World Bank stopping publishing of Doing Business rankings has led to fair bit of controversy. WB’s investigation report which found that the rankings were politically compromised led to WB stopping these rankings. The report has named Kristalina Georgieva then WB CEO and current IMF chief as one of the people who led to compromise of the rankings.
Georgieva immediately released a statement denying the charges:
“I disagree fundamentally with the findings and interpretations of the Investigation of Data Irregularities as it relates to my role in the World Bank’s Doing Business report of 2018. I have already had an initial briefing with the IMF’s Executive Board on this matter.”
Prof Joseph Stiglitz in this Proj Syndicate piece says that this is an attempt to remove Georgieva. He says that IMF’s recent policy stance where the idea is to be softer on loans towards countries is behind this coup plot:
If the WilmerHale report is best characterized as a hatchet job, what’s the motive? There are, not surprisingly, some who are unhappy at the direction the IMF has taken under Georgieva’s leadership. Some think it should stick to its knitting and not concern itself with climate change. Some dislike the progressive shift, with less emphasis on austerity, more on poverty and development, and greater awareness of the limits of markets.
Many financial market players are unhappy that the IMF seems not to be acting as forcefully as a credit collector – a central part of my critique of the Fund in my book Globalization and Its Discontents. In the Argentine debt restructuring that began in 2020, the Fund showed clearly the limits on what the country could pay, that is, how much debt was sustainable. Because many private creditors wanted the country to pay more than was sustainable, this simple act changed the bargaining framework.
Then, too, there are longstanding institutional rivalries between the IMF and the World Bank, heightened now by the debate about who should manage a proposed new fund for “recycling” the newly issued SDRs from the advanced economies to poorer countries.
One can add to this mix the isolationist strand of American politics – embodied by Malpass, a Trump appointee – combined with a desire to undermine President Joe Biden by creating one more problem for an administration facing so many other challenges. And then there are the normal personality conflicts.
But political intrigue and bureaucratic rivalry are the last things the world needs at a time when the pandemic and its economic fallout have left many countries facing debt crises. Now more than ever, the world needs Georgieva’s steady hand at the IMF.
The problems are obviously deeper. Ever since these two Bretton Woods institutions were created, US and Europe have dominated them. They have also divided the two amidst each other. US typically uses World Bank as its own arm and Europe does the same with IMF. There is also a revolving door between both the institutions as we see in Georgieva’s appointment. She was favored by both the US/Europe camps earlier and as a result was both CEO of World Bank and head of IMF. Now, she seems to have run out of favour.
In all this discussion, there is no mention of other countries. High time these institutions represent world as a whole. Else these problems will not just continue but will have even worse consequences.
Mostly Economics 
