World Bank discontinues 'Doing Business Report' after audit shows China fudged data
The organisation said it would no longer publish its "Doing Business" report on national investment climates, citing "undue pressure" from top bank officials, including then-Chief Executive Kristalina Georgieva, to raise China's rating in 2017.
FollowThe World Bank Group announced on Thursday that its 'Doing Business' reports would be phased out. It also stated that it would develop a new method for measuring a country's business and investment climate. The organisation said it would no longer publish its "Doing Business" report on national investment climates, citing "undue pressure" from top bank officials, including then-Chief Executive Kristalina Georgieva, to raise China's rating in 2017. Georgieva was the World Bank's chief executive officer before becoming the IMF's managing director.
The decision was made after internal audit reports revealed "ethical concerns, including the behaviour of previous Board leaders as well as current and/or former Bank personnel" and a board inquiry by the law firm WilmerHale, according to a statement from the World Bank. According to the Wilmer Hale study, top employees in the office of then-World Bank President Jim Yong Kim exerted "direct and indirect pressure" on the report's methodology to increase China's score, and it was most certainly done at his command.
It further claimed that Georgieva, who is now the managing director of the International Monetary Fund, and a senior adviser pressed employees to "make precise modifications to China's data points" in order to improve the Bank's ranking at a time when it was seeking China's help for a large capital increase. Compared to the original draught report, China's position in the "Doing Business 2018" report rose seven places to 78th.
Also Read |Â 'Disagree fundamentally': IMF chief on changing World Bank report to avoid angering China
The Doing Business report evaluates regulatory frameworks, ease of starting a business, infrastructure, and other aspects of the business climate. "I completely disagree with the findings and interpretations of the data irregularity inquiry as it relates to my involvement in the World Bank's Doing Business report of 2018," Georgieva said in an IMF statement. She went on to say that she had discussed the problem with the IMF's executive board. The WilmerHale investigation also uncovered anomalies in the data used to calculate rankings for Saudi Arabia and Azerbaijan in the 2019 "Doing Business 2020" report, but no indication that any officials of the Bank's Office of the President or executive board were engaged in the modifications.
In a statement, the World Bank said, "We will be working on a new way to evaluate the business and investment climate going forward." Georgieva also challenged an independent inquiry after the statement was released, which showed that she pressured employees to change a report to avoid angering China in her former work at the World Bank. Georgieva chastised a senior official for "mishandling the Bank's relationship with China and failing to appreciate the importance of the Doing Business report to the country," according to the report, which analysed 80,000 documents and interviewed more than three dozen current and former World Bank employees.
