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fire Kristalina Georgieva into the sun
We must hold China to account
Kristalina Georgieva obtained her Economics PhD from the Karl Marx Higher Institute of Economics in 1986. Over 30 years later, in 2019, she was named the managing director of the International Monetary Fund (IMF), instantly becoming one of the most powerful people in the world. She now oversees their trillion+ dollar lending capacity.
It took her less than 2 years to fuck it all up and cause a fundamental crisis of confidence in the IMF. In retrospect, maybe putting a corrupt Bulgarian commie in charge was not the smartest choice (Bulgaria is the most corrupt state in the EU according to every ranking/metric of corruption). Normally, she would not have even been considered for the position of managing director the first place — the rule was the candidate could not be older than 65 — but Emmanuel Macron (renowned old lady lover) pressured the IMF to waive the rule for her.
Her Chinese Corruption Scandal
This story broke last month, and was covered extensively in the mainstream press by WSJ, Bloomberg, The Hill, CNBC and Politico among others. In the Substack world, Adam Tooze seems to be the only writer so far to do a deep dive on this.
EDIT: I just found another nice substack article that discusses this scandal.
In short: the crux of the scandal is that Georgieva blatantly manipulated data in order to increase China’s rankings in the “Ease of Doing Business” index at the same time China was playing a major role in the bank’s capital increase campaign. She feared that Beijing would be upset by a low score because this index is widely viewed as the World Bank’s single most important publication. There is no doubt that she was complicit with China in using its influence to corrupt individuals and institutions. Pay-to-play. Pretty straightforward, despite what her lawyers say.
Paul Romer Vindicated
In 2018, the World Bank’s Chief Economist (and Nobel laureate) Paul Romer resigned from his position after calling into question discrepancies in this very same “Ease of Doing Business” index. He wrote a summary of the scandal on his website. To rebut him, Georgieva herself wrote an article in Wall Street Journal to defend the integrity of the index.
Paul Romer rang the alarm bells, and as a reward was forced to resign. Now he has been proven right.
Why This Matters
Unlike academic scandals where the only thing on the line is a few useless citations, this is a scandal that actually matters because people are now questioning all the work the IMF does. It's hard for the IMF to pursue "anticorruption" if the IMF itself is corrupt! If this index is rigged, what is to say all their other data/reports/analysis aren’t also rigged?
The bigger picture is that Western institutions, and capitalism, have now lost yet another battle in the fight against communism. China is a communist dictatorship, and this is them flaunting the international community’s standards of fairness, rule of law, and market openness. They walked all over the USA here and are asserting dominance on the global stage. They have manipulated the IMF into a position where they are stuck having legitimized and supported a regime that makes a mockery of multilateralism! Multilateralism cannot mean just doing whatever is necessary to get milk more money from the communist dictatorship in China. We must hold them to account. Is corruption acceptable now? Why hasn’t she been fired? The thugs, crooks, commies, and dictators of the world just get emboldened by our tolerance and appeasement. We keep catering to China, and in turn they keep imposing capital controls and cutting off foreign investors. Not to mention their (cultural?) genocide in Xinjiang and annexation of Hong Kong. Annexing Taiwan is undoubtedly next.
Looking beyond the IMF to other institutions, one need look no further than the WHO's bungled investigation as to the origins of Covid. Cooperation from China was clearly sandbagged in order to muddy the waters, rendering it impossible to determine where Covid originated. Who can forget this viral video of WHO official Bruce Aylward hilariously hanging up on a Taiwanese journalist? Yes, China have captured the WHO, and now they have captured the IMF and WB as well. Perhaps United Nations, the WHO, the IMF, the World Bank were originally good ideas that were helpful in building world peace, stability, and prosperity. would argue that that we are long past that point. They are rotten institutions.
Why is she untouchable?
How did she not get fired immediately?
