The World Bank’s top executives, set up to fight poverty and support developing countries, have been pressured to raise China’s ranking in the 2018 Business Environment Assessment report, it has been revealed. At that time, the World Bank was headed by Kim Yong Kim, the president of the World Bank, and the current International Monetary Fund (IMF) president, Kristalina Georgieva, was the CEO. At the time, the World Bank was pushing for capital expansion, but it is possible that the executives exerted pressure on data manipulation to expand support from China, which has emerged as an economic powerhouse.
Reuters and other U.S. media reported on the 16th (local time) that the World Bank Board of Directors approved the disclosure of the Wilmer Hale law firm’s investigation report on data inconsistency in the 2018 Corporate Environmental Assessment Report to the public. The report concluded that top officials, including Georgieva, exerted pressure to raise China’s ranking. The World Bank’s Business Environment Assessment Report is prepared in a manner that evaluates and ranks the regulatory environment, business start-up convenience, and infrastructure. For this reason, each country puts a lot of effort into getting a high ranking.
The report points out that Kim’s office staff exerted direct and indirect pressure to change the evaluation method to boost China’s score. The pressure is said to have come in various forms, including e-mails, briefing requests, orders to delay the printing of reports, and requests for discussion on evaluation methods. The report pointed out that this pressure may be due to Kim’s directive.
The circumstances under which the then-CEO Georgieva applied pressure to boost China’s ranking were further confirmed. In October 2017, Georgieva convened an executive in charge of China and staff writing a business environment assessment report at the World Bank, accusing him of being “mistreating the relationship between the World Bank and China.” In response to his criticism, the business environment evaluation report analysis team found three data fields that could raise China’s ranking, and through this, China’s ranking was 78th, the same as the previous year, although it should have been 85th. The survey report noted that Azerbaijan, the United Arab Emirates (UAE) and Saudi Arabia were ranked higher through similar data manipulation.
The report predicted that the external pressure of the World Bank’s top executives to manipulate China’s rankings was related to the World Bank’s efforts to raise capital at the time. The World Bank, a multilateral development bank established in 1945, is maintained by operating capital contributed by each country, with the United States contributing the most capital, followed by Japan and China. In April 2018, the World Bank completed negotiations with the United States and China in an effort to increase capital by $13 billion.
Earlier in 2018, then World Bank chief economist Paul Romer revealed in a media interview that the Business Environment Report was vulnerable to attempts to alter data for political purposes. Romer argued that the change in the evaluation method for writing the report was unreliable, but the World Bank denied the allegations of manipulation. When the World Bank further revealed that there was a problem with data integrity in the 2020 Business Environment Assessment Report, it commissioned an external investigation into the overall report and stopped publishing the Business Environment Assessment Report.
Former President Kim has yet to comment on the report. Kim was nominated by President Barack Obama in 2012 and succeeded in re-electing as the first Asian-American president of the World Bank.
Born in Bulgaria, Georgieva was appointed as the head of the International Monetary Fund (IMF) after Kim resigned as the head of the World Bank and was appointed as the successor of Christine Riggard, who took over as the head of the European Central Bank in September 2019. Georgieva denied the use of pressure, saying in a statement that “we fundamentally disagree with the findings and interpretation of the investigation.”
The U.S. Department of the Treasury said, “We are analyzing the report as a result of a serious investigation” and “our primary responsibility is to maintain the integrity of financial institutions.”
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