Former World Bank bosses cited in fake Doing Business reports
An investigation by WilmerHale, a US-based law firm, found senior World Bank officials irregularly entering fake data to boost and alter scores in four countries including China, Saudi Arabia , the United Arab Emirates (UAE) and Azerbaijan.
The findings are contained in a September 16 report that details how some senior World Bank officials, after coming under pressure from China and Saudi Arabia in particular, changed data entries in Doing Business reports, some of which had already been marked as ready for publication.
Officials, according to the report, included senior staff in the office of then-World Bank President Jim Yong Kim, who admits attending some of the meetings that discussed the changes, the then chief executive of the Bank Kristalina Goergieva and Mr. Simeon Djankov, the then vice-president of development economics.
Mr Kim and Ms Goergieva left the World Bank in 2019, with Ms Goergieva becoming President and CEO of the International Monetary Fund, while Mr Djankov is currently a senior researcher at the Peterson Institute for International Economics, after leaving the World Bank in April. . Last year.
The trio, the report says, were either directly or assisted by key World Bank advisers and senior executives from Mr. Kim and Ms. Goergieva, who occasionally lobbied members of the Doing Business team to influence rankings and China’s scores for the Doing Business 2018 reports.
For example, the report noted, the Doing Business 2017 report was released at a critical time in the history of the World Bank, with the Bank being “consumed with sensitive negotiations over its ongoing capital increase,” a possible reduction. the engagement of a key stakeholder. and China’s concerns in particular regarding the recalculation of the Bank’s ownership shares.
The above, according to the report, had created significant tensions with some senior officials, including Ms Goergieva, claiming that multilateralism was at stake and that the Bank would have “very serious problems” if the campaign to raise capital failed.
“It is in this context that irregularities in the data concerning China occurred,” the report notes, detailing how China’s score was manipulated from 85th to 78th in the 2018 Doing Business report.
In the month leading up to the release of the 2018 report, surveys indicated that awareness among senior Chinese officials to Bank executives about the country’s ranking in Doing Business had intensified during which, during a In particular incident, the then executive director for China held a meeting with members of the Bank’s regional office for East, Asia and the Pacific on September 14 to inform them that if China’s ranking s ‘improved,’ everyone would be relieved ‘.
This would be followed by other meetings such as those held at the Bank’s Annual General Meetings, where another senior Chinese official at the time met with leaders from East, Asia and the Pacific on October 13 to express their hope that the Doing Business report âbetter reflects Chinaâ. .
âOn October 14, the same Chinese government official had dinner with the director general [Ms] Goergieva, in which he stressed that Ms. Goergieva’s role as the responsible person at the Bank to “ensure” that China’s reforms are recognized in the report, “indicate the findings of inquiries commissioned by the Bank. International Bank for Reconstruction and Development.
The report also notes that after Saudi Arabia, which had engaged the Bank in multi-million dollar contracts, expressed concern about its positioning, meetings were held, which led to changes in which its data was manipulated in the Doing Business 2020 report to overtake Jordan as Top Improvers. The results and the data compiled put Jordan ahead of Saudi Arabia.
The changes, which indeed affected dozens of other countries, including the United Arab Emirates, were made even as evidence, gathered in a second attempt, noted that Jordan did indeed deserve to get ahead of the EU. Saudi Arabia among the best improvers.
The report notes that Saudi Arabia had been disappointed with its score in the 2019 Doing Business report, pressuring the World Bank to “integrate Doing Business considerations into a broad set of reimbursable consulting services contracts that the Bank had performed with the country â.
Under reimbursable advisory services, the World Bank works with countries at their request to provide advisory, analytical and implementation support services for which it is reimbursed the costs of providing these services.
Early last week, the World Bank said it would cease publication of the annual Doing Business report, citing the entry of irregular data that had been altered to favor the performance of particular countries.
The report is a key document used by governments and the private sector around the world, including Uganda, to improve economic and business performance.
The investigations, which began in January, were the result of ethical misconduct on the part of Bank officials, some of whom had engaged in data tampering, a glaring omission under the Bank’s code of ethical conduct.
Alteration of Azerbaijani data
The 16-page report also says that on the instructions of then-vice president of development economics Simeon Djankov, the data entries for Azerbaijan were changed after he expressed concern about the that the government had improperly influenced the private sector contributions from which the team had collected data.
The concerns led to an internal audit, which confirmed the accuracy of most of the larger reforms that had been described in the report.
However, the report notes that under Mr Djankov’s leadership the reforms were frozen, which impacted the end result in which Azerbaijan was removed from the list of top improvers after their final score went down. been reduced by almost two points.
In addition to changes to three Azerbaijani data points, Djankov also ordered a last-minute change to the methodology highlighting the minority investor protection indicator, further damaging Azerbaijan’s score as well as the scores of Azerbaijan. many other countries “, we read in part.