.
Writing in the online journal Project Syndicate, Stiglitz added, “Throughout Georgieva acted in a completely professional manner, doing exactly what I would have done (and sometimes had to do when I was Chief Economist) : urge those who worked for me to be sure their numbers were correct, or as precise as possible, given the limitations inherent in the data. “
At the center of the controversy is the World Bank’s annual Doing Business report, which ranks countries based on how easy it is to start and run a business.
It is alleged that Georgieva, who was managing director of the World Bank before taking office at the IMF in 2019, and Simeon Djankov, a key adviser, lobbied staff to “make specific changes to the data points of the IMF. China ”and improve its ranking at a time when the bank was seeking additional funds from China.
The report concluded that the “direct and indirect” pressure was likely to have been exerted under the leadership of former World Bank President Jim Yong Kim.
On Thursday, the World Bank quashed the entire Doing Business report, saying internal audits and WilmerHale’s investigation had raised “ethical issues, including the conduct of former board officials, as well. only current and / or former staff of the Bank ”.
The US Treasury, which is the IMF and the World Bank’s largest funder, said it was analyzing what it called “serious findings.” The UK has said it supports transparency in this area.
Shanta Devarajan, Head of the Unit overseeing Doing Business, who reported directly to Georgieva in 2018, insists he was never forced to change the data or the results, according to a Reuters report.
Devarajan said bank staff did exactly what Georgieva asked and rechecked the numbers, making minor changes that led to a slight upward revision. WilmerHale, Kim and Djankov did not respond to a request for comment, Reuters said. A World Bank spokesperson said: “The report speaks for itself.
The report was commissioned by the World Bank’s ethics committee. The bank is currently headed by David Malpass, who was appointed to succeed Jim Yong Kim as president of the bank by former US President Donald Trump.
Stiglitz said there were long-standing institutional rivalries between the IMF and the World Bank, reinforced by IMF plans to scale up lending to developing countries, which has traditionally been the role of the bank.
“We can add to this mixture the isolationist aspect of American politics – embodied by Malpass, a person appointed by Trump – combined with a desire to undermine President Joe Biden by creating one more problem for an administration confronted with so many others.” challenges. And then there are the normal personality conflicts.
“But political intrigue and bureaucratic rivalry are the last things the world needs at a time when the pandemic and its economic fallout has left many countries facing debt crises. Now more than ever, the world needs Georgieva’s firm hand at the IMF, ”he said.