World Bank discontinues ‘Doing Business’ report due to ‘irregularities’

18-Sep-2021 Intellasia | PhilStar-AFP | 5:02 AM Print This Post

The World Bank Group would cease publication of its “Ease of Doing Business” report past results of which were protested by the Philippines twice after a former official was found to have ordered staff to manipulate data to please China.

In a statement on Friday, the Washington-based multilateral lender said it would “discontinue” the flagship publication after discovering irregularities in the 2018 and 2020 editions of the report.

The decision also came on the heels of an independent probe which found that Kristalina Georgieva, World Bank’s former CEO who took the helm of the International Monetary Fund in 2019, pressured the Bank’s staff to alter some of the data that, in turn, catapulted China’s ranking in 2018.

“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,” the lender said.

“Going forward, we will be working on a new approach to assessing the business and investment climate,” it added.

World Bank’s annual report matters to several nations, especially developing ones, since it greatly influenced investor decisions by releasing a ranking of economies based on how easy it is to open up, and operate, a business. But while the report was hugely popular among investors, it was heavily criticised by many governments for its methodology that, leaders said, inaccurately captured the realities on the ground.

On a couple of occasions, the Philippines was among the countries that have protested the results of the ranking. Back in 2015, the Aquino administration objected to findings of the World Bank report. Four years later, the Duterte administration filed a protest in 2019, when Manila dropped 11 notches in the rankings

Although the 2019 report was not covered by the reported data irregularities, economic managers at the time said the report was “grossly inaccurate.” The next year, the Philippines jumped 29 notches to 95th place.

Trade Secretary Ramon Lopez did not respond to when sought for comment. Finance Secretary Carlos Dominguez III, for his part, said he was still reviewing World Bank’s statement.

Prior to the termination of the report, the World Bank last year announced it would suspend the release of the latest rankings because of “a number of irregularities.”

According to the investigation by law firm WilmerHale, Beijing complained about its ranking of 78th on the list in 2017, and the next year’s report would have shown Beijing dropping even further. In the final weeks before the report was released at the end of October 2017, the World Bank’s then-president Jim Kim and Georgieva asked staff to look into updating the methodology in regard to China.

Kim discussed the rankings with senior Chinese officials who were dismayed by the country’s ranking, and his aides raised the issue of how to improve it, according to the summary of the probe, released by the World Bank. It is considered one of Kim’s signature achievements that he shepherded a deal for a $13 billion increase in World Bank resources.

Amid the pressure from upper management, staff changed some of the input data, which boosted China’s ranking in 2018 by seven places to 78, the same as it was the previous year.


Category: Philippines

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