American Consequences - October 2021

He joined a fund that invests in infrastructure projects in the developing world. It was an opportunity that he explained at the time was “unexpected,” but one through which he said he thought he could “make the largest impact on major global issues.” It was a strange career move – leaving the pinnacle of the crossroads of development, emerging markets, and investment, for a position with a no-name institution that presumably paid better but enjoyed a crumb of prestige next to the five-course meal of the World Bank. And it was an option that very likely would have existed three years later. Kim either was in serious debt and needed some cash (no evidence of that at all) – or had a Spidey sense that he best get out while the going was good. After the tweaking, China’s ranking – like a levitating body under David Copperfield’s hand – miraculously ascended seven spots to No. 78, from the No. 85 that it was originally going to be ranked that year. (Someone else with good timing: In January 2018, then-World Bank chief economist – and now Nobel Prize winner – Paul Romer left his position in a huff after just 15 months, claiming at the time that the EoDB data was manipulated... an assertion he later recanted.) The WilmerHale investigation fingers Kim and Georgieva as the instigators of the data-

your thing – the EoDB team discovered three areas where the data could be reinterpreted to boost China’s score. For example, an indicator of legal rights was adjusted to give China more credit for a law relating to secured transactions. This change “could be justified in light of differing expert opinions on the effect of the Chinese law,” the report explained. And hey, presto. After the tweaking, China’s ranking – like a levitating body under David Copperfield’s hand – miraculously ascended seven spots to No. 78, from the No. 85 that it was originally going to be ranked that year. As it happens (it’s always eventually about the money, isn’t it?), it wasn’t only about China not wanting to lose face with no improvement in its ranking year over year. At the time the 2018 EoDB report was being finalized, Georgieva was also eyeball- deep in efforts to coax additional cash out of China as part of a broader effort to boost the World Bank’s capital base. The conversation with China – the third-largest shareholder in the institution and a key contributor to the capital campaign – would have been a lot more difficult, presumably, if China had EoDB egg on its face. WHY IT MATTERS A year and a few months later – in early 2019 – Jim Yong Kim unexpectedly and abruptly resigned from his position as the World Bank’s president, three years before his term in office was slated to end.

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