India sees the World Bank halting the publication of Doing Business report as a ray of hope to improve its ranking. The World Bank Group, on Thursday, cancelled the Doing Business report on business climates due to China’s alleged influence. It said the World Bank will be working on a new approach to assess the business and investment climate.
The report, prepared by law firm WilmerHale at the request of the bank’s ethics committee, raises concerns about China’s influence at the World Bank, and the judgment of Kristalina Georgieva – now managing director of the International Monetary Fund, and then-World Bank President Jim Yong Kim.
The WilmerHale report cited “direct and indirect pressure” from senior staff in Kim’s office to change the report’s methodology to boost China’s score, and said it likely occurred at his direction. The report also cited pressures related to data used to determine rankings for Saudi Arabia, the United Arab Emirates and Azerbaijan in Doing Business 2020 report published in 2019. However, there was no evidence that any members of the World Bank’s Office of the President or executive board were involved in these changes.
It also said that Georgieva, and a key adviser, Simeon Djankov, had pressured staff to “make specific changes to China’s data points” and boost its ranking at a time when the bank was seeking China’s support for a big capital increase. Georgieva, as per Reuters, said she disagreed fundamentally with the findings and interpretations of the report and had briefed the IMF’s executive board.
Reuters highlights that the Doing Business 2018 report, published in October 2017, had China’s ranking as 78th after the data methodology changes were made, compared with the initial draft report. Alexandra LaManna, Treasury spokeswoman, said the US Treasury is analyzing serious findings in the WilmerHale report. “Our primary responsibility is to uphold the integrity of international financial institutions.”
Meanwhile, a commerce and industry ministry official told The Mint, that no irregularities have been found in Indian data. “India remains the preferred investment destination for the world and a reliable, trustworthy destination, while China is slipping in attractiveness. Fraud by China will boost multilateral initiatives like supply chain resilience initiative to move manufacturing to India,” the official said. “The entire episode once again exposes the rampant fraud on which Chinese data is built and the integrity of Indian statistics. China has actively defrauded the World’s investors to hide their worsening investment climate.”
India’s ranking improved from 142 in 2014 to 63 in 2019, with the Prime Minister Narendra Modi-led government making concerted efforts to improve its business competitiveness ranking. India was aiming to be among the top 50 countries by 2021.