Kristalina Georgieva’s leadership at the head of the International Monetary Fund (IMF) is more in doubt than ever. The Fund’s executive committee, the management body that runs its day-to-day business, will open a round of interviews this week with Georgieva herself and with the WilmerHale law firm, which was commissioned by the World Bank to audit irregularities and pressures in the elaboration of one of its most iconic reports when the Bulgarian economist was in charge of the organization. The objective of these interrogations will be to gather their versions of a case that has undermined the credibility of its managing director and that now threatens to damage the reputation of the IMF itself.
“A period of consultations with the parties has begun to decide whether it can erode their command capacity,” says a source from the organization consulted by EL PAÍS. Late at night in Spanish time (early American afternoon), the IMF confirmed the information in a statement and promised to carry out “a thorough, objective and timely review” of the case.
The interrogations, advanced by the Reuters agency, will focus on gathering more information about the WilmerHale audit, broadening the focus on the possible links between the alleged favorable treatment of China in the ranking Doing Business and the World Bank’s $ 13 billion capital increase process in 2018, in which the Beijing contest was crucial. The Asian giant was one of the main beneficiaries of the alleged “direct and indirect” pressure on employees by senior officials of the agency – among them, presumably, also from Georgieva herself – to improve the country’s score in a classification that it was not favorable to him.
The current managing director of the Fund, where she landed in the spring of 2019, has emphatically denied the accusations, which she has described as “false and spurious” and of which she became aware very little before the results of the audit were in the public domain. .
The case enters a new phase
When the investigation came to light in mid-September, the World Bank chose to cancel the Doing Business, a report that has been mired in controversy several times since its inception almost two decades ago. It did so alleging “ethical issues, including the conduct of the former board of directors as well as current and / or former Bank personnel”, which was evidenced by the investigation carried out by the US firm. The most relevant name of them was, by far, that of Kristalina Georgieva.
Since then, the case has grown steadily, albeit more so at the IMF than at the World Bank. The prestigious British weekly The Economist, one of the most influential publications in financial circles, has asked in a forceful editorial Georgieva’s resignation on the grounds that, although she “deserves” her “sympathy” and has been an “estimable servant in various international institutions”, “this episode it does not fit well with his current role at the IMF ”.
However, not everything has been critical. In recent days, the head of the Fund has received two weighty supports from the academic world: that of the Nobel and former World Bank chief economist Joseph Stiglitz, and that of the special adviser to the UN Secretary General Jeffrey Sachs. In a text published last week in Project Syndicate and eloquent from the headline (An attempted coup at the IMF), the first observes “maneuvers” to “replace or at least substantially weaken” the Bulgarian economist. “He acted in an entirely professional manner, doing exactly what I would have done,” noted the former, explicitly putting his hand on fire for her.
Sachs, for her part, opted for a rostrum in another of the financial bibles, the Financial Times, to deny that the “heated attack” against the IMF managing director had to do with the caso Doing Business or with his management at the head of the Fund, but rather with the escalation of tension for years between the two largest powers on the globe: the United States and China. “Many in the US Congress want Georgieva out because she is not a sworn enemy of Beijing,” he declared. On Tuesday, just 24 hours after the Sachs rostrum saw the light, top Republican and Democratic officials on the US Senate Foreign Relations committee urged President Joe Biden to “ensure full accountability” around the scandal. .
Countries wait to position themselves
The main member states of the IMF, that is to say the United States, China and the Europeans, fundamentally, have avoided any public position of support or criticism of Georgieva’s management. However, some gestures say much more than any statement: since the case broke out, US Treasury Secretary Janet Yellen has avoided responding to calls from the agency’s managing director, as reported by Bloomberg. “In the end, the result will depend largely on what the United States decides, which has not yet made its position public. [sobre la continuidad de Georgieva]”, Explains an official of the Fund. It seems that Europe, until now a great supporter of Georgieva, is putting itself in profile. And of course China is resisting their departure.
In recent times, the IMF leadership has become one of the hottest global positions. Rodrigo Rato’s career (2004-2007) went into a tailspin after his abrupt exit from the Fund, when charges around him began to emerge. His successor, Frenchman Dominique Strauss-Kahn (2007-2011), resigned after being arrested in a case of sexual assault on a hotel employee where he was staying. Also French Christine Lagarde (2011-2019) was charged with “negligence” in a corruption case while she was at the top of the body’s power scale, although she was successful: today she is the president of the ECB, one of the charges most relevant aspects of European economic policy. The future of who took his witness in Washington depends on what happens in the next few days.