This is not the first scandal around the report
The World Bank no longer publishes Doing Business, which analyzes the business environment in many countries around the world, making it an accepted measure of competition. In its statement, the organization writes that the reason for the decision was a discrepancy encountered in the compilation of the rankings.
But what happened in the end? The first scandal about Doing Business is not the first, in January 2018, the world’s chief economist Paul Romer has already spoken openly in an interview that the report’s methodology should be renegotiated in order to significantly affect Chile’s ranking. has been designed. For this reason, the previous ranking was also changed. It is suspected that under socialist governments, the country’s ratings have traditionally deteriorated, while under centre-right governments it has improved, meaning there may be political motivation behind it. The director responsible for compiling the report was Augusto-López Claros for years, and the Bolivian-born expert, of course, defended the rankings, but also apologized to Chile. Romer also resigned after the announcement.
That scam was later smoothed out by revising the Doing Business rankings and defending the methodology. However, the Competitiveness Report doesn’t seem to be spared from another — even more serious — scam.
The US Wilmerhall report is now prepared, clearly stating when the 2018 report was prepared
There was strong pressure from the World Bank’s leadership on manufacturers to improve China’s ranking.
“In the future, we aim to analyze the business environment in countries around the world with a new approach,” the organization said in a statement announcing the end of Doing Business.
Was it possible for money to buy everything?
The current scandal is more serious than it was in 2018, because, in fact, the top management of the World Bank has been bribed on suspicion of favorably changing China’s ranking methodology.
In the Doing Business Ranking published in October 2017, China is ranked 78th in terms of business environment, an improvement of seven places. The report also became suspicious because
This was at a time when the World Bank significantly increased its capital thanks to contributions from China.
That is, the current investigation does not explicitly state either, but there is a strong suspicion that the Asian country has primarily asked “favours” to the organization’s leadership in exchange for money to advance in the rankings.
The just-released study from WilmerHele isn’t just about the disparities found in the 2018 rankings. In a report released in 2019, he found unusually large changes in the rankings of Saudi Arabia and Azerbaijan, but could not prove that any leaders of the organization had influenced them.
However, after two years of proven practice, it is certainly doubtful that similar “favours” would have been made at other times.
Saudi Arabia has improved from 30th to 62nd in the 2020 rankings, which may already be questionable.
Can the head of the IMF also fall into this?
One particular note to this scandal that recently surfaced was Kristalina Georgieva, the CEO of the World Bank in 2017, who now holds a similar position at the International Monetary Fund (IMF). In addition, the Wilmerhall study
He also mentions by name those who pressured the organization’s president to lobby for China.
On Friday morning, the head of the IMF issued a statement in which he stressed that he does not agree with the findings of the investigation and their presentation. He said that he has already discussed the matter with the IMF board.
By the way, Georgieva said in her Wilmerhalle study that at the time of writing the 2018 report, “multilateralism was in danger and the World Bank would be in serious trouble” if it had failed to raise the capital employed. The organization announced in 2018 that it would increase its capital with a contribution of $13 billion, bringing China’s stake from 4.68% to 6.01%.
US The Treasury Department has yet to respond adequately to the findings of the investigation, saying only that they are analyzing “serious findings.” His role is interesting because the U.S. It is also the largest shareholder in the World Bank and the IMF, and is represented by the ministry in the two organizations.
According to the investigation material, Georgieva personally brought the final version of the publication from one of the managers responsible for Doing Business publication and then specifically thanked him for “helping to solve the problem”. Incidentally, according to the just completed report, a toxic culture and fear characterized the compilation of the Competitiveness Report, in which ranking workers felt unable to cope with pressure coming from above without compromising their jobs. We do.
Cover Image: Clemens Bilan – Poole / Getty Images