Friday, September 24, 2021

"The Economist" calls for the resignation of the head of the IMF

The Economist magazine makes a strong case for the resignation of Kristalina Georgieva, who is now head of the IMF, for her role in an incident when she was deputy which appears to amounted to fiddling figures the IMF publishes to benefit China and three other countries.

As they begin

"In 2003 the world bank launched a league table that assessed the ease of doing business in different countries around the world. By 2017 Li Keqiang, China’s prime minister, grumbled that his country was lagging behind its peers. At his urging, officials began freeing entrepreneurs from red tape—and crimson ink. They cut fees, streamlined approvals, and began to use electronic seals instead of the traditional ink stamp on many documents."

So far, so good - the figures gave China an incentive to make it easier to do business there. the problem occurred when the government of China was not satisfied that the latest IMF figures reflected adequately the progress they had made.

According to the magazine, a new investigation has found that IMF staff 

"improperly altered the scores of China and three other countries. They wanted to spare China an embarrassing fall in the rankings in 2017, just as its reforms were gathering steam. According to the investigation, the China tweaks were carried out at the behest of the bank’s then president, Jim Yong Kim, and his second-in-command, Kristalina Georgieva."

Ms Georgieva says she only asked researchers to triple-check the data. However,

"The investigators found that she and the team explored a change in the bank’s method (ie, including only one city per country) to engineer a better result. And, according to the bank’s own review, the tweaks that were finally implemented introduced errors rather than removing them."

The magazine points out that the IMF is the custodian of data standards for the world’s macroeconomic statistics. The head of the IMF must hold the ring while two of its biggest shareholders, America and China, confront each other in a new era of geopolitical rivalry. They point out that te IMF's critics 

"are already citing this affair as evidence that international bodies cannot stand up to China. The next time the IMF tries to referee a currency dispute, or helps reschedule the debt of a country that has borrowed from China, the fund’s critics are sure to cite this investigation to undermine the institution’s credibility."

they argue that the best way to restore that credibility is for Ms Georgieva to fall on her sword,

You can read the full article here (You may need to register.)

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