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IMF boss Kristalina Georgieva in firing line over China scandal


The future of the boss of the International Monetary Fund is hanging in the balance as storm clouds gather over the global economy.

Kristalina Georgieva, a Bulgarian economist who was appointed managing director of the watchdog in 2019, has been accused of manipulating data in her former role at the World Bank to boost China’s ranking in a closely watched report.

The 68-year-old has denied the allegations – but her job was under discussion last night at a meeting of the IMF’s 24-strong executive board.

IMF boss Kristalina Georgieva (pictured) has been accused of manipulating data in her former role at the World Bank to boost China’s ranking in a closely watched report

The scandal threatens to derail the Fund just days before its flagship annual meetings next week.

And it would leave the Washington DC-based organisation rudderless at a crucial moment as it attempts to guide the global economy through the aftermath of the Covid pandemic.

Fears are mounting that soaring inflation could derail the recovery from coronavirus. A worldwide crisis in the energy market is dragging down living standards and stoking geopolitical tensions, with Russia accused of holding Europe to ransom.

Runners and riders 

Should Kristalina Georgieva lose her job as the head of the IMF, there will be no shortage of candidates to replace her.

Or indeed speculation on who that person might be.

Among those likely to be touted as a possible successor – with the key role of restoring credibility in a time of trouble – is former Bank of England governor Mark Carney, who left the Old Lady last year after seven years.

A string of European finance ministers and central bankers will also be in the running.

And there may even be talk of former EU Brexit negotiator Michel Barnier – though he has his eyes on the French presidency.

And the IMF has voiced concerns over the vaccine divide, as poorer countries have been unable to inoculate as many of their citizens.

The IMF is worried that this could hold back the global recovery, as long as coronavirus remains rife in some parts of the world.

On top of that, governments and companies are grappling with sky-high debt levels, having borrowed liberally to see them through the pandemic.

As interest rates begin to rise to tame inflation, the cost of these debts will spiral higher.

Georgieva is due to address the confluence of problems facing countries during the IMF’s annual meetings next week. 

The events, held online from Washington DC, will bring together the IMF, the World Bank, and central bankers and politicians from around the globe.

But the probe into Georgieva’s conduct has cast a cloud over the organisation, at a time when it would have hoped to use its authority to bring countries closer together.

Already this week the IMF has urged countries to be generous in donating vaccines to poorer neighbours, and to be sensitive towards less well-off citizens when rebuilding their economies.

A finding by the organisation that its own managing director had acted improperly would raise eyebrows among the high-profile politicians and bankers that it hopes to advise.

Georgieva began serving as the IMF’s managing director in October 2019, and prior to that had been chief executive of the World Bank since 2017.

But the World Bank launched an investigation last year into its Doing Business 2018 report, led by law firm Wilmer Hale, which found that staff including Georgieva had applied ‘undue pressure’ to researchers to boost China’s ranking in the publication.

It came at a time when the World Bank was seeking Beijing’s support for funding. But Georgieva’s lawyer said on Thursday night that the probe violated World Bank staff rules, by failing to notify her that she was a subject of the investigation and by not allowing her to respond to its findings.

The recovery in the US suffered a setback last month as hiring hit a nine-month low. 

The non-farm payrolls report – a major gauge of health in the world’s biggest economy – showed just 194,000 jobs were created, the lowest for nine months.

How the top job is cursed 

Kristalina Georgieva is not the first boss of the IMF to have faced an embarrassing probe into her conduct.

French former politician Christine Lagarde, now president of the European Central Bank, was hit with an investigation just one month into her role. 

Fellow French citizen Dominique Strauss-Kahn, who held the top role at the IMF before Lagarde, settled a civil case with a hotel maid for an undisclosed sum after she claimed he sexually assaulted her. 

Before him was Spain’s Rodrigo de Rato, who in 2018 was found guilty of embezzlement.

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