IMF board clears its managing director of data rigging allegations during her tenure at World Bank

The International Monetary Fund’s executive board on Monday cleared its Managing Director Kristalina Georgieva of allegations of data manipulation during her tenure as the chief executive officer of the World Bank.

The World Bank had launched an investigation after “irregularities” in data for its Ease of Doing Business Report for 2018 and 2020 were flagged internally.

Georgieva, who served as the chief executive of the World Bank between January 2017 and September 2019, was alleged of putting pressure on the economic body’s staff to boost China’s ranking in the reports for 2018 and 2020.

The World Bank had discontinued the Ease of Doing Business Report in September last year.

On Monday, the IMF executive board cleared Georgieva of the allegations after conducting a review of World Bank’s investigation in the matter.

“The information presented in the course of its review did not conclusively demonstrate that the Managing Director played an improper role,” the IMF executive board said in a statement. The board said it had conducted eight review meetings on the allegations.

The board also asserted that it was confident of Georgieva’s “commitment to maintaining the highest standards of governance and integrity in the IMF” and that they “trusted Georgieva to carry out her duties effectively”.

The board’s decision was made after a phone call between Treasury Secretary of IMF Janet Yellen and Georgieva, according to The Wall Street Journal.

Yellen told Georgieva that the investigation had “raised legitimate issues and concerns” and that going forward “proactive steps must be taken to reinforce data integrity and credibility at the IMF”. Yellen added she would examine the IMF’s additional facts and findings in the case.

Georgieva had garnered support from France last week for her continuation as the managing director of the IMF, Reuters reported. However, the United States and Japan had called for a thorough review of the allegations against her.

After being cleared of the allegations, Georgieva said that the investigation period was difficult for her.

“However, I want to express my unyielding support for the independence and integrity of institutions such as the World Bank and IMF,” she said. “… And my respect for all those committed to protecting the values on which these organisations are founded.”

The case so far

On September 16 last year, the World Bank had said that after holding several conversations with the body’s upper management, the staff preparing the 2018 Ease of Doing Business Report had allegedly changed some of the input data that led to an increase in China’s ranking.

Without the manipulation in data, China would have reportedly ranked lower than 78 in the report.

In the now discontinued Ease of Doing Business report, economies of countries were ranked according to the ease with which business can be conducted in them.

The scale ranges from 1 to 190.

The rankings on the Ease of Doing Business Report help in assessing the “absolute level of regulatory performance over time”, according to the World Bank.

A high ranking in the Ease of Doing Business report meant that the regulatory environment of an economy would be more conducive to the operations of a local company.

In recent years, the Indian government and Prime Minister Narendra Modi have placed much emphasis on findings of the Ease of Doing Business, and have taken credit for India’s improvement on the ranking.