The scandal at the IMF grows over the favors of Kristalina Georgieva to the Chinese regime

International Monetary Fund (IMF) Managing Director Kristalina Georgieva speaks with Chinese Premier Li Keqiang before a press conference following the “1 + 6” roundtable meeting at the Diaoyutai State Guest House in Beijing, November 21, 2019 (Reuters)

Kristalina Georgieva never believed that a favor done to China could jeopardize your position in the International Monetary Fund (IMF). However, after the world Bank issued a lapidary report on his conduct in which he revealed the whole plot, the fate of the current head of the agency seems to have taken a 180 degree turn. The event was portrayed by the press on September 16 and generated a global scandal.

In that sudden statement, the World Bank stated: “The changes in data for China in Doing Business 2018 appear to be the product of two different types of pressure applied by the bank’s leadership in the Doing Business team.”. The body aimed against Georgieva by “press” for “make specific changes to China’s data in an effort to raise its ranking at the same time the country was expected to play a key role in the bank’s capital-raising drive”.

But in the last hours, the pressure on Giorgieva seems to have increased. According to Bloomberg, the secretary of United States Treasury I would no longer answer her calls, which shows the seriousness of the matter. “Janet Yellen has refused to return calls from troubled International Monetary Fund director Kristalina Georgieva since the scandal broke, indicating that the Biden administration’s refusal to support her goes beyond her public statements.”, Noted the journalists Saleha Mohsin and Eric Martin.

Since Georgieva was accused earlier this month of tampering with a World Bank report at her previous job there, she has made attempts to talk to Yellenbut has failed to do so, said people familiar with the matter, who spoke on condition of anonymity with Bloomberg. The Law Firm Report WilmerHale, commissioned by the world Bank, alleged that Georgieva -which took over the IMF leadership in 2019- lobbied bank staff to upgrade the business climate rating of China.

The Secretary of the Treasury of the United States, Janet Yellen during a session of the Senate.  Key Joe Biden administration official does not respond to calls from IMF Director Kristalina Georgieva after the scandal of her favors to China (Reuters)
The Secretary of the Treasury of the United States, Janet Yellen during a session of the Senate. Key Joe Biden administration official does not respond to calls from IMF Director Kristalina Georgieva after the scandal of her favors to China (Reuters)

The decision of Yellen Avoiding the questioned managing director of the IMF is a serious blow to the structure of the credit agency. Georgieva He previously had easy access to the US Treasury secretary, people familiar with the relationship said. This was thanks to the natural closeness and multilateral relationship between the IMF and the treasure. The couple spoke regularly earlier this year, according to the calendars of Yellen, While USA and the IMF they were working on initiatives such as the injection of global reserves of 650,000 million dollars foreseen by the Fund.

USA is the largest shareholder of the IMF and from world Bank, and the Treasury Department manage those relationships. The spokeswoman for treasure, Alexandra LaManna, declined to comment on the lack of contact between Yellen and Georgieva. An IMF spokesperson also declined to comment, as did a spokesperson for Georgieva.

The IMF’s credibility is clearly damaged“, said Timothy Ash, strategist BlueBay Asset Management on London and veteran emerging markets analyst. I affirm that Georgieva it should be set aside until the investigations are complete. An official of the treasure said the department has reviewed the allegations of misconduct and considers them worrying and serious. That agency is awaiting the IMF’s own assessment, the person said, speaking on condition of anonymity.

The IMF’s ethics committee is currently reviewing the findings of the report commissioned by the World Bank.

Pressure in the Senate

For its part, A pair of bipartisan senators asked Secretary Yellen to find a “full accountability”After an investigation found that lThe managing director of the International Monetary Fund (IMF), Kristalina Georgieva, improperly influenced a report in favor of China in her previous position at the World Bank.

The WilmerHale law firm investigation found that Georgieva, while she was the World Bank’s top official, lobbied to boost China’s position in the 2018 edition of the Doing Business report. Georgieva has said she “fundamentally” disagrees with the findings.

“Given how critical it is that these data be and are considered irreproachable, These allegations are deeply disturbing, ”said Senate Foreign Relations Committee Chairman Bob Menéndez., a Democrat from New Jersey and senior member Jim Risch from Idaho, in a Sept. 22 letter, seen by Bloomberg on Monday. “The impact that these accusations could have on the strength and reputation of our international financial institutions and the Bretton Woods system is still unknown, but they will surely not be good.”

Kristalina Georgieva was accused of falsifying data to favor China during her time at the World Bank (Reuters)
Kristalina Georgieva was accused of falsifying data to favor China during her time at the World Bank (Reuters)

On September 24, Maxine Waters, demócrata de California and Chairperson of the House Financial Services Committee, said the findings of WilmerHale’s review were “very concerning”, that the situation undermined the reputation of the World Bank and questioned the leadership of the IMF.

On September 22, Rep. French Hill, Republican of Arkansas and one of the strongest critics in Congress of the IMF’s distribution of drawing rights last month for $ 650 billion, and two other congressmen they asked the Treasury to provide recommendations to ensure strict and transparent data integrity in IMF and World Bank reports.

The United States has veto power over major IMF and World Bank decisions.

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