How the World Bank’s Doing Business Rankings Revealed

In September 2017, as the bank’s development economics (DEC) team was crunching the last bits of data, Chinese officials met with the bank’s president Jim Yong Kim and chief executive Kristalina Georgieva, as WilmerHale reports. insisted that the report should “better reflect” China. was lending billions of dollars which, in his view, was not worth this low-interest cash.

In early October, Kim’s office contacted the DEC, which replied that “as of now it looks like China’s results will not be positive. Disappointed, one of Kim’s aides wrote to another,” I’m gonna cry.”

It was now time for a slow-over. On 11 October, at the request of Kim’s office (it appears that Kim has not communicated directly with the DEC regarding China, although it is clear that his allies were acting under his instructions), the DEC chief Revealed the final country rankings. China had dropped seven places to 85 from last year’s report. On October 14, one of Kim’s senior staff members emailed back, noting that China was “not coming out properly” and questioning whether DEC had plans to “address (China)”. chronic complaints” about the report. The DEC chief responded by saying that although China had “reformed in absolute terms”, its relative ranking had fallen “because other countries in its neighborhood did much better”.

Two days later, the DEC approved the report (with China at number 85) and authorized its printing. Immediately, Kim’s managers told the DEC chief to stop and ask how China’s score could be raised. He suggested integrating Hong Kong’s data with China’s. This, of course, would have violated the accuracy of the report, as Hong Kong’s trade laws differ significantly from those of China. Hong Kong was actually ranked number 5 in the then report. The next day, on October 17, Kim’s office asked what China’s rank would be if data from the free market Macau were also added.

The DEC responded that it did not collect data for Macau, but that if Hong Kong is added, China’s rank would rise to number 70 from the previous year’s number 78, and it reports with this new count. is ready to print.

On October 18, CEO Georgieva told DEC that she was now in charge of China. It announced that the China-Hong Kong data merger was not a good idea and asked for new suggestions. The next day, the DEC chief mailed Georgieva saying that it was best to go with the report but “detailed explanations (may be added) of how China has made substantial progress on a number of indicators”.

Later that day, Georgieva informed the DEC that her advisor, Semyon Genkov, who was one of the study’s founders, would guide the report to final publication. Djankov hit the ground sprinting, working with the DEC team to identify data points where a change could be reasonably justified and would cause “the least amount of harm” to data from other countries. Three such regions were chosen, and after these changes were executed, China jumped seven places to the 78th position, an increase of seven places as in the previous year. Jonkov emailed that it was “excellent work” and proceeded to print the report.

As the Wilmerhall investigation report says, the next day, 20 October, Georgieva thanked the DEC chief for doing “a little bit for multilateralism”; And a week later—the weekend of October 28-29—he visited a DEC manager’s home, the only time he had ever received a physical copy of the changed Doing Business report. During a conversation in the manager’s driveway, he thanked him for helping him “solve the problem” with China’s rankings.

The 2018 Doing Business Report was published on 31 October, in which China was ranked 78th. President Kim left the World Bank in 2019 to join a private infrastructure fund, but Georgieva now heads the International Monetary Fund (IMF). It has denied all allegations of China-partisanship, but the stain may be difficult to erase. Last week, economist Jeffrey Sachs wrote an op-ed excerpt in the Financial Times, saying that “the case against Georgieva is baseless” and “the IMF should not surrender to anti-China frenzy”. In 2018, Sachs, once a maven writing a bestseller to end global poverty, raged on Twitter about the US sanctioning Chinese telecommunications giant Huawei, but after its financial ties with Beijing were exposed. closed your account. Last April, in his widely syndicated column, he said the allegation that China was committing genocide against Uighurs in Xinjiang was a “minor claim”. It’s no surprise.

Over the past decade, China has been quietly trying to take over multilateral institutions. The actions of the World Health Organization in the early days of the COVID pandemic were a sign of Beijing’s strategic success. Let’s see how the IMF rolls out.

Sandipan Deb is the former editor of ‘Financial Express’ and founder-editor of ‘Open’ and ‘Swarajya’ magazines.