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IMF board clears fund's director

By ZHAO HUANXIN in Washington | China Daily Global | Updated: 2021-10-14 11:07
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International Monetary Fund chief Kristalina Georgieva [Photo/Agencies]

International Monetary Fund chief Kristalina Georgieva said on Wednesday that she was ready to "concentrate on the work at hand" after the IMF Executive Board cleared her of accusations that she pressured World Bank staff to boost the rankings of China and other countries in her previous job.

The executive board, after eight meetings on the matter raised by law firm WilmerHale's investigation of the World Bank's Doing Business 2018 report, said the information presented in the course of its review did not conclusively demonstrate that Georgieva, the IMF managing director, played an improper role regarding the report when she was the bank's chief executive officer.

"Having looked at all the evidence presented, the Executive Board reaffirms its full confidence in the Managing Director's leadership and ability to continue to effectively carry out her duties," the board said in a statement Monday.

"The Board trusts in the Managing Director's commitment to maintaining the highest standards of governance and integrity in the IMF," it added.

Georgieva, who became head of the World Bank's sister agency the IMF in 2019, expressed her appreciation for the board's "comprehensive and impartial" review of all the evidence surrounding the "problematic" World Bank report and for giving her an opportunity to answer all its questions.

"The board concluded that it has full confidence in my ability to lead the fund, and it feels great to concentrate on the work at hand, so let's go straight to it," she said at a news conference on Wednesday to preview the agenda for the annual meetings of the IMF and World Bank this week in Washington.

Georgieva had come under pressure for the 2018 Doing Business index, in which China was ranked 78th, the same position as the previous year, wrote Joseph Stiglitz, the Nobel Prize-winning economist, in "A Coup Attempt at the IMF", an opinion piece for Project Syndicate on Sept 27.

But there was insinuation that it should have been lower and was left as part of a deal to secure Chinese support for the capital increase that the bank was then seeking, the article continued.

"Having read the WilmerHale report, having talked directly to key people involved, and knowing the whole process, the investigation appears to me to be a hatchet job," noted Stiglitz, a former senior vice-president and chief economist of the World Bank from 1997 to 2000,

Stiglitz wrote that China was the most enthusiastic backer of the capital increase; it was the United States under president Donald Trump that was dragging its feet. If the objective had been to ensure the capital increase, the best way of doing so would have been to lower China's ranking, he said.

Stiglitz continued to defend Georgieva's actions during her tenure at the World Bank, saying Wednesday that the IMF chief "stood up for data integrity" and would "absolutely" not have much baggage now to do her job in the remaining years of her tenure.

"What she said is we're not going to monkey with the methodology; she instructed her staff to make sure the data is right, do exactly what I would have done if I were in a position," Stiglitz said in an interview with Bloomberg TV.

Another US economist, Jeffrey Sachs, had argued that politics was behind the action against Georgieva.

"The heated attack against Georgieva is not really about the alleged sanctity of World Bank data or about the quality of her management. It is about the role of China in a Washington-based multilateral institution," Sachs, director of the Center for Sustainable Development at Columbia University, wrote in the Financial Times.

"Georgieva is receiving McCarthyite treatment of the kind for which Washington has been notorious in the past," Sachs wrote in an opinion piece titled "Anti-China hysteria lies at heart of action against IMF's Georgieva" on Sept 27.

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