The future of the Bulgarian Kristalina Georgieva as managing director of the International Monetary Fund (IMF) falls like a bomb on the autumn (northern hemisphere) meeting of the institution. The meeting is considered the most important of the year, marked on that date by an economic recovery that remains in check due to inflation, shortages and the doubts caused by the delta variant of the coronavirus on economies like the North American. Add to that unequal access to vaccines. Possible irregularities allegedly instigated by Georgieva to favor China while working at the World Bank have opened a gap between two blocs, now apparently irreconcilable: those calling for his resignation, with the US at the head, and the Europeans, in favor of his continuing. After two weeks of exhaustive investigation, the institution believes it can end the crisis “as soon as possible” with the publication of a report on the conduct of the Bulgarian economist, according to a statement published on Sunday.
The division between the two shores of the Atlantic deepens, despite the creation of cooperation forums such as the one established two weeks ago in Pittsburgh, also intended to overcome the disagreement caused by the security alliance between the US, UK and Australia against the Beijing’s hegemonic ambition (and against the interests of France and, by extension, the EU). China, again and for the umpteenth time, appears as the mute guest in a new global discussion. The US and Japan on the one hand —the Fund’s largest shareholders— and France, Germany, Italy and the United Kingdom, aligned with Russia and China, are facing each other, according to the newspaper Financial Times, since last month’s knowledge of a data manipulation to improve the Asian giant’s results in the report Doing Business of 2018 and 2020.
After two weeks of investigations and meetings, the body said on Sunday that it hoped to complete “as soon as possible” its report on Georgieva’s conduct, but the deep division among the 24-member board of directors has delayed consensus. The verdict, therefore, could coincide, perhaps, with a heavy blow: the annual summit of the IMF and the World Bank (WB), which begins on Monday in Washington. The Fund will publish its Global Economic Outlook report on Tuesday, with a likely downward revision of growth prospects for 2021, which the IMF estimated at 6% in July.
It is paradoxical that the Georgieva novel coincides with a re-edition of the movement of non-aligned countries, this relic of the Cold War —a third anti-bloc pathway precursor of north-south dialogue—, when the configuration of the world in two poles antagonistic to the ghost of China is reinforced by this global cockfight , in which influences and pressures go together. The bonfire at Kristalina Georgieva’s feet was lit last month, when the WB decided to indefinitely cancel its popular report Doing Business after an external review concluded that several high-ranking officials of the institution pressured technicians to benefit China in the 2018 and 2020 rankings. The publication of the document seemed, at first, a tedious internal matter: inaccuracies in the data, the result of technical errors. After the compilation errors appeared the shadows of then-president Jim Yong Kim and chief executive of the entity, Georgieva, who allegedly had pressured Bank officials to make “specific changes” to some indicators in China to do so. winning ranks in the rankings is seen at a time when the Bank was seeking support from Beijing to increase its capital.
The indictment revealed a “toxic culture” within the team at Doing Business, with “fear of reprisals”. “Employees felt they could not defy an order from the president and chief executive without risking losing their jobs,” shows the investigation published on Sept. 16, according to the agency. Reuters. Bulgarian Simeon Djankov, a high-ranking official under Georgieva’s orders, was also accused of overseeing data manipulation and making threats and blackmail against the technicians. Georgieva showed her deep disagreement with the revelations.
Beyond the blocs, most critics fear that the accusations against the Bulgarian economist will jeopardize the two institutions’ ability to promote reforms and boost growth; that is, their own role as interlocutors with governments. Its supporters, by contrast, emphasize their support for the poorest nations during the pandemic and for reshaping the Fund’s priorities for such urgent issues as climate change and gender equality.
Supporting the thesis of the confrontation between rich and poor countries —African countries unanimously defended him, for example—, prestigious economists like Jeffrey Sachs and Joseph Stiglitz aligned themselves with Georgieva. The first one wrote in the Financial Times that his expulsion “would be a dangerous and costly capitulation to anti-Beijing hysteria.” The Nobel Prize in Economics, former chief economist of the WB, described the efforts to eliminate it as a “coup” and the report by the law firm that drafted the accusations as “an ax”. In a statement issued by a public relations firm hired by Georgieva, six former employees of the Bank describe her as “a person of the utmost integrity and commitment to development”. In recent months, Georgieva has highlighted the uneven global response to the pandemic and has allocated IMF emergency funds to 100 of the world’s poorest countries to address the emergency.
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