Kristalina Georgieva, President of the International Monetary Fund.
Samuel Kunlun | Getty Images
Kristalina Georgieva, president of the International Monetary Fund (IMF), is under pressure because she is accused of telling World Bank staff to modify the ranking to benefit China.
Georgieva denied these claims.But the scandal is casting a shadow over the annual meeting of the International Monetary Fund and World Bank in Washington this week.
CNBC pays attention to these claims and the measures the IMF is taking.
Where did the allegations come from?
Georgieva has served as the CEO of the World Bank since 2017 and joined the International Monetary Fund at the end of 2019.
A report prepared by the law firm WilmerHale and published in September at the request of the World Bank’s Ethics Committee stated that during her tenure at the World Bank, “Georgieva directly participated in efforts to improve China’s rankings. [in the Doing Business Report].”
The “Business Environment” ranking is the flagship project of the World Bank’s annual research and is used to evaluate the friendliness of a country’s business operations.
In the 2018 report, China initially ranked 85th, but after being influenced by the leadership team and intervention from Beijing; the country ended up in 78th place.day Location-According to WilmerHale’s assessment, the same level as the previous year.
In a statement on September 16, Georgieva said: “I fundamentally disagree with the findings and explanations of the investigation. [of the WilmerHale report].”
Since then, the IMF’s Executive Board has held various meetings to evaluate these allegations and their implications for the organization. After a meeting on Sunday, an IMF spokesperson said: “The board of directors has made further significant progress in the evaluation today, with a view to ending its deliberations on this matter soon.”
The members are expected to meet again on Monday to discuss the next steps.
According to reports, countries such as France, Germany, Italy, and the United Kingdom are still supporting Georgieva to lead the agency. However, some officials in the United States are somewhat skeptical.
All in all, there are widespread doubts about the IMF’s future reputation.
What are people’s comments on this?
“Because the International Monetary Fund is working-intellectually and culturally-to get rid of the so-called’Washington Consensus’ fiscal austerity, since its name was changed to’austerity’ and deregulation, its general manager Christalina Ge Olkieva is fighting serious allegations,” UniCredit Group Chief Economist Eric Nielsen said in a report on Sunday.
“During the investigation, someone claimed last week that after the intervention of the Brazilian government, she recently relied on IMF staff to ease their criticism of Brazil’s environmental policies. Not surprisingly, the once impressive Brazilian culture is not surprising. The IMF is in a fragmented state as an institution,” he added.
The International Monetary Fund said after an article published by Bloomberg that the decision to change the language of the report was part of the normal process. According to a Bloomberg report, a spokesperson also said, “The International Monetary Fund believes that climate change is a key global economic issue, and it clearly stated this in Brazil in the staff report.”
Timothy Ash, senior sovereign strategist for emerging markets at Bluebay Asset Management, called this issue a “crisis of basic confidence in the IMF.”
“The damage has been done. People are now questioning all the work done by the International Monetary Fund, not just a certain link with the World Bank’s Doing Business report,” he said in a recent research report.