Investigation: World Bank leaders ‘pressure staff’ to boost China, Saudi Arabia’s rating

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ATLANTA (CNN Business) — The World Bank said it would stop publishing its annual Doing Business economic report after an independent investigation found that bank leaders put “undue pressure” on employees to change data to inflate the ratings of China and Saudi Arabia in the 2018 and 2020 report. .

The bank commissioned law firm Wilmer Hall to conduct the investigation.

Investigators found that then-CEO Kristalina Georgieva lobbied the Doing Business team in 2017 to “change the report’s methodology” or “make specific changes” to data points to boost China’s ranking in the 2018 report.

It came after Chinese government officials repeatedly expressed concerns to it and then-World Bank President Jim Yong Kim about the country’s ranking, according to the 16-page investigation published by the law firm.

At the time, Georgieva was in the middle of negotiations over a capital increase campaign in which China was expected to play a major role, the investigation found.

Georgieva was “directly involved” in improving China’s ranking, according to the independent investigation, which said that during one meeting, the then chief executive “blamed the then-manager of the World Bank for mismanaging the bank’s relationship with China and failing to appreciate the importance of the business climate report to the country”.

The Doing Business team leaders eventually raised China’s ranking in the survey by seven places to 78 by identifying data points they could tweak, including giving the country “more credit” to China’s Secure Transactions Act, according to Wilmer Hall’s report.

In October 2017, the investigation found that Kim’s aides also directed the survey team to simulate how China’s bottom line would change if data from Taiwan and Hong Kong were combined into the country’s current data.

Wilmer Hall’s investigation stated that leaders of the Doing Business team “believe the concern is coming directly from Chairman Kim.”

Georgieva, who is now managing director of the International Monetary Fund, said in a statement that she “fundamentally disagrees with the findings and interpretations of the investigation of data breaches as they relate to my role in the World Bank’s Doing Business 2018” and that she had briefed the Executive Board the International Monetary Fund on this matter.

Kim has yet to respond to an email to CNN seeking comment.

The Executive Board of the International Monetary Fund has asked the Ethics Committee to review the Wilmer Hull investigation, according to a source familiar with the matter. The Ethics Committee will then communicate its assessment to the Board of Directors.

“The World Bank recently issued a statement on suspending the Doing Business report. The Chinese government attaches great importance to Doing Business efforts to improve the business environment, which is clear to all. We hope the Bank will take International Facts as a basis, rules as a standard, following the principles of professional, objective, fair and transparent, to conduct a thorough investigation of the relevant issues.”

The Wilmer Hull investigation also found irregularities with Saudi Arabia’s data in the 2020 Business Report.

Saudi government officials expressed “dissatisfaction” with their country’s classification in the 2019 edition of the report, especially with the survey team failing to identify what officials considered “the country’s successful reforms,” according to the investigation.

As a result, senior bank leaders, including one of the founders of Doing Business, Semyon Djankov, instructed the survey team to “find a way to change the data” so that Jordan does not rank first on the so-called “best improvers list.”

The team eventually added points in multiple categories to Saudi Arabia so that the country replaces Jordan in the lead, according to the investigation findings.

Djankov said the request to change Saudi Arabia’s data came from two senior World Bank officials, one of whom was formerly President Kim’s chief of staff and was involved in changes to China’s data in the 2018 edition of the business report, according to the investigation.

In a statement issued last Thursday, the World Bank said it would discontinue Doing Business, and that “the World Bank Group remains firmly committed to strengthening the role of the private sector in development and providing support to governments to design the regulatory environment that supports this. From now on, we will work on A new approach to assessing the business and investment climate.

CNN has reached out to the Embassy of the Kingdom of Saudi Arabia in Washington, D.C., and the Saudi Ministry of Foreign Affairs for comment and is awaiting a response.

CNN also reached out to Semyon Djankov and the Peterson Institute for International Economics, where he serves as a senior fellow for comment.





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