*Investigation indicts IMF MD, Georgieva
James Emejo in Abuja
The World Bank yesterday announced that it has discontinued further publication of its “Doing Business” report series for 2018 and 2020, following data irregularities uncovered by both internal and independent investigation.
The bank explained in a statement that following data irregularities uncovered by an internal probe on both reports in June 2020, its management had resolved to pause the next edition and initiated a series of reviews and audits of the report as well as its methodology.
The Washington-based institution added that after reviewing all the information available to date on Doing Business, including the findings of past reviews, audits, and the report the bank released yesterday on behalf of the Board of Executive Directors, the World Bank Group’s management took the decision to discontinue the Doing Business report.
The statement added, “The World Bank Group remains firmly committed to advancing the role of the private sector in development and providing support to governments to design the regulatory environment that supports this.
“Going forward, we will be working on a new approach to assessing the business and investment climate. We are deeply grateful to the efforts of the many staff members who have worked diligently to advance the business climate agenda, and we look forward to harnessing their energies and abilities in new ways.”
The bank had in January engaged an independent law firm, WilmerHale (WH) to review the internal circumstances at the Bretton Woods institution that contributed to the data irregularities identified in the Doing Business 2018 and Doing Business 2020 reports.
The investigation had examined the improper changes to the data for China in the Doing Business 2018 report; Saudi Arabia, United Arab Emirates, and Azerbaijan in the Doing Business 2020 index respectively.
The probe also sought to establish who at the bank directed, implemented or knew about the changes to the data and how their direction or pressure manifested among others.
Preliminary investigation by the World Bank had already established that irregularities occurred in both editions of the Doing Business reports.
The bank in a review further established that China’s position in the 2018 report, released in October 2017, should have been seven places lower -at No. 85 rather than remaining at 78.
The bank in a statement yesterday stated, “The changes to China’s data in Doing Business 2018 appear to be the product of two distinct types of pressure applied by bank leadership on the Doing Business team.”
The investigation further indicted the Managing Director of the International Monetary Fund (IMF), Kristalina Georgieva, who was called out by the World Bank, her previous employer, for applying pressure to boost China’s position in a ranking of economies.
But Georgieva has faulted the outcome of the probe.
The investigation was produced by the law firm which was retained by the World Bank executive board’s ethics committee, the body responsible for ethical matters involving Board officials.
The findings were shared with the World Bank’s executive directors on Wednesday, and the board authorised their release.
“Published on October 31, 2017, the Doing Business 2018 report was released at a pivotal moment for the Bank and its leadership: From mid-2017 to April 2018, Bank management was consumed with sensitive negotiations over its ongoing capital increase campaign.
“Among other issues complicating the process, there was concern that at least one key stakeholder would meaningfully reduce its commitment to the institution, and that other significant countries, including China, were apprehensive about how ownership shares at the Bank were going to be re-calculated in response to increased financial commitments”, the report stated.
The findings however, hailed the bank’s commitment to investigating the circumstances and motivations that led to the data irregularities in Doing Business 2018 and Doing Business 2020.
But it added that “those efforts will achieve maximum positive returns for the Bank’s culture and processes only if the institution endeavors to take concrete actions to ensure that similar irregularities do not occur again.”
It, therefore, recommended among other things, for formalisation and enforcement the methodology and procedures used by the Doing Business team to collect, analyse, and confirm the data incorporated into the Doing Business report.
The report also called for the establishment of an authorisation process at the senior management level for changes to the Doing Business report’s methodology or publication process to avoid abuse of discretion by a single manager.
It reinforced the need to enhance procedures/safeguards to data changes occurring during or after Bank-wide review.
The findings further recommended further embargoes on distribution of rankings, including not sharing rankings outside of the Doing Business team until the report is finalised.
It urged the bank to develop and implement procedures for the routine audit of Doing Business data and rankings by an independent party (i.e., external to the Doing Business team).
The report called for, “firm procedures to protect the Doing Business team from pressure or influence from Bank senior management, regional vice presidencies, advisory services colleagues, and member countries.”
Nevertheless, the World Bank in August 2020, stated that over the 17 years of its existence, the Doing Business report had been a valued tool for countries seeking to measure costs of doing business.
It stated that Doing Business indicators and methodology were designed with no single country in mind, but rather to help to improve the overall business climate, it stated.
It stated: “A number of irregularities have been reported regarding changes to the data in the Doing Business 2018 and Doing Business 2020 reports, published in October 2017 and 2019. The changes in the data were inconsistent with the Doing Business methodology.”
Pointing out that the integrity and impartiality of its data and analysis remained paramount, the bank had further announced immediate measures to address the situation.
“We are conducting a systematic review and assessment of data changes that occurred subsequent to the institutional data review process for the last five Doing Business reports.
“We have asked the World Bank Group’s independent Internal Audit function to perform an audit of the processes for data collection and review for Doing Business and the controls to safeguard data integrity.
“We will act based on the findings and will retrospectively correct the data of countries that were most affected by the irregularities.
“The Board of Executive Directors of the World Bank has been briefed on the situation as have the authorities of the countries that were most affected by the data irregularities.
“The publication of the Doing Business report will be paused as we conduct our assessment.”
