IMF Director Kristalina Georgieva denies inflating Chinese data
WASHINGTON – In a statement to staff on Friday, Kristalina Georgieva, managing director of the International Monetary Fund, denied allegations she pressured staff to manipulate a report to appease China while it was a top World Bank official and said she cares deeply about the integrity of data and analytics, according to people familiar with the meeting.
“I don’t agree with the implications for my role, and let me tell you very simply: not true,” she said, according to a transcript of her words.
The day before, an internal World Bank investigation concluded that Georgieva was part of a group of senior World Bank officials who lobbied the team that conducts the annual Doing Business survey to inflate the position of the Bank. China in its 2018 report. The findings raised questions about Ms. Georgieva, who was then the managing director of the World Bank, and led to a review by the IMF’s ethics committee.
Friday’s meeting, which was largely held virtually, was previously scheduled to prepare staff for its annual meeting held jointly with the World Bank.
Ms Georgieva addressed the controversy at the start of the meeting, reiterating her public statement that she “fundamentally disagrees” with the characterizations in the report and insisting that the investigation would not be a distraction. She did not dispute the details of the allegations, but said asking staff to recheck something was not the same as forcing them to change the data, methodology or a result.
“Neither in this case, nor before nor after, I pressured the staff to manipulate the data. I would ask the staff to please check, recheck, double check three times, but never change, never manipulate what the data tells us, ”she said. “Why? Because I strongly believe in the value of credible data and analysis that leads to policy recommendations for the benefit of our members. For the good of the people.”
Ms Georgieva expressed regret that the investigation caused an uproar, but insisted it would not be a distraction.
“It is my responsibility that this does not interfere with the incredibly important work that we do,” she said. “So let’s focus on that work, and that’s what the discussion we’re having today is about.”
According to the World Bank’s investigation, which was conducted by law firm WilmerHale at the request of the bank’s ethics committee, officials in 2017 were concerned about negotiations with members over a capital increase and were under pressure not to anger China, which was ranked 78th. on the list of countries that year and was expected to drop in the 2018 report.
The investigation found that Georgieva was “directly involved” in efforts to improve China’s ranking. At one point, according to the report, Georgieva berated the bank’s Chinese director for mishandling the bank’s relationship with the country.
On Thursday, the World Bank announced it was ending its annual Doing Business survey. The report has been used for years by developing countries to attract foreign investment and by international investors who decide which markets to explore.
The politicization of the investigation is an indication of how China’s economic might is influencing multilateral institutions and how much effort they will put into winning favor with the Chinese government. If China withdraws from the protest, institutions such as the World Bank lose their credibility.
“China is clearly keen to control the international discourse on its economy and the political choices of its government,” said Eswar Prasad, the former Chinese director of the IMF.
Republican lawmakers, who criticized the IMF for allocating emergency currency reserves to US adversaries, called for further investigation into what happened at the World Bank.
“As the largest shareholder of the World Bank, the United States must hold account,” Senator Bill Hagerty, Republican of Tennessee, said on Twitter on Friday. “Multilateralism cannot mean simply doing whatever is necessary to get more money from Communist China.”
Representative Andy Barr of Kentucky, the top Republican on the House financial services subcommittee, which oversees international development, said the Treasury Department should examine how the IMF has helped China under Georgieva’s watch . He pointed to the $ 650 billion in foreign exchange reserves, known as Special Drawing Rights, that the fund disbursed last month, which Republicans say should not have gone to countries like China, Russia. and Iran.
“Given Ms. Georgieva’s leadership at the IMF, the Treasury should assess her actions in the run-up to the IMF’s earlier approval of an SDR allocation, her advocacy for a new trust fund involving the China and its ongoing work on the IMF governance review, which has implications for China’s influence on the fund, ”Barr said.
The Treasury Department, which serves as the liaison between the United States and the IMF and has significant voting power, expressed concern over the allegations and said it was analyzing the findings of the investigation.