The future of the Bulgarian Kristalina Georgieva as managing director of the International Monetary Fund (IMF) fell like a stone on the autumn meeting of the institution, the most important event of the year, marked in this call by a recovery in question because of inflation, shortages due to bottlenecks in the supply chain or the doubts that the delta variant of the coronavirus casts on economies such as the United States, in addition to unequal access to vaccines. Alleged irregularities allegedly instigated by Georgieva to favor China while working at the World Bank had driven a wedge between two seemingly irreconcilable blocs: those calling for his resignation, led by the US, and Europeans, in favor of his continuing. After two weeks of marathon research and eight interviews, the institution has closed the crisis with a statement “of full support” to the leader. “The information presented in the course of this investigation does not yield conclusive results that the managing director had an inappropriate role,” reads the statement made public by the institution on Monday night.
US Treasury Secretary Janet Yellen, for her part, considered that the accusations made against Georgieva “raise legitimate questions and concerns”, but that the lack of conclusive evidence does not advise a change of leadership at the head of the IMF. Yellen warns that “proactive steps must be taken to strengthen the integrity and credibility of the data at the IMF,” and that Georgieva and the other Fund managers must reaffirm their commitment to transparency in research, analysis, and reporting. policies adopted by the institution, reports Reuters.
The division between the two shores of the Atlantic seemed insurmountable early this Monday, despite the creation of cooperation forums such as the one established two weeks ago in Pittsburgh, also aimed at overcoming the disagreement caused by the US tripartite security alliance. , the United Kingdom and Australia against the hegemonic ambition of Beijing (and against the interests of France and, by extension, the EU). China, again and for the umpteenth time, appeared as the stone guest in a new global discussion. The United States and Japan on the one hand -the largest shareholders of the Fund-, and France, Germany, Italy and the United Kingdom, aligned with Russia and China, were facing according to the newspaper Financial times since last month a makeup of data was known to improve the results of the Asian giant in the report Doing Business 2018 and 2020.
After two weeks of investigations and meetings, the body said on Sunday that it expected to complete its report on Georgieva’s conduct “very soon”, but the deep division among the 24 members of the board seemed to delay the consensus. The verdict, therefore, coincides with the annual meeting of the IMF and the World Bank (WB), which takes place this week in Washington in a mostly virtual format. The Fund will publish its report on Tuesday Global Economic Outlook, with a slight downward revision of the growth outlook for 2021, which the IMF estimated at 6% in July.
It is still paradoxical that the soap opera Georgieva coincides with a reissue of the movement of non-aligned countries, that antiquity of the Cold War – a third anti-blockade path, a precursor of north-south dialogue – when the configuration of the world in two poles facing the ghost of China is reinforced with this cockfight global, where influences and pressures go hand in hand. The bonfire at Kristalieva’s feet was lit last month, when the WB decided to indefinitely cancel its popular Doing Business report because an external review had concluded that several senior officials at the institution pressured technicians to benefit China in the rankings 2018 and 2020. The publication of the document seemed, at first, a boring internal matter: inaccuracies in the data, the result of technical errors. But after the compilation errors appeared the figures of the then president, Jim Yong Kim, and the CEO of the entity, Georgieva, who allegedly would have pressured the Bank’s staff to make “specific changes” in some indicators of China to win them positions. in the rankings, at a time when the Bank was seeking Beijing’s support to increase its capital.
The accusation brought to light a “toxic culture” within the team of Doing Business, with “fear of reprisals.” “Employees felt that they could not defy an order from the president or CEO without risking losing their jobs,” reflects the research published on September 16, according to Reuters. Bulgarian Simeon Djankov, a senior official reporting to Georgieva, was also charged with overseeing the manipulation of data and promoting threats and blackmail against staff. Georgieva strongly disagreed with the revelations.
Blocks on the sidelines, the most critical fear that the accusations against the Bulgarian economist endanger the ability of both institutions to promote reforms and boost growth; that is, their own role as interlocutors with governments. His supporters, on the contrary, underscore his support for the poorest nations during the pandemic and the reformulation of the Fund’s priorities in favor of such burning issues as climate change and gender equality.
Supporting the thesis of the confrontation between rich and poor countries – African countries have come out unanimously in his defense, for example – prestigious economists such as Jeffrey Sachs or Joseph Stiglitz have aligned themselves with Georgieva. The first wrote in the Financial times that his expulsion “would be a dangerous and costly capitulation to the anti-Beijing hysteria.” The Nobel Prize in Economics, a former World Bank chief economist, described the efforts to eliminate it as a “coup” and the report by the law firm that drew up the accusations as “an ax blow.” In a statement issued by a public relations firm hired by Georgieva, six former Bank officials present her as “a person of the highest integrity and commitment to development.” In recent months, Georgieva has highlighted the uneven global response to the pandemic and allocated emergency funds from the IMF to 100 of the world’s poorest countries to cope with the emergency.