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Wednesday, February 1, 2023

World Bank Cancels Doing Business Reports After China Rigging Claims

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The results of an independent investigation, published on Thursday, said World Bank leaders including then-chief executive Georgieva applied “undue pressure” on staff to boost China’s ranking in the bank’s “Doing Business 2018” report.

At the time, the Washington-based multilateral lender was seeking China’s support for a big capital increase.

The World Bank said on Thursday it would cancel the report series, which has run since 2003, dismaying investors who rely on it to help them assess country risk.

The International Monetary Fund’s ethics committee and board need to look into the report alleging its chief Kristalina Georgieva pressured staff to boost China’s ranking in a flagship report while at the World Bank, a French finance ministry source said on Friday.

Georgieva has headed the IMF since 2019, during which it has seen its role ramped up, distributing around $650 billion in new Special Drawing Rights, its quasi-currency, as part of a drive to help combat the economic damage inflicted by COVID-19.

“It’s a serious subject. The independent report is not a judgment and the IMF’s ethics committee and board must study the report, listen to the managing director and present its conclusions,” the finance ministry source said.

“It’s on this basis that France will be able to fully evaluate the situation,” the source said in reaction to the report, which was prepared by an outside law firm at the request of the World Bank’s ethics committee.

The U.S. Treasury Department, which manages the dominant U.S. shareholdings in the IMF and the World Bank, said it was analysing what it called the report’s “serious findings”.

The report comes nearly two years after Georgieva, who is Bulgarian, took over as IMF chief, shortly before the biggest global economic crisis in the Fund’s 76-year history, prompted by the COVID-19 pandemic.

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