Ex-World Bank bosses cited in faking Doing Business reports

An investigation by WilmerHale, a US-based law firm, has found that top World Bank officials irregularly entered false data to boost and alter scores of  four countries among them  China, Saudi Arabia, United Arab Emirates (UAE) and Azerbaijan. 

The findings are contained in a September 16 report that details how some senior World Bank officials, after they were put under pressure by particularly China and Saudi Arabia, changed data entries in the Doing Business reports, some of which had already been flagged as ready for publication. 

The officials, according to the report, included senior staffers in the office of then World Bank president Jim Yong Kim, who admits to attending some of the meetings that discussed the alterations, the Bank’s then chief executive officer Kristalina Goergieva and Mr Simeon Djankov, the then Development Economics vice president. 
Mr Kim and Ms Goergieva left the World Bank in 2019 with Ms Goergieva going on to become chair and managing director of the International Monetary Fund, while Mr Djankov is currently a senior fellow at the Peterson Institute for International Economics, having left World Bank in April last year. 

The trio, the report indicates, were directly or assisted by key World Bank advisors and senior staffers to Mr Kim and Ms Goergieva, who would occasionally exert pressure on members of the Doing Business team to influence rankings and scores of China for the 2018 Doing Business reports. 
For instance, the report noted,  the 2017 Doing Business report had been released at a critical point in the World Bank history with the Bank “consumed with sensitive negotiations over its on-going capital increase”, a possible reduction of commitment by a key stakeholder and concerns from particularly China over recalculation of the Bank’s ownership shares. 

The above, according to the report, had created significant tension with some top officials including Ms Goergieva, saying that multilateralism was at stake and the Bank was in “very deep trouble” if the campaign to increase capital failed. 
“It was against that backdrop that data irregularities pertaining to 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 to the publication of the 2018 report, investigations indicated, outreach from senior Chinese officials to Bank leaders over the country’s ranking in Doing Business had intensified in which, in one particular incident, the then executive director for China held a meeting with members of the Bank’s East, Asia and Pacific regional office on September 14 to inform them that if China’s ranking improved, “everyone would be relieved”.
 
This would be followed by other meetings such as those during the Bank’s annual general meetings, where another then senior official from China met with East, Asia and Pacific leadership on October 13 to express his hope that the Doing Business report would “better reflect China”. 
“On October 14, the same Chinese government official had dinner with chief executive officer [Ms] Goergieva, during which he emphasised that Ms Goergieva’s role as the responsible person at the Bank to ‘ensure’ that China’s reforms were acknowledged in the report,” findings of the investigations commissioned by the International Bank for Reconstruction and Development, read.  

The report also note that after Saudi Arabia, which had engaged the Bank in multimillion dollar contracts, had expressed concern over its positioning, meetings were held leading to alterations in which its data was manipulated in the 2020 Doing Business report to leapfrog Jordan as the Top Improvers. Findings and compiled data had placed Jordan ahead of Saudi Arabia.  

The alterations, which in effect affected scores of other countries, including United Arab Emirates, had been done even as evidence, gathered on a second attempt, had noted that Jordan indeed deserved to be ahead of Saudi Arabia among the Top Improvers.  
The report notes that Saudi Arabia had been disappointed with its score in the 2019 Doing Business report, exerting pressure on the World Bank to “integrate Doing Business considerations into extensive set of Reimbursable Advisory Services contracts that the Bank had executed with the country”. 
 
Under the Reimbursable Advisory Services, the World Bank works with countries at their request to provide advisory, analytical services and implementation support for which it is reimbursed for costs of delivering such services. 
Early last week, the World Bank indicated it would discontinue publication of the annual Doing Business report, citing entry of irregular data that had been altered to favour the performance of particular countries.
The report is a key document that is used by governments and the private sector globally, including in Uganda, to uplift economic and business performance. 

The investigations, which started in January, were a result of ethical misconduct by Bank officials, some of whom had engaged in falsification of data, a gross omission under the Bank’s ethical code of conduct. 

Alteration of azerbaijan data  
      
The 16-page report also indicates that on the instructions of the then Development Economics vice president Simeon Djankov, data entries for Azerbaijan were altered after he showed concern 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 majority of the larger reforms that had been captured in the report. 
However, the report notes that on the direction of Mr Djankov the reforms were frozen thus impacting the final outcome in which Azerbaijan dropped out of the list of Top Improvers after its final score had been reduced by nearly two points. 
“In addition to alterations made to three Azeri data points, Mr Djankov also ordered a last minute change to the methodology underscoring the Protecting Minority Investors indicator, further damaging Azerbaijan’s score as well as scores of numerous other countries,” the report reads in part.