In response to claims that she was an World Bank official and pressured staffers into changing business ranks in order to placate China, the International Monetary Fund stated “full confidence” Tuesday.
In a statement, the IMF’s 24 members executive board stated that their review “didn’t conclusively show that Kristalina Georgieva played an inappropriate role.”
It said that a probe into misconduct by World Bank staff members was ongoing. The United States, IMF’s largest shareholder said that it would closely monitor any further investigation. Both the World Bank and IMF can be considered global lenders to the United Nations system.
In response to an investigation report by WilmerHale, Georgieva has denied any wrongdoing. According to the report, she was involved in influencing World Bank staff to change 2018 rankings which were intended to demonstrate how welcoming China and other countries were to businesses.
To attract foreign investment, countries used the annual Doing Business Report. This evaluated tax burdens and bureaucratic barriers.
Due to controversy, the rankings were canceled. This also led to criticisms that China, second largest economy in the world, had too much influence on international finance institutions.
Janet Yellen, U.S. Treasury Secretary, spoke to Georgieva over the phone and stated that the report “raised legitimate questions and concerns,” according to a statement by the Treasury Department.
The Treasury however, agreed that there was no basis for IMF leadership change if “there isn’t any further direct evidence regarding the role of managing director.”
Yellen stated that it was vital to protect the integrity of the IMF/World Bank.
“The U.S. The Treasury statement stated that the “U.S. believes proactive measures must be taken in order to strengthen data integrity and credibility of the IMF, as well as that the institution’s leadership must renew its commitment to transparency and whistleblower protections around policies, research and analysis to provide accountability, public oversight, and oversight over key decisions.”
Gita Gopinath (the chief economist of the IMF) addressed Wednesday’s controversy by saying that the IMF takes very seriously the need for integrity in its economic reports. She pointed out that the investigation was not focused on an IMF report but a World Bank report.
She said that the IMF is constantly striving to maintain the highest standards in data collection and research, during a briefing about the updated World Economic Outlook. “As part that, we have ongoing reviews every day and will continue to do so.”
Late Friday, the IMF stated that it needed more “clarifying information” regarding its investigation. The board then met with Georgieva again on Sunday.
After a WilmerHale presentation, Georgieva was present before the panel for over five hours. It was alleged that she and other World Bank officials pressured staff members to alter data.
Washington, DC – The annual meeting of the IMF and World Bank is being held this week. However, the Doing Business controversy was threatening overshadowing the agenda.
Since 2019, Georgieva, a 68 year-old Bulgarian economist has been the IMF’s managing director. Georgieva, a 68-year-old economist from Bulgaria, was the first fund leader to be from an emerging market economy and not one of the European economic powerhouses like Germany or France.
Christine Lagarde, who had stepped down to become head of the European Central Bank, was succeeded by her in taking over leadership of IMF.