People didn’t really expect Georgieva to survive this scandal — but like a cockroach surviving nuclear winter, she did. God, I hate bureaucrats. The IMF’s executive board has opted to retain Kristalina Georgieva as the institution’s managing director and said it had “full confidence” in her. The announcement followed marathon meetings of the IMF board, which struggled over several days to reach an agreement on Georgieva’s fate. Nobody was sure if she would survive those meetings, but she did. USA and Japan contingent wanted her out, allegedly, but the rest of the world stood behind her. It seemed there wasn’t sufficient political will to force her out, as our elites preferred steady leadership over disrupting the status quo. She was guilty, says University of Toronto fellow Paul Cadario, “guilty, but not guilty enough.”
The worst punishment meted out was a scolding from Janet Yellen, who said the allegations raised “legitimate issues.” Apparently Yellen even snubbed Georgieva on a phone call. The horror! I am sure China is loving that the US Treasury is led by a geriatric 75 years old. Do you think they respect her? Fear her? Care about her opinion? No, she is totally toothless and everyone at this point knows it.
Of course, the obvious answer to why Georgieva is still around is that as a Chinese puppet she is shielded from consequences by Chinese soft power. They like her because she is easy to control. As an example of this soft power, pretty much every country in Africa magically sided with China over the US in this spat, as demonstrated by an open letter written by African Ministers praising the work of Georgieva, demanding that she stay on as leader. Of course, this is a result of Africa being beholden to China thanks to neo-colonialism and Belt and Road debt traps. China now controls African votes at the IMF/UN, next they will control all African resources/minerals. It is only a matter of time before the enslave the local African population.
But it wasn’t just Africa who supported Georgieva. European powers widely supported her too, and without their backing she would be gone. I have my own theory for why they supported her: she has the right politics. Look no further than her twitter bio, which highlights green energy, feminism, and equity. She supports “equitable economies” so she *must* be a good person and a great leader:
It is obvious that she doesn’t really care about things that used to be the IMF’s core mission: being a lender of last resort, producing high-quality data collection/research, or monitoring and encouraging global growth and stability. That’s where the IMF’s competitive advantages / value lies, but to her these are trivial afterthoughts. Instead, what she really cares about is “equity of outcome,” which in her grad school days at Karl Marx University she used to refer to as “communism.” Same thing, same people. Commies never change.
She has crazy ideas about gender equity. As she was appointed to her IMF role in 2019, she bragged about a relentless' focus on gender equality. To see how she operates, look to her previous role at the WB where when she took over as chief executive, she set a goal of achieving gender parity in top roles. The bank met that target just a year later, two years ahead of schedule. Think about the massive level of discrimination, quotas, and affirmative action needed for this!! A purge of men from leadership in under a year. She even goes so far as to support mandating representation of women in C-suites, citing IMF studies that companies boosted results by 8% to 11% if they had women on their boards or senior management. What a fake study. I could just as easily cite this paper that finds such laws do nothing but result in a significant decline in shareholder value for firms. While the IMF fills its senior leadership with diversity hires, China marches onward with meritocracy. Once again, China is laughing at us.
I came across something interesting while researching this article: last week, about 7% of International Monetary Fund entire workforce signed a petition asking whether Georgieva ordered the removal of specific language from a report on Brazil. This pushback against Georgieva from her own people just two weeks she survived a vote of no-confidence raises my eyebrow, because it specifically mentions that scandal, and also accuses her of a new quid pro quo where she leaned on IMF staff to soften their criticism of environmental policies in Brazil.
But I don’t really care about Brazil. What I care about is the culture at the IMF, she clearly doesn’t have the trust of her own staff. This was a mini mutiny. They know that she was already on shaky grounds, but they started a petition anyway! That obvious lack of internal trust alone should be enough for the IMF to find a new managing director whose integrity is intact. I expect to hear more about this brewing Brazilian scandal as it unfolds in the coming days/weeks. This is not the last you have heard of Kristalina Georgieva! She is such a toxic presence that I don’t see her lasting long — she is widely known as corrupt. She is a ticking timebomb, and it is better to replace her sooner rather than later.