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IMF chief caught in controversy for helping China to get higher rank in World Bank list

Kristalina_Georgieva_with_Chinese_President_Xi_Jinping_Twitter_KGeorgieva.webp

Kristalina Georgieva with Chinese President Xi Jinping Twitter KGeorgieva

World Bank leaders, including then-Chief Executive Kristalina Georgieva, applied "undue pressure" on staff to raise China's rank in the bank's "Doing Business 2018" report, according to an independent investigation report released on Thursday.

The report, prepared by a law firm WilmerHale at the request of the bank's ethics committee, raises serious concern about China's clout at the World Bank, and the role of Georgieva and then-World Bank President Jim Yong Kim.

Georgieva, a Bulgarian national, took over as IMF chief in October 2019.

The WilmerHale report mentioned "direct and indirect pressure" from senior staff in Kim's office to change the report's methodology to boost China's score, and said it likely occurred at his direction.

It said Georgieva, and a key adviser, Simeon Djankov, had 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 positions to 78th after the data methodology changes were made, compared with the initial draft report.

The "Doing Business" report ranks countries based on their regulatory and legal environments, ease of business startups, financing, infrastructure and other business climate measures.

Georgieva said she disagreed "fundamentally with the findings and interpretations" of the report and had briefed the IMF's executive board.

The World Bank Group on Thursday cancelled the entire "doing business" report, saying internal audits and the WilmerHale investigation had raised "ethical matters, including the conduct of former Board officials, as well as current and/or former Bank staff."

The U.S. Treasury Department, which manages the dominant U.S. shareholdings in the IMF and the World Bank, said it was analysing what it called "serious findings."

"Our primary responsibility is to uphold the integrity of international financial institutions," the statement said.