LONDON (Reuters Breakingviews) – Economic weight often equates to political weight. But bowing too much to the great powers can have negative repercussions, as the World Bank finds out.
Executives at the multilateral lender, including then-chief executive Kristalina Georgieva, lobbied staff in 2017 to improve China’s ranking in a report on the ease of doing business, an independent survey released Thursday shows. . Georgieva, now the head of the International Monetary Fund, said she fundamentally disagrees with the report’s findings and interpretation. Nonetheless, the details make reading uncomfortable. World Bank officials seemed more concerned with China’s satisfaction than the integrity of a widely followed report that offers companies a guide to how countries score on issues such as ease of paying taxes or paying taxes. flexible hiring.
This approach could be called a realpolitik which alleviates the pro-American biases inherent in an institution that, like the IMF, was set up to aid reconstruction efforts after WWII. But that would underestimate how damaging such tactics could be for organizations whose funding capacities are needed to tackle huge challenges, primarily climate change, and how to help poorer countries emerge from the pandemic.
The World Bank, now headed by David Malpass, is the largest provider of climate finance to developing countries, which can least afford to pay the costs of decarbonization. And last month, the IMF distributed around $ 650 billion in new Special Drawing Rights, its quasi-currency, as part of a campaign to tackle the economic damage inflicted by Covid-19. The debate over the Ease of Doing Business report distracts from such a good job and gives ammunition to critics of both organizations, especially the United States, which is the largest shareholder of the World Bank.
It is true that having countries as shareholders sets up a particular dynamic which requires the reconciliation of conflicting national interests and priorities. But there are anachronisms that could be dropped to reduce prejudices against large countries. First and foremost is the tradition of appointing an American to head the bank. It would be a good start to improving shareholder engagement in an institution whose work has the potential to help move towards a fairer and greener planet.
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– World Bank executives, including then-chief executive Kristalina Georgieva, put “undue pressure” on staff to improve China’s ranking in the bank’s “Doing Business 2018” report, according to an independent inquiry published on September 16. The report was prepared by law firm WilmerHale at the request of the bank’s ethics committee.
– Georgieva, who is now managing director of the International Monetary Fund, said she disagreed “fundamentally with the findings and interpretations” of the report and briefed the IMF board on the matter.
– The World Bank Group quashed the entire ‘Doing Business’ report on the business climate, saying internal audits and the WilmerHale investigation had raised’ ethical questions, including the conduct of former officials of the Board of Directors, as well as current and / or former staff of the Bank ”.
(Edited by Rob Cox and Oliver Taslic)
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