Former World Bank official defends Georgieva as magazine calls for ouster from IMF

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Kristalina Georgieva, Managing Director of the International Monetary Fund (IMF), delivers remarks at an opening press conference at the 2019 Fall Annual Meetings of the IMF and the World Bank of Finance Ministers and Bank Governors , in Washington, United States, on October 17, 2019. REUTERS / Mike Theiler / File photo

WASHINGTON, Sept. 23 (Reuters) – A former World Bank official who prepared reports at the center of a data-rigging scandal that helped China defended IMF chief Kristalina Georgieva on Thursday as Economist magazine l ‘called for resigning because of his alleged role in the controversy.

Shanta Devarajan, who helped oversee the World Bank’s Doing Business report in 2017, said a external investigation report alleging that Georgieva, while she was CEO of the World Bank, exerted “undue pressure” on staff to raise China’s ratings was “beyond credulity.”

Devarajan, now a professor of development policy at Georgetown University, said in a series of tweets that he never felt pressure to change China’s scores and said WilmerHale’s lawyers only used half of his statements in an hour-long interview.

“Georgieva’s direction was to verify China’s numbers, making sure China was recognized for the reforms it had undertaken, without compromising the integrity of Doing Business. Bank lawyers overlooked the latter. sentence, “he said, adding Georgieva’s previous role as CEO of the World Bank” is wrong. “

Some of the changes corrected coding errors “or calls for judgment on matters where judgment was required,” said Devarajan, who was senior director of the World Bank’s Development Economics group until 2019.

OUTSIDE CALL

His tweets came after a scathing editorial of The Economist, an influential magazine in political circles, saying Georgieva should step down because the incident undermined the IMF’s credibility as a custodian of global macroeconomic data and an intermediary between economic powers.

“The IMF chief must hold on as two of its biggest shareholders, America and China, clash in a new era of geopolitical rivalry,” The Economist said, adding that critics of multilateralism are already citing the findings as proof that international bodies cannot stand up to China.

“The next time the IMF attempts to mediate a currency dispute or help reschedule the debt of a country that has borrowed from China, critics of the fund will certainly cite this investigation to undermine the institution’s credibility. ‘that is why Mrs Georgieva, an esteemed servant of several international institutions, should resign, ”the editorial said.

The now-canceled World Bank Doing Business reports ranked countries on the basis of their regulatory and legal environment, ease of starting a business, financing, infrastructure and other business climate metrics .

Georgieva, a Bulgarian who is a former World Bank economist and European Commission official, denied the accusations in the WilmerHale report, saying last week that they are “not true” and that she did not never pressured staff to manipulate data.

Georgieva personally hired a public relations firm, SKDK, to push back the allegations.

Joseph Stiglitz, a former chief economist at the World Bank, also called the WilmerHale report “ax work” and said that Doing Business staff also told him they did not feel any pressure from him. of Georgieva in 2017.

“The fingerprints are not there. The report does not accurately reflect what happened,” said Stiglitz, who also asked why he did not mention current President David Malpass when irregularities in the data involving Saudi Arabia’s scoring occurred under his leadership.

The report found “no evidence to suggest that the president’s office or board members” were involved in any changes that boosted Saudi Arabia’s ratings.

The IMF’s executive board is conducting its own review of the allegations.

An IMF spokesperson declined to comment on The Economist’s editorial. A spokeswoman for the US Treasury also declined to comment beyond the Treasury’s previous statement that it was analyzing the “serious findings” in the WilmerHale report.

A World Bank spokesperson declined to comment on Devarajan’s tweets.

LEGALS SEEK ANSWERS

Republicans in the US Congress who criticized Georgieva’s work at the IMF have not called for his ouster.

Three members of the Republican House of Representatives sent a letter to U.S. Treasury Secretary Janet Yellen asking her to report on the Treasury review to Congress, including information on Georgieva’s interactions with Chinese IMF officials in the allocation decision-making process of $ 650 billion in IMF currency reserves in August, known as Special Drawing Rights. China received around $ 42 billion in new SDRs.

Reporting by David Lawder and Andrea Shalal in Washington Editing by Will Dunham and Matthew Lewis

Our standards: Thomson Reuters Trust Principles.



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